Article by Erik Smith. Published on Wednesday, March 16, 2011 EST.

Company, Governor, Greens Reach Agreement, and Now it’s the Legislature’s Turn

Four people who never expected to be sitting at the same table: Keith Phillips of the governor’s office, Matt Steuerwalt, representing TransAlta; Bob Guenther, president of the Thurston-Mason-Lewis Central Labor Council; and Nancy Hirsh of the Northwest Energy Coalition.

By Erik Smith

Staff writer/ Washington State Wire

OLYMPIA, March 16.—A deal to shut down the state’s only coal-fired electric plant by 2025 is as good as it gets, lawmakers were told Tuesday – though it looks like there might be some skepticism in the state House.

            The plan seemed to come from nowhere a little over a week ago, after years of negotiation between the governor’s office and TransAlta, the Alberta company that owns the Centralia plant – together with rising public agitation and courtroom tactics from the state’s green groups. Within hours of the deal’s announcement March 4, the Senate ratified it 36-13 in the form of a bill and sent it sailing over to the House.

            But Senate Bill 5769 may not be a done deal. Virtually every interest involved in the long-running battle is urging lawmakers to take it and run, but members of the House Environment Committee say they may want to tinker with it a bit before they send it back. In a legislative environment, that always spells trouble. The bigger their changes, the more difficult passage becomes. One part they may have trouble swallowing is an exemption from state greenhouse gas regulations for a replacement natural-gas plant.

            “I do believe we have been able to achieve the bones of a very good agreement,” said state Sen. Phil Rockefeller, D-Bainbridge Island, sponsor of the Senate bill. “I recognize there are fine points as we drill down into this that have to be completed and negotiated and captured and wordsmithed, and that work is going on.”

            Ends Coal by 2025

            The deal would basically take the state out of the coal-burning business and shut down the state’s single biggest source of air pollution, the equivalent of 1.8 million cars. The plan is to use the Centralia site for a new cleaner-burning natural-gas plant. TransAlta says the 14-year phaseout will give it the time to make an orderly transition. The company had been heading that direction already – an executive order from the governor’s office had assumed a 2025 shutdown date. Perhaps the most important difference is that the deal requires TransAlta to shut down one of its two boilers by 2020.

            Green groups had been urging the Legislature to force a shutdown by 2015. They had panicked power company officials, workers and civic leaders in Lewis County with their efforts to challenge the company’s operating permits.

State Rep. Marko Liias, D-Mukilteo, was their standard-bearer in the House, and he said he’s not completely sold on some of the details of the deal. “The broader outlines are good progress,” he said. “You know, I think a good compromise means everyone is sort of equally happy and uncomfortable, and I think that you want to bring everyone to where they are truly right in the middle, and it sounds like we are there.”

            In addition to the greenhouse-gas exemption, other sticking points appear to be delegation of authority of the governor’s office to enforce the agreement and protections against price-spikes for big industrial purchasers of electricity.

            Conflict Muted

            Though House skepticism of the deal is widely talked about in the Legislature, there didn’t seem to be much evidence of it at the Tuesday hearing. Not a single interest group testified against the bill. Local officials from Lewis County said the gradual phaseout is critical because the plant is the area’s largest employer. The agreement provides a $55 million contribution from the company for local economic development efforts.

            The 14-year shutdown plan prevents a battle between labor unions and environmental groups, which had been at loggerheads over the shutdown. After all the angry rhetoric at legislative and regulatory hearings, there was a definite change of tune Tuesday. “I want to make it perfectly clear that my involvement with the environmental community has been heartwarming,” said Bob Guenther, president of the Central Labor Council of Thurston, Lewis and Mason Counties.

            Nancy Hirsh of the Northwest Energy Coalition said green groups signed off on the deal because it provided certainty. Maybe market conditions and regulatory battles might have forced the plant to shut down sooner. Or maybe not. “And we are not really Karnak, to bring you back to Johnny Carson days – we could not predict which future would emerge, so we opted for certainty.”

            Doug Howell of the Sierra Club acknowledged that there are plenty of crestfallen environmentalists. “Some of our members were very concerned and were very disappointed, and we have also incurred some harsh criticism, but we believe this is the right thing.” If the deal doesn’t go through, he said his group will continue to challenge the coal plant in the courtroom, in regulatory proceedings, and in shareholder actions.

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