Washington state regulators sent directives to three major utilities this week asking them to consider the carbon-emission costs of producing electricity from coal-fired plants. This accounting would just be for planning purposes, not to justify raising customer rates, the Seattle Times reported.
“The Washington Utilities and Transportation Commission directives were sent to Puget Sound Energy, Avista Corp., and Pacific Power, which collectively serve more than 1.47 million state customers from a mix of coal, natural gas and renewable power,” Hal Bernton wrote.
Regulators suggested that the utilities use a federal carbon-price formula developed under the Obama administration to measure the true cost of emissions, including sea level rise and extreme weather, according to the Seattle Times. “In 2020, that cost is assessed at $42 per metric ton, and escalates to $60 per metric ton by 2040 as the effects of climate change intensify,” Bernton wrote.
All three utilities have ownership stakes in the Colstrip Generating Plant in Montana, the second largest coal-fired facility west of the Mississippi with a combined peak output of 2,094 megawatts, according to Puget Sound Energy. In addition, Pacific Power gets electricity from the coal-fueled Jim Bridger Power Plant in Wyoming.
Bernton noted that the new accounting could help make the financial case for the three utilities to accelerate their planned exits from Colstrip.
Puget Sound Energy has already determined that the carbon cost of power from Colstrip is $27 per metric ton, but Pacific Power’s parent company PacifiCorp had set a 2026 deadline for carbon pricing, Bernton reported. Avista, which only gets 9% of its power from Colstrip, has an energy future in renewable energy and natural gas-fired power plants, the Billings Gazette reported in February.
“It is imperative that utility planners recognize the risks and uncertainties associated with greenhouse gas emissions and identify a reasonable, cost-effective approach to addressing them,” the Washington Utilities and Transportation Commission stated.
Currently the price of electricity for businesses in Washington state is 8.42 cents per kWh on average compared to Oklahoma’s 6.8 cents per kWh at the least expensive end, according to Electric Choice. In 2015, Washington State actually had the lowest rate at 7.16 cents per kWh. Alaska and Hawaii still top the 2018 list with 19.53 cents and 26.47 cents per KWh, while northeast states have rates averaging well over 10 cents.
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