In Centralia, Gov. Gregoire signs bill that ends TransAlta's coal use by 2025

Transalta: Company may switch to natural gas

April 30, 2011 

Governor signs bill to phase out coal power The TransAlta coal plant comes up unexpectedly around a turn in a quiet road that curves through fields and farmland a few miles east of Centralia. It's a windowless, bunkerlike building sided with corrugated green metal and topped with three towering smokestacks.

And, in time, it will be no more.

That decision became official Friday when Gov. Chris Gregoire visited the plant and signed a bill there that will mean an end to coal-fired electricity generation in Washington and a big change to the landscape of Lewis County.

“Coal power was a part of our past,” said Gregoire at the signing. “Our prosperity now depends on our ability to move forward with a clean energy future.”

The new law will require Washington’s only coal-burning power plant to shut down gradually – TransAlta will take one boiler offline in 2020 and the next at the end of 2025 – and, company executives said, it could pave the way for a new natural gas plant nearby.

TransAlta CEO Steve Snyder said the company hasn’t finalized plans for what it will do when it has to stop burning coal, but he said he expected to build a natural gas plant in the area. He also said wind power would be an option for the company in Washington, but that probably wouldn’t be located in the same place.

Snyder said he didn’t expect many jobs to be lost at the plant, which employs about 300 people and pays an average wage over $80,000, though natural gas plants generally use fewer workers than coal ones.

“Our goal is to have no job loss,” he said.

Others weren’t so sure about that. Union representative Byron Babka, who attended the bill signing, said he helped build the TransAlta plant in the 1970s and worked there for 17 years. He said he didn’t see how a change to natural gas could happen without losing jobs in the area.

One thing that could add jobs, he said, is a separate industrial park project that’s planned nearby on a former coal mine site that belongs to the TransAlta company. The new law also requires the company to set up a $30 million fund to go toward economic development in the Lewis County area.

Centralia Mayor Harlan Thompson said it was too early to say what kind of projects might go toward and how it might be administered. He said right now the TransAlta plant is an important employer and the only major industry around, calling it “our Microsoft and Boeing put together.”

The bill the governor signed Friday, Senate Bill 5769, was a major priority for the environmental lobby this year because TransAlta is the state’s biggest emitter of climate-changing greenhouse gases. It gives off mercury, sulfur and nitrogen oxides, which contribute to pollution problems such as smog and acid rain.

Natural gas burns cleaner than coal, and Ecology Department spokesman Seth Preston said toxic metal pollution from the plant will go away entirely if it shifts to natural gas. When the first coal-fired boiler is shut down in 2020, assuming it’s replaced by natural gas, greenhouse gas emissions will go down about 25 percent.

But natural gas also costs about twice as much as coal, according to U.S. Energy Information Administration, meaning that the cost of electricity from the new plant could go up slightly.

The change probably won’t affect the source or the cost of most people’s electricity too dramatically, though, said Tony Usibelli, director of the state Commerce Department’s energy policy division. That’s because, in a state where about 65 percent of our energy comes from cheap hydroelectricity, most of us probably don’t use power from the plant very often.

He said TransAlta mainly sells “spot power” or temporary power to Washington utilities, so it doesn’t figure prominently into the reports that utilities compile about the sources of their electricity.

Coal made up about 17 percent of the total fuel mix for making electricity used in Washington in 2009, but much of that comes from coal plants in other states.

The plans for shutting down TransAlta come as the Boardman coal plant in Oregon prepares to close as well under a plan approved by the Oregon Environmental Quality Commission.

Regionally, Usibelli said, that could mean a significant reduction in the amount of spot power that comes from coal. Given that shift, he said there could be a small increase in the cost of electricity in Washington of 1 percent or 2 percent, but he said it was too early to know for sure.

As it makes the shift to natural gas power, the bill the governor signed Friday will also allow TransAlta to enter into long-term contracts with utility companies in the state so that it has more predictable financing for decommissioning the old plant and building a new one.

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