Washington State Just Outmaneuvered Trump’s Coal Order

Trump may have ordered Washington’s last coal-fired power plant to stay open, but it’s unlikely ever to operate ever again thanks to a crafty bit of policy the Evergreen state just passed.

Washington’s Governor Bob Ferguson is expected to sign a bill on Wednesday that accomplishes one very narrow goal: It taxes the hell out of any electricity generated by the TransAlta Centralia coal plant, effectively pricing it out of the market.

The Centralia plant was scheduled to close at the end of 2025 and begin undergoing a conversion to run on natural gas. In mid-December, however, Trump’s Secretary of Energy Chris Wright issued an emergency order to keep the plant’s coal unit open through March 16. The forced prolongation was meant “to ensure Americans in the Northwestern region of the United States have access to affordable, reliable and secure electricity heading into the cold winter months,” the DOE said. It was the fourth coal plant with an imminent retirement date Wright had ordered to stay open; a fifth order — for Craig Station in Colorado — followed a few weeks later.

To justify the “emergency,” Wright cited the North American Electric Reliability Corporation’s Winter Reliability Assessment, which found that the region had enough power to meet the expected peak winter demand, but may need additional resources if there were extreme winter events. But utilities in the region had more than a decade to make other plans to meet demand once the plant closed. Even TransAlta’s president and CEO, John Kousinioris, told investors in a February earnings call that he didn’t expect the plant to be needed to meet any emergencies given how much hydropower was available in the region at the time.

In that light — and given the fact that the federal order is going to expire in a few days — the legislature’s quick-footed policy response is somewhat symbolic, a middle finger to Trump’s coal agenda. But Wright recently extended his order keeping Michigan’s J.H. Campbell coal plant open for the third time, through May 18, and it’s possible he could do the same for the Washington plant.

“It would be great if it were symbolic,” Washington State Representative Joe Fitzgibbon, the bill’s lead sponsor, told me. “The bill felt like a layer of security that they would not start operating again, and then if the federal government tried to get more aggressive in their pursuit of the emergency order, that the state would be in a stronger position to ensure that the plant did not restart operations.”

I talked to Fitzgibbon about how the new law works and whether other states may be able to adopt a similar strategy.

I know that this closure had been planned for a very long time. When did the talks start?

There was a big negotiation and agreement in 2011 between the state and TransAlta, as well as environmental advocates and ratepayer advocates, to negotiate a shutdown timeline. The agreement provided that the plant would close by 2025 — that the first boiler would close in 2020 and the second would close in 2025.

There were a lot of elements to that agreement, including TransAlta making some big investments in the Centralia community to help with economic development, workforce development, clean energy investments. They committed $55 million to that community over the lifetime of the agreement. The state’s end of that bargain was that we would not apply any new greenhouse gas requirements to the plant during the lifetime of that memorandum of agreement.

In 2021 when we passed the Climate Commitment Act, our cap and trade program, we exempted the coal plant from coverage, which was controversial, but it felt like the right thing to adhere to the agreement and to keep the plant on track for closure in 2025.

And then Trump’s emergency order in December happened. Do you know how the plant has responded to that order?

They have not been operating since December 19. They were on track to close by the end of 2025 — they ended up closing a few weeks early, right around when the order came down from the Department of Energy. They were all out of coal; they had laid off their employees and had a skeleton crew. The order really didn’t make any sense because TransAlta did not have a customer. There was no utility or industrial customer looking to buy their power because that would have been illegal under another law that we passed, Washington’s clean electricity law, which said no coal could be in Washington rates after 2025.

The state sued the Department of Energy. TransAlta has been very quiet. My sense, reading between the lines, is that they were not eager to get into a legal fight with either the state or the federal government, so they were in this kind of awkward position.

So why did you feel the need to act with this bill?

I felt that the bill was necessary to lock in the closure plan. Even though they don’t have a buyer today, and no utility on the West Coast could really buy their power under Washington, Oregon or California law, that doesn’t mean they couldn’t have found a customer in Idaho or in Nevada or in Utah. Those seem unlikely, but that wasn’t impossible. I felt that the bill would provide the certainty that they would not restart operations.

What does the bill actually do?

The bill did three things. It repealed their exemption from the Climate Commitment Act. It also repeals their exemption from a much older emissions performance standard that they had also been exempt from under the conditions of the memorandum of agreement, and it repeals a long-standing sales tax exemption on the purchase of coal. So with those three elements, it would become extremely expensive for them to generate power at that facility.

To what do you owe the support behind this bill to?

I would say it was less controversial than most climate bills, but it didn’t get a lot of Republican votes. It got a handful in the House, which is unusual — most of the time, our climate bills don’t get any Republican votes. The fact that TransAlta was not opposing the bill and that nobody was really opposing it — because the only interest that wants to see the plant continue operations is the federal government — helped. I think that the fact that Puget Sound Energy, our state’s largest utility, was planned to be the customer for their transition to natural gas in 2028 meant that there was pretty strong consensus — or as strong of consensus as we ever get on climate legislation in our legislature — that it did not make sense to restart coal generation at that facility.

This legislation draws on some specific Washington policies. Do you think it is replicable in other places?

I think what’s replicable in other places is cap and trade. Washington and California are the only states that have economy-wide cap and trade programs. I think it is a testament to the power and durability of having an emissions cap. Our circumstances are a little bit unique here because we only have one coal plant and we have a lot of hydropower, but I think if we didn’t have cap and trade in place, the likelihood of the plant starting up again would have been higher, as well as the power of our 100% clean electricity law.

It’s a little odd that the Trump administration targeted this plant considering it was going to re-open as a natural gas plant. What do you make of that?

It’s strictly ideological for them. They’re so closely tied with the coal industry that I think that Chris Wright was looking for any coal plant that was scheduled to close around the country that he could stop closing. I think that they don’t understand our region and didn’t understand our laws and didn’t understand our electricity markets. I don’t know if other coal plants that have been proposed for closure are planned for transition to gas. In general I’m not a big fan of new gas generation, but I thought if there was anywhere it made sense, it was in this one location where so much of the infrastructure could be repurposed — where it wasn’t a brand new facility that was going to have a long lifespan. They would still have to stop generating gas power by 2045 under our clean electricity law.

I think the feds overplayed their hand. Our laws and our commitment as a state to getting off fossil fuels were more than they could overcome here, and I would love for other states to learn from Washington’s experience in how successful you can be if you stand your ground against the federal government.