The right thing to do with the tax windfall — help Colstrip

When you get a big tax return, it’s tempting to spend it right away on a gift or vaca-tion. But we all know it’s re-sponsible to use the savings to pay bills or invest for the future.
That responsible ap-proach is what’s needed now from electric utilities that are about to get a big corporate payout from the new tax law passed by Congress last year. Instead of enriching executives and shareholders, power companies should use that money to support local communities and workers. One community that par-ticularly merits invest-ment for its future is Col-strip, Montana.

The coal-burning pow-er plant in Colstrip has powered homes and busi-nesses from Montana to Idaho to Washington State for decades, but is no long-er cost competitive with less expensive energy sources. The utilities that own it – among them NorthWestern Energy in Montana, Puget Sound Energy (PSE) in Washing-ton, Avista in Idaho and Washington, and Portland General Electric in Oregon – have a responsibility to support new economic opportunities for the workers and residents of the Colstrip area and to clean up the local water contaminated by years of coal-ash waste storage. The tax windfall coming to Colstrip’s owners pro-vides a place to start.

The recently passed tax bill does not deliver much relief to middle in-come families, and in-stead gives corporations a huge 40 percent tax cut. One Montana utility regu-lator estimates that North-Western Energy, the state’s largest utility, could get back as much as $30 million each year un-der this tax bill. Every power company invested in Colstrip, including PSE and Avista, is likely to see a major windfall like this.

Investor-owned utili-ties, like any business, strive to make money for shareholders, so it is natural for utility exec-utives to try to steer some of the gain from the tax break to their investors. But let’s be clear: utility shareholders didn’t gener-ate the money that power companies are about to save under the new tax law. That money came from families and busi-nesses paying their elec-tricity bills based on the old tax rate. Utilities were saving that money to pay ta

xes, which just de-creased significantly. That’s why consumers should insist that the tax cut utilities just received should assist impacted communities, not further line shareholders’ pockets.
Investing in economic diversification, supporting workers, and cleaning up contaminated water in Colstrip should be a top priority for these utilities. The tab for cleaning up the water polluted by Col-strip’s coal-ash waste will be hundreds of millions of dollars for customers of NorthWestern, Avista, Portland General Electric and PSE. Under the law, the utilities will make a profit, paid for by consum-ers, on every dollar they spend to clean up the mess they made. This makes no sense. Setting aside this tax windfall rev-enue will help make sure consumers aren’t stuck paying utilities a profit to clean up the contamina-tion they caused.

PSE has led the way already on both counts. Last year, the utility com-mitted to provide $10 mil-lion for an economic tran-sition fund for Colstrip and Rosebud County. Half of those funds are coming from PSE shareholders, not ratepayers. Gov. Steve Bullock and Attorney Gen-eral Tim Fox have set up a task force to guide the fund’s use. Other utilities should contribute to this fund as well to help make sure workers and the communities aren’t left stranded when the plant inevitably closes.

On water cleanup, PSE has also taken some re-sponsibility, publicly com-mitting last year to setting aside hundreds of millions of dollars to pay its share of cleanup costs. Both ef-forts by PSE, on economic transition and water cleanup, are notable and should be matched by eve-ry owner of Colstrip. So far none of Colstrip’s other owners has stepped up to do their part, either on transition or cleanup.

Colstrip’s owners could show their commit-ment to a community that they will be leaving in the not-too-distant future by investing now in economic diversification and water restoration. The power companies owe it to work-ers, residents and local businesses to help fund an economic transition. That’s something consum-ers who have been pow-ered by the Colstrip plant and Rosebud mine can get behind, too.

Submitted by Anne Hedges, Deputy Director, Montana Environmental Information Center Matt Nykiel, Conser-vation Associate, Idaho Con-servation League Cesia Kearns, Deputy Regional Director, Sierra Club