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Agreement would mean end to coal-burning at Centralia plant

Washington's only coal-fired power plant will shut down one of two boilers by 2020 and phase out coal-burning by 2025 under an agreement negotiated between TransAlta, state officials and environmental groups.

SEATTLE - Washington's only coal-fired power plant will shut down one of two boilers by 2020 and phase out coal-burning by 2025 under an agreement negotiated between TransAlta, state officials and environmental groups, according to a proposal released Saturday.

The Canada-based company had been under legislative pressure this session to shut down the facility as early as 2015. The parties have been negotiating this week to present a plan to lawmakers before a legislative cutoff Monday.

This is a historic agreement. It's a coal company, environmental groups, labor, and public officials sitting down, said Kathleen Ridihalgh with the Sierra Club's Beyond Coal Campaign, hammering out the details and showing when we put our minds to it we can find a responsible way off of polluting fuel resources.

Within hours of the announcement from the Governor's office, the state Senate passed the amended bill, LB5769, by a margin of 36-13. The House is expected to debate the bill on Monday.

The proposed agreement allows TransAlta to enter into long-term contracts for coal power, which is currently prohibited, said company spokeswoman Angela Mallow. It requires gradual reductions in greenhouse gas emissions before 2025.

David Romans, who owns Pearl Street Market in Centralia, is concerned.

The steam plant is the last major employer of good wages in Lewis County, he said.

The plant currently employs more than 300 union and non-union workers, and an average employee salary is $88,520, according to union letters.

For 12 years, Romans has seen plant workers stop by his market on the way to work. When the plant's coal mine shut down in 2006, he said business dropped 40 percent.

People that had the money to spend on things like lottery tickets and luxury spending et cetera, they had to move out of state, he said. It affects me, my business, my other business in town, all the local businesses will suffer.

Lawmakers said they've tried to take that into consideration, with TransAlta agreeing to provide $30 million in community reinvestment and $25 million to support innovative energy technologies in the state.

We believe it will provide certainty for TransAlta, our employees and our community, Mallow told The Associated Press. We're encouraging legislators to support the bill.

Clifford Traisman, state lobbyist for both the Washington Environmental Council and the Washington Conservation Voters, said the agreement is a win for all parties. We feel like we all -- the company, the local community and the environmentalists -- have defied the odds to get to this place, he said.

The reason there's a staggered phase-out is for the workers, Ridihalgh said.

The 1,376-megawatt power plant has been an environmental target because it spews out considerable air pollution. It is the state's top point source of greenhouse gases, toxic mercury and nitrogen oxide, and second in sulfur dioxide that causes acid rain, according to Department of Ecology data.

Critics worry about harmful health effects of burning coal, while exposure to mercury can affect the human nervous system.

It's a public health disaster, said Doug Howell, campaign director of the Sierra Club's Coal-free Washington campaign. It is the dirtiest form of energy of all fossil fuels.

Transitioning the plant off coal is seen as key for the state to meet climate change goals that lawmakers set in 2008.

What a proud day for the Centralia community, and all of Washington state, Gov. Chris Gregoire said, noting that the compromise provides cleaner air, while ensuring job protection for the community and leaving enough power on the grid.

Sen. Phil Rockefeller, the Bainbridge Island Democrat who is the prime sponsor of Senate Bill 5769, said This is an agreement that works for the company, the community and the people of our state.

A more aggressive House measure, which had set a shutdown date of 2015, died in committee. Rockefeller's proposal had called for phasing out coal as early as 2020 but was amended to allow an agreement to be negotiated.

Under the agreement, TransAlta will install additional air pollution controls in 2013 to further reduce emissions of nitrogen oxides at the plant. Environmentalists have fought hard for those tougher controls over the years.

TransAlta had garnered considerable support from union workers, business groups and the community in its efforts to oppose an early shutdown of the facility. Several hundred people, including Centralia's mayor, labor unions and workers, rallied last month on the steps of the Capitol to support the company.

Company officials and community members said the company's contributions go beyond the nearly 300 jobs it provides at the plant. TransAlta has paid for new athletic fields, given millions to the United Way of Lewis County and donated equipment and employee time when local rivers flooded in 2007.

TransAlta had said it needed time to develop other renewable energy, to decommission the facility and to allow half of its workers to reach retirement age.

The Centralia plant accounts for 12 percent of the power generated in Washington, and lawmakers and state officials have worried about the stability of the electrical grid.

The company's plan is to build replacement power generation, most likely a large-scale gas-fired facility by 2020, Mallow said. The agreement gives TransAlta expedited permitting for a natural gas facility at the existing Centralia site, she added.

The company said more than half of the power from the facility served Washington state in 2010, with 35 percent serving Oregon and the remaining 15 percent going elsewhere. It said it has short-term contracts with Washington utilities, which it declined to name for confidentiality reasons, and sells power on the market.

The Calgary-based company is one of Canada's largest wind power operators. In Washington, it operates a small hydropower dam and a 248-megawatt natural gas plant.

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