The Centralia Model: How to Shut A Coal Plant Without Shutting Down its Community

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On New Year’s Eve in 2020, TransAlta Corporation, a Canadian firm based in Alberta, ceased power production from the first of two coal-fired burners in Centralia, Washington. The second burner will close in 2025, shuttering the coal plant after over half a century in service. In preparation for the shutdown, the company allocated $55 million to support the regional energy and economic transition. So, how well has TransAlta lived up to the commitment?

Back in 2011, TransAlta came under pressure from environmentalists to close the coal plant, or significantly reduce its energy production from coal, as early as 2015. Advocates had zeroed in on the 1,376 MW plant as the state’s largest source of carbon emissions, toxic mercury, and other pollutants that contributed to haze around Mt. Rainier. 

Hundreds of TransAlta supporters gathered in Olympia to protest the rapid timeline. The company supplied 10 percent of Washington’s power, and it had already committed to halving mercury emissions at the plant by the following year. Just as important, the plant employed 400 contractors and 300 full-time employees, with salaries more than twice the county’s average household income. Such immediate action would jeopardize the state’s workers and the price of electricity, supporters argued. 

“I had maybe a one in 100 chance of getting this bill to pass,” says Phil Rockefeller, former Senator (D-Bainbridge) and sponsor of SB 5769, the bill that initially gave TransAlta until 2020 before meeting strict greenhouse gas reductions. As the legislative session wore on, however, Rockefeller’s bill picked up support from experts in public health, the faith-based community, and the National Park Service. 

In closed-door meetings that took place parallel to the legislative session, then-Governor Christine Gregoire negotiated a deal with the company. In exchange for entry into long-term energy contracts, guaranteeing sales through 2025, the company would install additional air pollution controls and invest $55 million into the local economy. 

The local money would be organized into three buckets: economic and community development, weatherization, and energy technology. The first two would fund only Lewis and Thurston counties, where the company produced the most jobs and tax revenue, while the third bucket would fund projects across the state. 

Rockefeller remembers signing onto the substitute bill near the final day of the legislative session, pleased with the funding commitment. “This was a major profit center for TransAlta as a corporation,” he explained, “And in my opinion, they could afford to make a contribution to the better of that community.” 

Today, 10 years on, 115 employees continue to operate the Centralia plant, a significant reduction from the original 300. By 2014, the county had already lost $180 million in taxable property, due to the declining value of TransAlta’s land. This gap led to staffing, salary, and budget cuts at a local fire authority. However, the long-term plan gave the company time to mitigate the effects of the transition. According to Lori Schmitt, senior advisor for U.S. stakeholder relations at TransAlta, almost 90 employees have left voluntarily since 2011, to retire or pursue different jobs. TransAlta has also held workshops for the remaining employees to build resumes and interview skills. 

True financial support arrived with the establishment of the Centralia Coal Transition Grants, which announced its first projects in 2016. As of July 2021, the oversight board has committed roughly $32 million, including $8 million dedicated to TransAlta employees. 

This year, over $2 million went directly to 64 workers who were displaced with the retirement of the first burner. Another $1 million is available for worker retraining and education, and worker spouses may apply for similar grants. (The list of recipients is published and updated regularly on this website.) 

IBEW 77 lobbyist Bob Guenther, who represents organized labor on the board, speaks highly of the group’s ability to remain collaborative and flexible. Even with five company representatives and four civilian representatives, no application has ever been controversial enough to split them down the middle. 

Together, they’ve funded large-scale projects, like shore power connectors in Seattle and Tacoma, which will reduce carbon emissions and diesel pollution from berthing ships. They’ve also seeded solar installations, scholarships, and energy efficiency improvements throughout Lewis and Thurston counties, generating savings for residents. 

Guenther of the IBEW is realistic about long-term gains. “Retraining is great,” he says, “But it doesn’t make up for the fact that we’re losing those jobs, and we’re losing that tax base in the county.” His goal is to recreate high-paying jobs, particularly those in energy, where workers can apply transferable skills. 

It’s too early to say what the grants’ overall impact has been on these counties. According to recipients, however, the investments have enabled the region to adapt. Let’s take a more detailed look at the encouraging results.

Five years ago, the Lewis County Economic Development Council found a gap between available jobs in the region and workers with mid-level skills—those with more training than a high school diploma, but less than a four-year bachelor’s degree. Research by the education nonprofit Washington STEM also projects labor market demand for workers in construction, nursing, and welding for the Pacific Mountain region, which includes both Lewis and Thurston counties.

With these trends in mind, the Centralia College Foundation applied for a coal transition grant to build a 12,000 square foot flexible training center that can house programming for a range of jobs. Christine Fossett, executive director of the Foundation, described a classroom lined with hospital beds for future nursing assistants, which opened amid the pandemic. 

Soon, the back room will be filled with forklifts, while a driving simulator prepares students for commercial licensing exams. “Without a doubt,” Fossett affirmed, “This provides the community the ability to educate a workforce, or reeducate a workforce, as it’s needed in order for economic stimulus.”

Other institutions, like the New Market Skills Center, are also responding rapidly to shifting employer demands. A partnership between 10 school districts in Southwest Washington, the New Market Skills Center hosts technical training for high school students for careers in automotive services, collision repair, cosmetology, and other prominent industries.  

Since 2017, thanks to TransAlta scholarships, two graduates received $1,500 toward vocational or graduate degrees. While this amount may seem small relative to some tuition rates, according to Ron Crawford, Director of the New Market Skills Center Foundation, “For the Lewis County folks, it really is a shot in the arm for them, because they get sometimes a little bit left out [relative to larger school districts].” Because the foundation received the grant as a 10-year lump sum, they were able to invest it with a steady growth rate, ensuring the scholarships will extend years beyond the anticipated funding period. 

As with the education grants, the Lewis County Public Utility District (PUD) has witnessed the transition funds paying back in more ways than one. The PUD has received three grants for weatherization since 2017, ranging from $1.08 million to $1.68 million. The first round, says Willie Painter, public affairs manager at the PUD, enabled them to expand their services to low-income customers. Residents who earn less than twice the national poverty rate can now apply for grants from the PUD to install insulated windows, ductless heat pumps, or other energy efficiency measures. 

As of this funding period, the PUD has helped low-income customers save 1.9 million kWh, the equivalent usage of 158 homes in one year. With 650 measures completed, sometimes with two or three per household, grant recipients in Lewis County now save an aggregate of approximately $128,500 per year. As an added benefit, local contractors also land more opportunities for business. 

Further out from Centralia, the Bonneville Environmental Federation (BEF) recently received a coal transition grant for almost $1.9 million, which it will leverage along with state funds for a renewable hydrogen demonstration project, in partnership with Toyota, the Douglas County PUD, and the Renewable Hydrogen Alliance. In contrast to electric vehicles with batteries, fuel-cell vehicles take as little as five minutes to charge and may require fewer stops, making them attractive for long-distance, heavy-duty vehicles.  

However, they lag behind electric vehicles, which are becoming more commercially viable and have policies in place to support subsidies and charging stations. With a new hydrogen refueling station, a fleet of 10 passenger vehicles, and two buses, BEF and its partners hope to advance hydrogen as a low-carbon option for transportation in the Pacific Northwest. 

Evan Ramsey, senior director of the renewables program at BEF, said this grant served as the catalyst to gain support for hydrogen and its potential market transformation from public entities. Richard DeBolt, executive director of the Lewis County Economic Development Council, has also expressed the hope for this project to create an “innovation cluster” for energy in the area. 

The shared goal among recipients highlighted here is to not only sustain Centralia through the transition, but to build up new industries and ensure the investments grow over time.

How replicable is the Centralia example? In 2019, the Bozeman Daily Chronicle published an article on the Colstrip coal mine in Montana, titled “Lessons from Centralia.” The natural gas boom, paired with the rise of cheap, renewable energy, has challenged coal’s competitiveness nationwide, leaving coal towns like Colstrip to wonder what’s next. The TransAlta deal remains one of the only legislatively mandated closures of a coal plant and a sizable financial commitment from a company to the community. Colstrip is studying what created the transition that Bob Guenther describes as “a smooth glide path.” 

Home to Montana’s largest electricity generator, Colstrip originally operated four coal-fired burners. Over the past decade, however, Colstrip’s power generation fell from its peak of 16,000 GWh of net electricity in 2010 to 13,000 GWh by 2019, according to the U.S. Energy Information Administration—the result of a changing energy market. Two the four burners closed in 2019, following lawsuits from environmental groups and the owner’s financial concerns over fuel costs. 

However, Colstrip differs from Centralia, since the plants support a smaller town, with a population of 2,500 and primary industries in energy, education, and agriculture. Hours away from the larger towns, Colstrip faces limited options for alternative jobs. 

One bright spot could be environmental remediation. Coal plants inevitably produce large amounts of coal ash in the surrounding region, which pollute the air, water, and soil. As plants retire and workers look for new jobs, one transitional solution, posited by the Northern Plains Resource Council, could be job creation through the excavation of coal ash and groundwater monitoring.   

In Centralia, efforts to reclaim the coal mine, which sits adjacent to the coal plant, are ongoing. In 2006, TransAlta abruptly closed the mine, laying off 550 workers and contributing only $5 million for the region to recover. The fresh memory of that closure, and the insurmountable pressure from policymakers, no doubt led to TransAlta’s agreement in 2011. 

TransAlta owns the entirety of the Centralia plant, whereas the Colstrip station has six owners, five of which are based out of state. Environmental think tank Resources for the Future analyzed prospects for Colstrip, ultimately concluding that greater coordination between the government, plant owners, and residents would strengthen the ability of all to respond to economic uncertainties. The current funding buckets, $10 million from one partial owner, $3 million from another, as well as state and federal funding, could still be administered together, in tandem with remediation jobs. 

Indeed, the long-term, centralized planning and funding procedures in Centralia, buoyed by significant resources, have been the greatest strength of Washington’s departure from coal. These principles, and the numerous ideas generated by the Centralia Coal Transition Grants board, offer insights into how to provide for displaced workers and invest in the next generation of Lewis and Thurston counties. 

Looking back on the origin of the deal, Phil Rockefeller points to numerous good faith actors, from Dan Swecker, the former Republican senator he collaborated with on a number of issues, to Bob Guenther, who he describes as “a hero” for bringing the union workers on board. Guenther, for his part, recalls a moment on the steps of the capitol, when Rockefeller and he were not so friendly. “He walked by me, and I threw my voice at him again, I said, ‘Senator Rockefeller,” Guenther relayed, “Have you ever been to that Centralia power plant?’” 

He hadn’t. But by the time he had that summer, both men would speak highly of one another. “I learned something that I had known in the abstract,” Rockefeller considers, “And that was that [the coal plant] was the single most important asset property-wise in Lewis County.”

Now, “If you look at the distribution of that money,” Guenther reflects, “I think we’ve done some pretty doggone deep things with that small amount of money.”

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Erin X. Wong is a writer and reporter based in New York City. She is originally from Seattle, where her work has been published in Seattle Met and Post Alley. She is currently pursuing her master’s degree at Columbia Journalism School. 

1 COMMENT

  1. Very encouraging, and suggestive of a win-win approach to environmental disputes. The Ruckelshaus Center at UW/WSU specializes in resolving long disputes this way, and long ago the Bullitt Foundation tried to work with smaller communities to find jobs out of environmental interventions (clean up the pulp pollution in Willapa Bay and bring back more oysters). You don’t win by backing opponents into a corner.
    The article is further encouraging by pointing out how much smaller cities and rural communities want, without goading from Seattle groups, to steward nature better and shift to more sustainable jobs.

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