Centralia, USA faced disaster when its local coal plant run by TransAlta closed. But after getting a permit to build a natural gas plant on the same site, the company has committed $55 million for community development. Ben Paulos explores at the transition away from coal in Washington State.

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Despite proclamations from the Trump Administration that “the war on coal is over,” coal power plants continue to shut down.  The Sierra Club counts 268 coal plants that have closed or announced specific plans to retire, constituting half of the nation’s coal capacity.

While the transition is good news for the planet, it can spell disaster for communities dependent on power plant jobs and tax revenues.

But a plant in Washington state is showing that the transition away from coal need not be done at the expense of workers.

The massive coal plant near Centralia, Washington has been the communities’ biggest employer since 1971 – as well as the state’s biggest pollution source.  The 1340 megawatt plant, owned by the Canadian company TransAlta, is responsible for 70 percent of the state’s power sector CO₂ emissions.

It has been a hard fought battle to phase out coal in the Pacific Northwest.  The region’s power system is dominated by enormous hydroelectric dams like the Grand Coulee Dam, the largest in America.  Only a few coal plants were built, but like plants everywhere, they were huge investments and carefully guarded by their owners and the communities dependent upon them.

In the late 2000s, advocacy groups like the Sierra Club and EarthJustice began targeting the last two big plants in the region, Centralia in Washington and the smaller Boardman plant in Oregon.

Boardman, a 550 megawatt plant owned by Portland General Electric, was the first to go, with a 2010 agreement to shut it down by 2020.

Centralia was tougher.

The deal

EarthJustice challenged Centralia’s air pollution permit in 2009, alleging that it didn’t use the best technologies, as required by law.  A bill introduced in 2011 called the question, leading to a negotiation between TransAlta, environmental advocates, and labor groups.

The local community, heavily dependent on the plant, mobilized in opposition, bringing workers and their families to the capitol in Olympia to protest.

The plant employs about 300 workers, with an average wage over $80,000, a very respectable income for the small town of 16,000.

Centralia Mayor Harlan Thompson said the TransAlta plant is an important employer and the only major industry around, calling it “our Microsoft and Boeing put together,” after the two corporate giants in Seattle.

Bruce Nilles, director of Sierra Club’s Beyond Coal campaign, said community impacts were a priority in the negotiations.

“[The governor] basically locked us in a room for two days and said, ‘You guys need to work this out. You need to come up with a reasonable way to transition this coal plant in a way that’s respectful to the workers and the community,’” he told the Alberta Climate Summit in Edmonton in 2015. “And that’s what we did.”

The resulting legislation will result in half the plant being shut down by the end of 2020 and the other half by the end of 2025.

Sierra Club was initially seeking a retirement date of 2015.  But a longer timeline allowed 40 percent of the employees to reach retirement age and gave non-retiring employees another 8 years in their current jobs before the plant closed.

TransAlta got an expedited permit to build a natural gas plant on the same site, and kicked in $55 million for a community development fund.

“We thought, okay, a little more time here, and we get the outcome we want, which is retirement,” says Nilles. “And in a way where the unions were in support of the final outcome as was the local community. That was really a win-win for everybody.”

The fund

“Being a good neighbour means investing in the communities in which we operate,” said Dawn Farrell, TransAlta president and CEO, in a 2015 press release.

The settlement and legislation established the Centralia Coal Transition fund, with annual contributions adding up to $55 million by 2023.

“The funding enables the community to transition to new sources of energy over a reasonable timeframe as well as manage the economic and employment implications of the scheduled plant closures,” she said.

“The company providing financial support for the workers and community as well as new clean energy technologies was a critical factor that made the 2011 agreement to close the coal-fired plant a landmark,” said Nancy Hirsh, executive director of the NW Energy Coalition.

The grant fund is divided into three parts, with $10 million for weatherization and energy efficiency projects; $20 million for education, job training and economic development projects; and $25 million for energy technology investments.  At least $5 million of the job training fund will be dedicated to Centralia plant workers.

Each part of the fund is managed by a board of local leaders and stakeholders.

To date, the fund has paid out nearly $3.7 million. The largest grant, given out last month, was to the Centralia School District to build a district-wide evaluation and instruction plan to prepare students for college and vocational careers.

Other grants have been used to replace the heating system at an elementary school, put solar panels on a high school and a college, and replace the lighting at a football stadium with high-efficiency LEDs.

“Coal power was a part of our past,” said Washington Governor Christine Gregoire at the bill signing in 2011. “Our prosperity now depends on our ability to move forward with a clean energy future.”