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Opinion >  Guest Opinion

Matt Nykiel, Cesia Kearns and Anne Hedges: The right thing to do with the tax windfall: Help Colstrip

By Matt Nykiel, Cesia Kearns and Anne Hedges Special to The Spokesman-Review

When you get a big tax return, it’s tempting to spend it right away on a gift or vacation. But we all know it’s responsible to use the savings to pay bills or invest for the future.

That responsible approach 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 particularly merits investment for its future is Colstrip, Montana.

The coal-burning power plant in Colstrip has powered homes and businesses from Montana to Idaho to Washington State for decades, but is no longer cost competitive with less expensive energy sources. The utilities that own it – among them Avista in Idaho and Washington, NorthWestern Energy in Montana, Puget Sound Energy (PSE) in 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 provides a place to start.

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

Investor-owned utilities, like any business, strive to make money for shareholders, so it is natural for utility executives to try to steer some of the gain from the tax break to their investors. But let’s be clear: utility shareholders didn’t generate the money that power companies are about to save under the new tax law. That money came from families and businesses paying their electricity bills based on the old tax rate. Utilities were saving that money to pay taxes, which just decreased 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 Colstrip’s coal-ash waste will be hundreds of millions of dollars for customers of Avista, NorthWestern, Portland General Electric and PSE. Under the law, the utilities will make a profit, paid for by consumers, on every dollar they spend to clean up the mess they made. This makes no sense. Setting aside this tax windfall revenue will help make sure consumers aren’t stuck paying utilities a profit to clean up the contamination they caused.

PSE has led the way already on both counts. Last year, the utility committed to provide $10 million for an economic transition fund for Colstrip and Rosebud County. Half of those funds are coming from PSE shareholders, not ratepayers. Gov. Steve Bullock and Attorney General 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 responsibility, publicly committing last year to setting aside hundreds of millions of dollars to pay its share of cleanup costs. Both efforts by PSE, on economic transition and water cleanup, are notable and should be matched by every 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 commitment 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 workers, residents and local businesses to help fund an economic transition. That’s something consumers who have been powered by the Colstrip plant and Rosebud mine can get behind, too.

Matt Nykiel is a conservation associate of the Idaho Conservation League. Cesia Kearns is a deputy regional director of Sierra Club. Anne Hedges is deputy director of the Montana Environmental Information Center.

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