- The Washington Utilities and Transportation Commission has approved a settlement allowing Microsoft to fulfill its clean energy goals by buying power on the retail power market, rather than purchasing energy from Puget Sound Energy.
- PSE created a tariff last year to allow for the new retail service for large industrial or commercial customers, and Microsoft agreed to pay a transition fee of $23.6 million to ensure customers are not harmed.
- One issue not settled in the approval, however, is whether Microsoft will help PSE pay to mothball the Colstrip coal generation plant. The tech giant was PSE's largest customer, notes The Seattle Times, and regulators say the company is legally obligated to help pay a portion of the costs.
Washington regulators' decision follows a trend of large power customers looking to clean up their generation mix, and leave the incumbent utility's service territory. For instance, major casinos and tech companies in Nevada paid hefty fees to exit NV Energy's service in search for more competitive green energy on the power markets. But these defections raise questions over how utilities will recover costs even as renewable energy demand grows.
And this is a question facing PSE as it sets aside funds to pay for Colstrip's closure.
PSE utility owns 50% of the older units 1 and 2, and previously estimated shuttering the units would cost between $130 million to $200 million. The Times pegs the most recent estimates of PSE's share at $103 million, and said the UTC found Microsoft would be legally required to pay some of decommissioning costs.
That stipulation, however, was not included in the settlement approved by the UTC, drawing criticism from at least one commissioner.
Commissioner Jay Balasbas wrote separately in the UTC's approval, that "Microsoft should have also made a commitment to paying its fair share of any Colstrip costs."
"I reiterate the conclusion that Microsoft’s departure as a PSE core customer will not relieve it of any responsibility to contribute to any Colstrip costs," Balasbas wrote. "Conditioning approval of the settlement agreement on
the Colstrip issue would have further advanced Microsoft’s commitment to PSE’s remaining ratepayers."