The Washington UTC rejected a request from the state's investor-owned utilities to collect $15.4 million in replacement power costs accrued over a four-month outage of Colstrip units 3 and 4 in 2018 because the units failed an emissions test.
In a 2-1 vote, the commission ruled on March 20 that because of "a lack of documentation of decision making prior to and leading up to the shutdown of the units, Avista, Pacific Power, and PSE failed to prove that the companies' costs for obtaining replacement power during the 2018 Colstrip outage were prudent."
However, the commission will allow the three utilities to recover approximately $1.7 million in post-outage maintenance costs.
Commissioner Jay Balasbas dissented, saying that "while my colleagues conclude the only way to determine prudence of operational decision-making is with contemporaneous documentation, I believe a reasonable evaluation should also include elements of common sense, the necessary reliance on the expertise of employed or contracted utility personnel, and the testimony of credible witnesses."
The twin units were taken off line from June to September 2018 after a second quarter emissions test showed the plant was out of compliance with federal mercury and air toxic standards (MATS) and particulate matter (PM) levels.
The commission said the results of emissions tests in February 2018 on units 2, 3 and 4 "produced results higher than ever before" and that the Colstrip ownership group failed to recognize that it may be an ongoing problem with the units.
"These were red flags or concerns that should reasonably have been recognized by the companies," the commission said. Decisions should have been made shortly after those tests in February regarding what action was appropriate and prudent to ensure Colstrip would comply with its second quarter testing, the WUTC order said.
Instead, it appears the utilities relied on Talen Energy's word that "its expectation and recurring recommendation that Colstrip would pass its second quarterly (Q2) MATS PM Testing." The commission said it was "frustrated by the lack of contemporaneous documentation from any of the companies regarding this discussion or decision making."
"The minutes contain no indication that the co-owners discussed what actions were appropriate to ensure compliance with Q2 MATS PM test or that the Q1 MATS PM testing results were even discussed at all," the commission said in its order.
The commission said the case lacks any documentation that the Colstrip co-owners asked Talen for any information on the maintenance of units 3 and 4 after they failed the February 2018 tests, and it was unable to determine if Talen Energy conveyed any information on the significance of the tests to the owners.
"If this information had been provided, it may have informed the companies and their experts of the need to consider additional or different actions to ensure that Colstrip passed the Q2 MATS PM tests," the commission said.
The three IOUs argued that if Talen had told them in February how significant the issue with units 3 and 4 were, they would have come up with an alternative plan.
"From what has been presented in this case, we can only conclude that the co-owners accepted without challenge, both Talen's assurances that the Q2 MATS PM testing would be successful and its lack of disclosure regarding the significant matters taking place at Colstrip," the order stated.