BILL REQ. #:  H-1272.3 

Read first time 02/03/11.   Referred to Committee on Environment.

     AN ACT Relating to strengthening local economies by reducing emissions from coal-fired power generation through decommissioning; amending RCW 43.160.076; adding a new section to chapter 70.94 RCW; adding a new section to chapter 43.155 RCW; and adding a new chapter to Title 80 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   (1) The legislature finds that the combustion of coal creates significant health hazards for the citizens of Washington. Coal combustion produces large amounts of harmful by-products, including ammonia, arsenic, lead, mercury, hydrochloric acid, nitrogen oxides, sulfuric acid, sulfur dioxide, particulate matter, greenhouse gases, and an assortment of toxic heavy metals, all of which have been determined by medical science to be harmful to human health and safety. When coal is combusted in great quantities for the purpose of generating electricity, these health impacts increase exponentially and in proportion to the quantities combusted.
     (2) Although some of these harmful materials are collected, stored, or treated during the process of coal combustion for generating electricity, thousands of pounds of these harmful substances are released into the air, travel many miles beyond the site of combustion, precipitate into rivers, lakes, and streams, and permeate the ground every year, creating public health hazards that may be present for many generations. Some of these materials also pose a threat to the cultural history of Washington and its peoples by causing damage to ancient native American petroglyphs and pictographs present in the state.
     (3) The legislature also finds that coal-powered electricity generation is one of the largest sources of greenhouse gas emissions in the state, accounting for approximately ten percent of the state's total greenhouse gas emissions and nearly eighty percent of such emissions from the generation of electricity in the state. In 2007, the legislature found that Washington was especially vulnerable to climate change caused by greenhouse gases and in 2008 enacted chapter 14, Laws of 2008 that established statewide limits for reducing overall greenhouse gas emissions to 1990 levels by 2020.
     (4) The legislature further finds that very large coal-fired electric generating facilities, together with nearby coal mines that have historically supplied coal to the facilities, are major industrial facilities with a limited useful life. At the end of the useful life, the closure of these facilities, including the removal of structures, site reclamation, and preparation of the site for future beneficial usage, requires significant planning and funding. To ensure that all toxic materials are removed from these facilities and that the surrounding communities are fully assured that all applicable and appropriate remediation standards are met, it is necessary to require that the facility owner demonstrate during the facility's operation that sufficient funding will be available for closure and postclosure activities.
     (5) To that end, the legislature intends that the state ensure that: (a) Facilities related to the combustion of coal for producing electricity be decommissioned in such a manner as to bring the potential public health hazard to a minimum; (b) environmental inspection and monitoring as is necessary for verifying the status of decommissioned facilities be conducted; and (c) the local community be actively involved in the process of planning for the eventual closure of the facility and postclosure activities.
     (6) The legislature also finds that it is in the public interest: To assist local communities in which such very large facilities may be closed; to provide for future economic uses of the site; and to increase economic opportunities in the community.

NEW SECTION.  Sec. 2   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Authorized decommissioning plan" means the plan to accomplish transition and decommissioning that has been approved by the advisory board created in section 6 of this act.
     (2) "Decommissioning" means actions taken to reduce or eliminate the potential public health and safety impacts of a building, structure, or plant that has permanently ceased operations, including, but not limited to, actions such as decontamination, demolition, disposition of waste materials, and rehabilitation or preparation of the facility for future use.
     (3) "Department" means the department of ecology.
     (4) "Facility" includes all buildings, structures, plants, processes, and operations on one contiguous site under control of the same owner or operator within ten years prior to the effective date of this section.
     (5) "Fungible infrastructure" includes roads, sewer lines, power lines, interconnects to public infrastructure, and all infrastructure that is not specific to coal combustion and which may be used for purposes other than coal-fired electricity generation and transmission.
     (6) "Nonfungible infrastructure" includes any structure or infrastructure that is integrally specific to, and which is used primarily for, coal-fired electricity generation and transmission.
     (7) "Qualifying plant" means a facility within Washington that, in each of the five years preceding the effective date of this section, combusted more than one million tons of coal per year for the purpose of generating electricity for sale.
     (8) "Toxic materials" means materials determined by the department, in accordance with federal health standards, to be harmful to human health based on composition, quantity, or both.

NEW SECTION.  Sec. 3   (1) Every qualifying plant shall prepare a preliminary decommissioning plan. By July 1, 2013, the department shall adopt rules for the preparation of a preliminary decommissioning plan. The department shall consult with the energy facility site evaluation council to harmonize the standards developed by the council for site restoration and preservation applicable to facilities subject to a site certification agreement under chapter 80.50 RCW with the rules developed under this section. The department shall also consult with the department of natural resources to harmonize the standards required by this section with the site reclamation requirements under the surface mining requirements of chapter 78.44 RCW.
     (2) The rules required under subsection (1) of this section must require the preliminary decommissioning plan to address the following: Decontamination of toxic materials at the facility; dismantling and disposal of nonfungible infrastructure, equipment, and material; either repurposing or rehabilitation, or both, of fungible infrastructure; and preparation of the facility for either future use or sale, or both. The department shall perform necessary inspection and monitoring as required by this section and the rules adopted under this section. All preliminary decommissioning plans must be written in conformance with the format prescribed by the rules adopted under this section. The rules must require the preliminary decommissioning plan to include, but not be limited to:
     (a) A written policy articulating management and corporate support for the preliminary decommissioning plan, both at the local subsidiary level and at the parent corporation level, and a commitment to implementing planned activities and achieving established goals;
     (b) The preliminary decommissioning plan scope and objectives;
     (c) A full description of toxic materials at the site and plans for decontamination and disposal of the material, in accordance with all relevant local, state, and federal requirements;
     (d) A full description of infrastructure at the site that may be useful for purposes other than coal combustion and analysis of how that infrastructure may be used or sold;
     (e) A selection of options to be implemented in accordance with this section;
     (f) An analysis of impediments to implementing the options. Impediments that are considered acceptable include, but are not limited to: Adverse impacts to human health and safety, legal, or contractual obligations, economic practicality, and technical feasibility;
     (g) Specific performance goals for preserving, repurposing, or improving fungible infrastructure that will remain at the site after decommissioning;
     (h) Plans for coordinating with the local community for the future of the site and facilities, including but not limited to relevant economic development in the vicinity of the site;
     (i) A description of how toxic materials will be recycled, managed, and disposed;
     (j) A financial description of the preliminary decommissioning plan;
     (k) A preliminary decommissioning plan implementation schedule;
     (l) Documentation of toxic material reduction efforts completed before commencement of decommissioning; and
     (m) An executive summary of the preliminary decommissioning plan, which must include, but not be limited to:
     (i) The information required by (c), (e), (g), (h) and (l) of this subsection; and
     (ii) A summary of the information required by (d) and (f) of this subsection.
     (3) Upon completion of a preliminary decommissioning plan, the owner, chief executive officer, or other person with the authority to commit management to the preliminary decommissioning plan shall sign and submit the preliminary decommissioning plan, including an executive summary of the preliminary decommissioning plan, to the department and to the transition and decommissioning advisory board created in section 6 of this act. The preliminary decommissioning plan must be updated and revised in coordination with the department and the advisory board created in section 6 of this act.

NEW SECTION.  Sec. 4   (1)(a) Every qualifying plant must, on or before September 1, 2012, and on or before December 31st of each year thereafter until coal combustion at the plant ceases, pay to the trust account required by section 5 of this act a fee for the purpose of decommissioning such a facility.
     (b) The department may receive no more than five percent of fee proceeds from 2012 to perform the duties required by section 3 of this act.
     (2) The fee must be assessed on total annual electricity generated from the combustion of coal in the amount of one dollar per megawatt hour.
     (3) The ultimate parent corporation or holding company that owns or operates a qualifying plant is responsible for any costs associated with eliminating toxic contamination at the facility, dismantling infrastructure at the facility, or disposing of waste created by the dismantling of infrastructure at the facility if those costs exceed the amount reserved in the trust account required by section 5 of this act.

NEW SECTION.  Sec. 5   (1) All moneys to be paid by a qualifying plant for the purpose of decommissioning must be promptly deposited by the qualifying plant or its parent entity in a trust account, maintained for the purpose of holding such decommissioning funds, with a financial institution as defined by RCW 30.22.041 or licensed escrow agent located in Washington. Except as provided in subsection (2) of this section, all interest paid on trust account deposits must be reinvested in the account. The qualifying plant shall provide the department and the advisory board created in section 6 of this act with a written accounting of all relevant deposits and provide written notice of the name, address, and location of the depository and any subsequent change thereof. If ownership of the qualifying plant is transferred to another person, entity, or corporation, any sums in the trust account affected by such a transfer must simultaneously be transferred to an equivalent trust account of the successor owner, and the successor owner shall promptly notify the department and the advisory board created in section 6 of this act of the transfer and of the name, address, and location of the new depository. No creditor of the qualifying plant has a superior claim to any moneys deposited under this section, including a trustee in bankruptcy or receiver.
     (2) All moneys paid in excess of the yearly deposits required by this chapter as security for performance of the qualifying plant's decommissioning obligations must be deposited into the account required by subsection (1) of this section. The interest accruing on deposits in the account, minus fees charged to administer the account, must be reinvested in the account. All other provisions of subsection (1) of this section apply to deposits under this subsection.
     (3) Expenditures from the trust account may only be made in accordance with an authorized decommissioning plan.

NEW SECTION.  Sec. 6   (1) The coal plant transition and decommissioning advisory board is created consisting of nine members.
     (2)(a) Five members of the advisory board are voting members who are appointed by the governor. One voting member must be a representative of the owner of the qualifying plant. One voting member must be a representative of the county economic development council where the qualifying plant is located. One voting member must be a representative of the majority of employees at the qualifying plant, chosen by those employees or a bargaining entity established to represent those employees. The remaining two voting board members, who represent the general public, may not have a financial or regulatory interest in remediating toxicity at the facility. The governor shall appoint one of the general public members of the board as the chair.
     (b) In making the appointments to the advisory board, the governor shall seek a board membership that collectively provide the expertise necessary to provide strong fiscal and environmental oversight of the decommissioning plan and that provides extensive knowledge of local government processes and functions and an understanding of issues relevant to the environment and economic development in Washington state. The governor shall appoint the voting members of the board by October 1, 2011. Vacant positions on the board must be filled in the same manner as the original appointments. The governor may only remove members of the board for good cause.
     (3) In addition to the five voting members of the advisory board, the following four government officials shall serve as ex officio nonvoting members of the board: The director of the department of ecology; the mayor of the city in which the qualifying plant is located; a representative of the city council in which the qualifying plant is located; and the chair of the county council in which the qualifying plant is located. The government officials serving in an ex officio capacity may designate a representative of their respective agencies to serve on the board in their behalf. Such a designation must be made in writing and in such a manner as is specified by the board.
     (4) The advisory board has the following powers and duties related to transition and decommissioning of a qualifying plant:
     (a) To review and authorize the decommissioning plan required by this chapter; and
     (b) To set its meeting schedules and convene at scheduled times, or meet at the request of a majority of its members or the chair.
     (5) Decisions of the advisory board must be made by a majority of its total voting membership.
     (6) Members of the board must be reimbursed as provided by RCW 43.03.050 and 43.03.060.

NEW SECTION.  Sec. 7   A new section is added to chapter 70.94 RCW to read as follows:
      (1) This section only applies to power plants within Washington that, in any of the five years preceding the effective date of this section, combusted more than one million tons of coal per year for the purpose of generating electricity.
      (2) Power plants that meet the criteria established by subsection (1) of this section are not deemed to be in compliance with the greenhouse gas emissions performance standard established under RCW 80.80.040(3) and, without regard to the existence of long-term financial commitments, must meet the greenhouse gas emissions performance standard under RCW 80.80.040(1) by December 31, 2015, or if the Bonneville power administration determines that there are technical barriers related to operation and reliability of the electrical transmission grid as a result of meeting the performance standard by December 31, 2015, then by December 31, 2017.
     (3) The state may not require early or additional reductions of greenhouse gas emissions for coal-fired power plants except as may be required for these plants under a federal program.

Sec. 8   RCW 43.160.076 and 2008 c 327 s 8 are each amended to read as follows:
     (1) Except as authorized to the contrary under subsection (2) of this section, from all funds available to the board for financial assistance in a biennium under this chapter, the board shall approve at least seventy-five percent of the first twenty million dollars of funds available and at least fifty percent of any additional funds for financial assistance for projects in rural counties.
     (2) If at any time during the last six months of a biennium the board finds that the actual and anticipated applications for qualified projects in rural counties are clearly insufficient to use up the allocations under subsection (1) of this section, then the board shall estimate the amount of the insufficiency and during the remainder of the biennium may use that amount of the allocation for financial assistance to projects not located in rural counties.
     (3) The board shall solicit qualifying projects to plan, design, and construct public facilities needed to attract new industrial and commercial activities in areas impacted by the closure or potential closure of large coal-fired electric generating facilities, which for purposes of this section means a facility that has combusted more than one million tons per year of coal in each of the calendar years 2006 through 2010. When the board receives timely and eligible project applications from a political subdivision of the state for financial assistance for such projects, the board, from available funds, shall provide a priority for funding projects at the following levels:
     (a) For the 2011-2013 biennium, at least five hundred thousand dollars;
     (b) For the 2013-2015 biennium, at least five hundred thousand dollars;
     (c) For the 2015-2017 biennium, at least one million dollars;
     (d) For the 2017-2019 biennium, at least one million dollars;
     (e) For the 2019-2021 biennium, at least two million dollars; and
     (f) For the 2021-2023 biennium, at least two million dollars.

NEW SECTION.  Sec. 9   A new section is added to chapter 43.155 RCW to read as follows:
     The board shall solicit qualifying projects to plan, design, and construct public works projects needed to attract new industrial and commercial activities in areas impacted by the closure or potential closure of large coal-fired electric generating facilities, which for purposes of this section means a facility that has combusted more than one million tons per year of coal in each of the calendar years 2006 through 2010. When the board receives timely and eligible project applications from a political subdivision of the state for financial assistance for these projects, the board, from available funds, shall provide a priority for funding projects at the following levels:
     (1) For the 2011-2013 biennium, at least five hundred thousand dollars;
     (2) For the 2013-2015 biennium, at least five hundred thousand dollars;
     (3) For the 2015-2017 biennium, at least one million dollars;
     (4) For the 2017-2019 biennium, at least one million dollars;
     (5) For the 2019-2021 biennium, at least two million dollars; and
     (6) For the 2021-2023 biennium, at least two million dollars.

NEW SECTION.  Sec. 10   Sections 1 through 6 of this act constitute a new chapter in Title 80 RCW.