When Centralia’s coal mine closed in 2006, it was clear that the town’s coal-fired power plant would soon follow. Realizing that the power plant’s closure would devastate the local economy, then-Washington Governor Christine Gregoire and the Washington State Legislature negotiated with power plant operator TransAlta to provide $55 million for transition programs to aid coal plant workers and the broader Centralia community.
And the investment is working.
So far, the locally representative Centralia Coal Transition Fund Board has disbursed over $17 million in grants to promote economic development, fund weatherization projects, and build clean energy infrastructure. Despite no major new employer coming to the region to offset coal job losses, job growth in Centralia exceeded the national average from 2016 to 2019, demonstrating just how impactful transition programs can be.
Building a Transition Coalition
Centralia’s transition away from coal started in earnest in 2006 when TransAlta company officials suddenly announced they would be closing their coal mine. Six hundred workers lost their jobs. Federal law required that these workers receive 60 days of pay and benefits, but other than that, they were on their own.
Meanwhile, Centralia’s coal-fired power plant continued to operate, fueled by Wyoming and Montana coal. But still, by the depths of the Great Recession in 2009, unemployment in Centralia had risen to over 12 percent. In May of that year, Gov. Gregoire signed an Executive Order directing the Washington State Department of Ecology to work with TransAlta to develop a greenhouse gas reduction plan to bring the coal plant into compliance with new performance standards by 2025.
Find this article interesting? Support more research like this with a gift!
In December 2011, after two-and-a-half years of negotiations, TransAlta and the State of Washington agreed to a transition plan. Under the agreement, TransAlta would permanently cease power generation from one boiler in 2020 and the remaining boiler in 2025. TransAlta would also pay $55 million over 10 years to fund transition activities to ameliorate Centralia’s economic hardship. In return, TransAlta gained certainty for its stakeholders through access to long-term electricity contracts for the remainder of the coal plant’s life.
The agreement created the Centralia Coal Fund Transition Board, comprising TransAlta employees, local government representatives, economic development groups, and community and environmental groups. Together, since 2016, the Board’s members have disbursed 42 grants totaling over $17 million to promote economic development, fund weatherization projects, and build clean energy infrastructure. The Board also allocated $8 million to provide each displaced worker with a one-time lump-sum payment of about $45,000.
A Model for Refinery Communities
So far, the economic metrics paint Centralia as a success: job growth in the town of about 17,000 exceeded the national average from 2016 to 2019. And because grant funding is focused on labor-intensive fields like education and energy efficiency, which create 2–3 times more jobs per dollar invested as the mining and utility sectors, the growth comes from the bottom up.
Centralia’s transition is ongoing, but it is clear that the transition funds from TransAlta are having a positive impact in the community. Will it be enough to help Centralians write their next chapter? Only time will tell. In any case, the oil-refining communities of Anacortes, Ferndale, and Tacoma, anticipating their own future economic transitions, could do well to use Centralia as a model.
Thanks to Anna Campbell, who contributed research for this article.
Thanks for this well-organized research, Anna and Zane! Posting David Stockman’s recent missive on the larger topic, which included prominent mention of the “Centralia Method” as well. It’s a good generous solution to highlight. Perhaps future transition plans can be more focused on developing renewable energy/conservation. Centralia & Lewis County’s economy is going gangbusters, by the way!