TransAlta to phase out coal boilers in Wash. state

SAN FRANCISCO, March 5 Sat Mar 5, 2011 6:55pm EST

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SAN FRANCISCO, March 5 (Reuters) - A bill to close two coal boilers at a TransAlta Corp (TAC.N) (TA.TO) power plant in Centralia, Washington, and phase out coal-fired power in the state will go to lawmakers under a deal on Saturday between the company and the state's governor.

One coal boiler will be shut no later than the end of December 2020 and the other by the end of December 2025 under terms of the agreement, which allows TransAlta to sell long-term contracts for coal-fired power to help finance a transition to gas-fueled energy, a statement from Governor Christine Gregoire's office said.

The agreement requires TransAlta to install additional air pollution control technology to further reduce emissions of nitrogen oxides at its plant in the Centralia area.

The Calgary, Alberta-headquartered energy provider will also provide $30 million to a community investment fund for energy efficiency projects and $25 million for an energy technology transition fund to support innovative energy technologies and companies in Washington state.

"This compromise promises cleaner air for our future, while providing the necessary time to ensure economic stability, job protection and enough power on the grid to keep our homes and businesses running," Gregoire said in the statement.

The agreement will be incorporated into a proposed bill.

A spokesman for the Sierra Club environmental group predicted lawmakers would approve the bill, adding, "We were pushing for a faster retirement but this agreement allows for a smooth transition in the community and time to reconfigure the electrical grid to integrate the region's abundant wind and solar resources instead of rushing to gas."

The legislation "meets our commitment to a low-carbon future through transition from coal to gas in Washington, significantly reduces our environmental risk and allows us to provide fair shareholder value through favorable long-term contracts while protecting jobs and the economy of the local community," TransAlta Chief Executive Stephen Snyder said in the statement. (Reporting by Jim Christie; Editing by Peter Cooney)

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