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Sierra Club Applauds State Senate for Repeal of Coal Plant Subsidy and Is Troubled With Statement From Governor’s Office

March 24, 2010

Tax exemption helps multi-billion dollar TransAlta, not workers.

Washington legislators are in their final days of hashing out responses to the state’s multi-billion dollar budget shortfall.  Still in play is the $5 million-a-year sales tax exemption for TransAlta, the multi-billion-dollar Canadian corporation that owns the coal-fired power plant in Centralia.  Today, the Governor’s office confirmed her opposition to the Senate proposal to remove this tax exemption.

The Sierra Club, Coal-Free Washington Campaign Director Doug Howell responded to the Governor’s comments. "TransAlta’s coal plant is Washington’s single largest stationary source of pollution, including carbon dioxide, toxic mercury and haze. A better use of that public money is investing in a clean energy future. The Sierra Club supports redirecting these funds to investments in clean energy workforce development.

Senate Majority Leader Lisa Brown and State Sen. Eric Oemig have included repeal of TransAlta’s exemption in their consolidated package of bills closing corporate tax loopholes. Howell applauded Brown and Oemig for their leadership.  "We are thankful for this Senate leadership.  As Washington faces the biggest financial crisis in state’s history, it is unconscionable to think that our state’s most harmful polluter should continue receiving tax breaks."

The tax break was instituted in 1997 to help the coal plant’s previous owners keep the adjacent coal mine open.  In 2006, TransAlta laid closed the coal mine laying off 600 workers. Now, the $5 million subsidy no longer meets its original purpose of protecting jobs. 

"The provision was intended to keep coal mining jobs which no longer exist," Howell said. "It is ironic that this tax giveaway is being defended today on the grounds that it will protect jobs. This tax giveaway does nothing to protect workers -- it is just lining the pockets of our state’s worst corporate polluter."

Howell, citing TransAlta’s recent $1.6 billion cash purchase of Ontario Hydro, noted that TransAlta is not hurting for money.

"The Sierra Club is working to protect Washington’s public health and the environment," Howell said. "Available clean alternatives to dirty and dangerous coal power will create sustainable new jobs.  We should invest in the new green economy instead of letting the state’s worst polluter get out of having to pay its fair share." 

Last year, a Senate bill proposed re-directing part of the money from the tax subsidy to displaced workers. The Sierra Club supports using this funding for a clean energy transformation that can prepare the workers in the community for sustainable careers in clean energy.

"The elimination of TransAlta’s unfair tax break is an important step toward a cleaner future in Washington," Howell said.  "We are very pleased to see that ending this loophole is a priority for the Senate."

David Graham-Caso, (213) 387-6528 x214, david.grahamcaso@sierraclub.org
Ethan Bergerson, (206) 552-0675, ethan.bergerson@sierraclub.org


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For more information, visit www.coalfreewashington.org.