Senate endorses bill to allow coal power purchase
HELENA, Mont. (AP) — The state Senate on Wednesday endorsed a bill to allow NorthWestern Energy to buy an additional portion of a coal-fired power plant in eastern Montana for $1 without the approval of state utility regulators.
The bill, which was endorsed by the Senate 32-18, faces a final vote before moving to the House.
The measure would allow Northwestern Energy to purchase the ability to generate another 150 megawatts of energy at a plant in Colstrip. Along with the 220 megawatts it already owns, NorthWestern would own half of the plant’s generating capacity, making it more likely the plant will remain operational, supporters said.
The bill takes advantage of philosophies of some West Coast utilities, governments and utility regulators that don’t want to use coal generation anymore and presents an opportunity for Montana to purchase additional, reliable power for a bargain price, said Republican Sen. Tom Richmond, a co-sponsor.
Putting the purchase in legislation, rather than before the Public Service Commission, avoids potential litigation by environmental groups that could drag out PSC approval for years, said Republican Sen. Duane Ankney, another co-sponsor.
Colstrip’s two older units are scheduled to shut down by mid-2022 under a legal settlement. The bill seeks to extend the life of the plant’s two newer units, Units 3 and 4, as other Colstrip co-owners in Washington and Oregon look at reducing their use of coal energy.
“It keeps 350 power plant workers working, it keeps about the same number of miners working,” at jobs that pay about $85,000 a year, and keeps them paying income taxes, Ankney added.
If the plant closed now, NorthWestern Energy customers would still be liable for about $300 million of the $407 million the company paid for its 30 percent share of Colstrip Unit 4 in 2009, supporters said.
NorthWestern spokesman David Hoffman said buying a share of the Colstrip plant is the lowest-cost way to provide more base power to supplement solar and wind energy when they are not available.
The bill also allows NorthWestern to buy an additional capacity on a critical 500 kilovolt power line, not to exceed book value, and to spend up to $75 million on safety, reliability or environmental compliance over the next 10 years and pass those costs onto customers.
After 10 years, or after NorthWestern spends $75 million on capital costs, the additional generation capacity would be regulated by the PSC.
Opponents say the PSC should have to approve of the purchase.
An initial bill that opponents said would have given NorthWestern Energy an incentive to close the Colstrip plant before its costs were recovered from ratepayers would have allowed the company to continue charging customers for the remaining cost while they got no benefit from the plant. The initial bill was opposed by Public Service Commission staff and the Montana Consumer Counsel, but three of the five members of the PSC signaled they supported the bill. One did not vote.
Amendments removing possible incentives for early closure were made during executive action in committee and on the Senate floor so opponents did not have a chance to comment on the changes.
Opponents also argued the value of the possible 150 megawatt purchase should be analyzed.
“If $1 is really such a good deal, why won’t NorthWestern show its cards? Why not make the case to regulators?” Jason Brown, an attorney with the Montana Consumer Counsel, asked the Senate Energy and Telecommunications Committee last week.
Other opponents questioned why the bill was moving so late in the session and likened it to a 1997 deregulation bill that ended up costing ratepayers hundreds of millions of dollars to repurchase 11 hydroelectric dams in 2014. Those costs are included in customers’ power rates.