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Conflict Intensifies Between Colstrip, Montana's Energy Future

Renewables surpassed coal in energy production in the United States for the first time in April. (David Gilder/Adobe Stock)
Renewables surpassed coal in energy production in the United States for the first time in April. (David Gilder/Adobe Stock)
May 13, 2019

HELENA, Mont. – The struggle is ramping up over the Colstrip coal-fired power plant and Montana's energy future.

A headline-grabbing measure in the Legislature, nicknamed the Save Colstrip bill, would have allowed the utility NorthWestern Energy to buy a unit of the coal plant without regulatory oversight and pass the costs on to customers.

That bill failed, but House Bill 467 passed. It allows interest rates of 2% to 3% to pay off Colstrip after the plant stops producing energy.

Customers are currently paying more than 8% interest as they pay down the $407 million plant until 2042.

Anne Hedges, deputy director of the Montana Environmental Information Center, says HB 467 could save Montanans $100 million.

"Do customers get stuck with a bill that they shouldn't, or do customers have some type of relief?” she raises. “And this bill is all about providing customers with relief."

Hedges says the lowered interest rate is comparable to refinancing a house and will save money when the plant is no longer operational – likely more than a decade before it is fully paid off.

Gov. Steve Bullock signed HB 467 last week.

NorthWestern Energy CEO Bob Rowe says Colstrip has been a year-round, reliable source of energy. He maintains the Save Colstrip bill was needed to provide financial certainty for the plant.

The Montana Environmental Information Center and Sierra Club counter there could be a faster way to bring down energy costs. They and other groups questioned NorthWestern's $400 million investment in Colstrip a decade ago, since the utility bought that stake for roughly $190 million.

Now, NorthWestern is in the middle of a rate case.

Mike Scott, a senior representative with Sierra Club's Beyond Coal campaign in Montana, says the regulatory commission overseeing the process should consider Colstrip's current value.

"We think it's appropriate that if they want to use this model of how to establish rates that they should take a look at what the value of the plant is now, not what it was 10 years ago,” he states. “And we think that's going to be a dramatic difference, and probably a good cost-savings for Montana ratepayers."

Hedges adds while NorthWestern is passing on costs for an unsustainable coal plant, it also is trying to hike rates for rooftop solar.

With renewables surpassing coal for energy production in the U.S. for the first time in April, Hedges describes Montana as in a struggle for its energy future.

"It is very much about the future of our energy system, because if NorthWestern gets overcompensated for coal and manages to functionally eliminate net-metering, you know where the state's going,” she stresses. “It's going in the opposite direction of every other utility and state in this nation."

Disclosure: Sierra Club, Montana contributes to our fund for reporting. If you would like to help support news in the public interest, click here.
Eric Tegethoff, Public News Service - MT