Why Is Montana Driving Away Clean Energy Investments?

by Anne Hedges

It’s that time of the legislative session when mischief occurs – and perhaps no bill has been subject to more mischief than SB 338. There’s a reason that the leading renewable energy advocates in Montana and the region are strongly opposed to the bill (Renewable Northwest, Northwest Energy Coalition, Sierra Club, and MEIC), as are the Montana Chamber of Commerce, Montana Taxpayers Association, and the owners of Colstrip. Politics makes strange bedfellows.

Judith Gap Wind Farm.

MEIC believes the most important legislative priority is always to be true to our mission despite politically powerful opponents and the distortions, mistruths, and threats they spread. MEIC strives to decrease carbon dioxide pollution, increase renewable energy development, ensure clean-up of the ground and surface water contamination at places such as Colstrip, help workers and communities transition to a clean energy future, and continue to put electricity on the existing transmission line that starts in Colstrip and ends in west coast states. These states want less coal power and more clean energy. SB 338 is counter to each and every one of these principles.

What would SB 338 do? It would impose nationally unprecedented exit fees on the Colstrip owners for making the legitimate business decision to close Colstrip units 1 & 2 . It would force the owners to pay for residential and commercial real estate, all outstanding bonds held by any government entity in the area, all lost tax revenue to the state and local governments (the Colstrip owners have paid 80-90% of the property taxes in Colstrip for decades), the taxes and workers’ wages of any company anywhere in the state that claims to be impacted by the closure of units 1 & 2, and much, much more. None of these costs would go to economic diversification or development, as has been successfully done at other coal plants facing closure.

Instead of encouraging investments in Montana’s wind resources that could provide new, stable replacement jobs and tax revenue for Colstrip and the state, SB 338 writes off the future of Colstrip and Montana’s wind industry for the dream of some short-term cash. Utilities or businesses interested in developing clean energy resources will look to other, friendlier, less punitive states such as Wyoming or their own states instead of looking to Montana’s world class wind resource. In other words, SB 338 will discourage businesses from locating in Colstrip (or elsewhere in Montana), diminishing the opportunity for long-term stability in the community (or new jobs being created elsewhere).

Montana is full of ghost towns that failed to diversify. It’s also full of towns that embraced diversification and saw the benefits. SB 338 severely penalizes the owners of Colstrip for moving beyond coal, yet it ignores the fact that those are the same utilities that need to replace coal power with clean energy – energy that Montana has in abundance. Some of the Colstrip owners want to build new gas plants in their own states — a very bad idea for those concerned about carbon pollution. Activists in west coast states are fighting those proposals and advocating for Montana’s wind resources. This bill fundamentally undermines their efforts.

What are the likely consequences of SB 338:

  • Colstrip’s owners will sue the state of Montana for this crazy idea. They won’t pay these costs – ever.
  • Colstrip’s investor-owned utilities will avoid doing business in Montana and instead build new gas plants in Washington and Oregon. Montana will lose the market for wind development and we’ll all get more carbon pollution.
  • Talen Montana, with the second largest ownership share in Colstrip, will declare bankruptcy to avoid the cost and hassle of this bill. Such a move would fundamentally jeopardize cleanup of water contamination at Colstrip. Montana DEQ has imposed no bonds on Talen to ensure long term cleanup of the extensive contamination from the leaking coal ash ponds. Cleanup will cost hundreds of millions of dollars, but a Talen bankruptcy will make reclamation and remediation more complicated, contentious, and more uncertain – just as it has in every other instance of a company going bankrupt before they cleaned up their mess.
  • Future investors will avoid doing business in a financially risky and contaminated place such as Colstrip. Workers will need to move to find replacement jobs. Montana and the local government will forego opportunities for economic development and a replacement tax base. The town of Colstrip will eventually be relegated to just another ghost town that played a role in Montana’s history.

But much of that could be avoided. The transmission line in Colstrip is the town’s golden ticket. It could and should take the areas’ high quality wind energy to west coast markets. Unfortunately, SB 338 sends the exact wrong message to companies shopping for clean energy resources.

MEIC and our renewable energy allies oppose this bill because it is the right thing to do, regardless of whether or not it’s politically popular.

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