By Amanda Eggert, Montana Free Press
A bill that seeks to keep coal-fired energy generation in play by significantly revising the Public Service Commission’s role in regulating utilities has raised red flags for both the PSC and environmental groups.
As written, Senate Bill 379 would allow current and future owners of coal-fired power assets to fully recover costs for any undepreciated value and remediation expenses from energy consumers. It would also allow the utility to recover market value for new ownership of a coal power asset, even if it was purchased for less than market value, a scenario that brings to mind a now-defunct proposal for NorthWestern to purchase 25% ownership of Unit 4 for from Washington-based Puget Sound Energy for $1. Additionally, SB 379 would direct the PSC to allow the continued operation of coal-fired power plants “until the commission issues an order finding that the closure of the units is in the public interest.”
The PSC staff’s analysis of the bill found that if Unit 4 of Colstrip were to shut down in 2027 as has been forecasted, NorthWestern would be permitted to recover $267 million in undepreciated value and remediation costs from its customers. Based on current customer counts, that would leave each NorthWestern ratepayer on the hook for $721 in stranded costs.
“It dismantles the traditional balance between risk and reward,” PSC policy analyst Robin Arnold told commissioners during a March 23 meeting. “This shifts all of the risk to the utility’s customers, while guaranteeing that the utility’s stakeholders will receive reward.”
