Colstrip Electricity is not Cheap or Reliable – PSC Decision Protects Montana Consumers

by Anne Hedges

If you buy electricity from NorthWestern Energy you’ve been paying extra to subsidize an unreliable and expensive coal plant. Politicians on both sides of the aisle try to tell us otherwise, but the truth is that Colstrip provides expensive, unreliable power. NorthWestern was hoping no one would notice that fact when it tried to pass on over $8 million in costs to customers for a recent breakdown of the Colstrip plant. Fortunately, the Montana Public Service Commission (PSC) prevented NorthWestern from overcharging its customers in this unjustifiable manner.

The Colstrip coal-fired power plant.

On Tuesday, March 29th, the PSC voted to protect NorthWestern’s customers when it sided with MEIC, Sierra Club, and Earthjustice, as well as the Montana Consumer Counsel. By a 3-2 vote the PSC ruled that NorthWestern couldn’t pass on its customers over $8 million in costs when Colstrip Unit 4 broke down for 6 months in 2013. NorthWestern tried to hide the cause of the breakdown from the PSC. When Earthjustice intervened on behalf of MEIC and Sierra Club, it insisted NorthWestern come clean and provide its internal analysis of why the plant broke down. Months later, NorthWestern finally coughed up the report and it became clear that NorthWestern just wanted to quietly charge its customers instead of dealing with the hassle of trying to force those parties responsible for the breakdown to pay those costs.

PSC commissioners Roger Koopman, Travis Kavulla, and Brad Johnson saw through this ruse and put the costs squarely where they deserved to be, on NorthWestern Energy’s shoulders, not on its customers. Commissioners Bob Lake and Kirk Bushman voted to increase customers’ rates instead of forcing NorthWestern to behave responsibly.

When NorthWestern bought a 30% share of Colstrip unit 4 in 2009 it promised the plant would be cheap and reliable. Time has proven it to be anything but. Unit 4 has broken down TWICE for 6 months each time since NorthWestern bought in. It’s not reliable.

It’s not cheap either. Each year the PSC analyzes how much NorthWestern pays for electricity from different sources. That unbiased report consistently concludes that NorthWestern pays more for Colstrip electricity than nearly any other electricity source. In fact, it pays about twice as much for Colstrip power as it does for wind power from Judith Gap. Some argue that the calculated price should include the cost to “firm up” that power when the wind doesn’t blow. Prior to 2012 the PSC did include the firming cost for wind in its analysis and not surprisingly, Colstrip was still twice as expensive as firmed power from the Judith Gap wind farm. There is simply no way around it: Colstrip’s electricity is expensive.

Toxic coal sludge ponds at Colstrip.

To add insult to injury, Montanans pay some of the highest electricity rates in the region. Why should we pay more for expensive and unreliable power from Colstrip? Instead we should look toward a future that considers the whole range of real costs associated with coal generated electricity. That analysis should include the actual price customers pay, as well as the costs of the air pollution and the extensive water pollution from the 800 acres of leaking ash ponds at the plant. And we must consider the costs that climate change is imposing on Montana’s environment and economy. Climate change isn’t free.

Montanans shouldn’t write a blank check to NorthWestern to operate an unreliable and expensive coal plant. Kudos to those three commissioners who are looking out for Montanans who buy electricity from a regulated monopoly. It’s nice to see some regulators taking their jobs seriously.