By Anne Hedges, MEIC Deputy Director
It’s time for NorthWestern Energy to enter the 21st century. It has tried and failed three times in its quest to purchase a larger share of the aging Colstrip Unit 4 – a large super-polluting coal-fired power plant. The most recent attempt failed last week when NorthWestern’s proposal to purchase a larger share of Colstrip Unit 4 fell apart.[1] This dismal record dooms NorthWestern’s prospects of owning a larger share of the plant. But more importantly, it seals the fate of the Colstrip plant, which can only operate up until the end of 2025, but will likely close even earlier. It is time for NorthWestern, and anyone else wanting to throw the plant a hail Mary pass, to shift their efforts towards a strategy for what comes next for Montana, the Colstrip area, and the workers when the plant closes. This week alone NorthWestern blamed the staff of the Washington state utility commission, the Washington state legislature, and the Montana Public Service Commission for its failed efforts — but NorthWestern has no one but itself to blame. It is time for the executives to stop passing the blame and start charting a more sustainable, financially prudent, and humane path for its electricity production.
NorthWestern Does Not Want to Stop the Charade that Colstrip Can Operate for Decades Longer
NorthWestern is intent on continuing to bilk its Montana customers. It keeps trying to buy a larger share of an old and unaffordable plant because it will continue to make an obscene, guaranteed profit. In 2008 the Montana Public Service Commission allowed NorthWestern to charge its electricity customers $407 million for a small ownership share of the plant.[2] Just a year earlier, in 2007, NorthWestern purchased that 30% share of Colstrip Unit 4 (220 megawatts) from PPL Montana for $187 million.[3] In other words, the PSC approved NorthWestern’s proposal to charge its customers $220 million more than NorthWestern paid just a year earlier, all at an 8.25% interest rate until 2042. It was a sweet deal for NorthWestern’s shareholders and the company is doing everything possible to keep the gravy train on the rails, even if it’s a financial nightmare for its customers and an environmental disaster for Montana and the world.
NorthWestern Should Follow the Lead of the Other Colstrip Owners and Clean Up Its Act
All of the other owners of Colstrip Unit 4 are looking for a way to get out of the Colstrip Plant, and most are looking to replace their Colstrip power with clean, renewable energy from Montana. Recently, the Idaho Public Service Commission told a plant co-owner, Avista, that it does not want Idaho ratepayers stuck with the plant after the Washington owners are required to exit in 2025. A recent order from the Idaho Commission said,
“Avista acknowledged that modeling done in response to Staff production requests suggested an economic exit from Colstrip earlier than the end of 2025.”[4]
The latest failure to sell an interest in the plant means that the other two Washington-based owners will not want to waste their time and money trying to sell their shares to NorthWestern. They are all legally mandated to exit the plant by Dec. 31, 2025. There is already plenty of evidence that these owners don’t want to sink any more money into the plant[5] and it is extremely unlikely their shareholders would be willing to bear the cost and risk of keeping the plant operating beyond 2025. That makes a 2025 closure date unavoidable.
The good news is that all of these same co-owners also own a portion of the transmission system, which can move power from Montana to their customers. This makes Montana a logical place for them to turn for clean power. Montana has outstanding clean energy potential, especially wind. Avista and the Idaho utility commission expressed their strong interest in replacing coal-fired electricity with pumped hydro and wind energy from Montana. Puget Sound Energy is also considering purchasing Montana wind. Finally, Portland General Electric recently told the Oregon utility commission that it could replace Colstrip power with Montana wind and use its existing transmission ownership to affordably achieve its goals:
“This could be achieved through one or more actions and should contemplate leveraging the existing transmission rights from Colstrip to PGE’s system to access high capacity renewables such as Montana wind for PGE customers. Montana wind represents a renewable resource that contributes more capacity to PGE’s system (37% ELCC) than Gorge wind projects (24% ELCC) or a solar and storage project (20% ELCC) providing a unique opportunity to meaningfully address PGE’s capacity need at the same time as acquiring low cost carbon free energy.”
This is great news for renewable energy development in Montana! NorthWestern should make the same commitments to a cleaner future.
NorthWestern Should Plan for and Fund Worker Transition – Especially for the Tribes
Three times MEIC has proposed NorthWestern create a fund to help with workforce transition and three times those efforts have failed. Two other Colstrip owners, Puget Sound Energy and Avista, have already paid $13 million for workforce transition, yet NorthWestern has refused to pony up a single penny. Northern Cheyenne and Crow Tribal members have worked at the plant and the mine for decades, a fact often touted by coal advocates. Yet no owner has provided funding for these nearby Tribes who will be disproportionately impacted by plant closure. NorthWestern needs to join Puget Sound Energy and Avista in promising transition money, and it needs to ensure that some of it flows to viable transition programs for Tribal workers.
NorthWestern Must Publicly Acknowledge that Carbon Capture Won’t Save Colstrip
There is only one viable, proven, and economic way to eliminate the enormous greenhouse gas emissions at the Colstrip plant. NorthWestern can shut the plant down. Sadly, though, politicians love to tout carbon capture and storage (CCS) as a viable long-term strategy for Colstrip, because it allows them to avoid the hard realities of a plant shutdown and its political implications, while still appearing to care about our climate. However, recent evidence uncovered by MEIC through litigation should permanently extinguish this deceiving charade.
The U.S. Department of Energy has been hiding a document that estimates that it would cost $1.3 billion to capture just 60% of Colstrip’s carbon dioxide emissions, along with more than $100 million annually in operating costs. Since money doesn’t grow on trees, and we have far cheaper, more effective options, this fairy tale is nothing more than a cynical political promise intended to distract voters and kick the can down the road. Sadly, it’s a promise that no one can keep, as NorthWestern’s customers can’t afford CCS and the planet can’t afford the millions of tons of carbon emissions that billow from the Colstrip plant each year.
The plant is at the end of its useful life, environmentally and economically. It’s unfair of NorthWestern and its political supporters to pretend otherwise.
It’s long past time for NorthWestern to create a plan for a just, equitable, and affordable transition to clean energy.
[1] SB 278 and SB 331 in the 2019 legislature and Puget Sound Energy announcement on October 29, 2020 that it pulled the plug on a sale of its share of Colstrip Unit 4 to NorthWestern.
[2] Montana PSC Docket No. D2008.6.69
[3] Montana PSC Docket No. D2008.6.69, Direct Testimony of John W. Wilson on Behalf of The Montana Consumer Counsel, August 8, 2008.
[4] Idaho Public Utilities Commission, Order No. 34814, October 15, 2020.
[5] Montana PSC Docket No.2018.09.058, NWE data response to MEIC_036.
