MTPR

Colstrip Closure Will Bring Big Economic Impacts, Study Says

Jun 25, 2018

A new study funded in part by the coal industry says shutting down of Colstrip’s two newer, larger coal-fired electricity generators in the next decade could have a huge impact statewide.

Colstrip’s two older units, 1 and 2, will shut down no later than July 2022 because of a Clean Air Act lawsuit settlement. But the future of the newer units, 3 and 4, remains uncertain.

“Our ultimate preference is for this plant to continue — units 3 and 4 — as long as possible,” says Webb Brown, President of the Montana Chamber, which commissioned the study by the University of Montana UM’s Bureau of Business and Economic Research.

The study found that if Colstrip Units 3 and 4 shut down in 2027 it would mean that by 2043 there would be 3,300 fewer jobs in the state, a loss of more than $5 billion in household income, and a decline of state economic output of over $12.5 billion.

Patrick Barkey, the Director of BBER, says there are no hard plans for changes to the power plant in 2027, and the analysis answers a hypothetical question of what would happen if those units shut down.

“An economy with 3 and 4 continuing to operate is a larger economy,” Barkey says.

The BBER study does assume that the electrical transmission line from Colstrip remains open and the construction of a natural gas plant to pick up some of the energy demand.

But Anne Hedges with the Montana Environmental Information Center questions the value of an industry-funded study.

“We’ve faced these types of market shifts before," Hedges says. "And if you analyzed the impacts of losing the typewriter industry years ago, and you didn’t consider that they’d be replaced with computers, you would have seen a big economic decline. That’s exactly what this study does.”

Hedges says coal is fading because there are cheaper and more efficient ways to produce energy and renewable energy sources are out competing coal for price.

MEIC was among the organizations that settled a lawsuit under the Clean Air Act that resulted in the 2022 shutdown date of Colstrip units 1 and 2.

The BBER’s Patrick Barkey says it stands by its results, and is transparent about the sponsorship of their work.

CORRECTION: The original text of this story indicated the BBER study covered years 2027-2047. That was incorrect. The impact study projects out to year 2043.