House Committee Hears Controversial 'Save Colstrip' Bill
The controversial proposal for Montana to give NorthWestern Energy incentive to buy a bigger share of the coal-fired power plant in Colstrip got its first hearing in the state House Monday.
Senate Bill 331 is seen by some as a deregulation bill to benefit of the state’s largest monopoly utility company. Others see it as a proposal to save Colstrip while providing reliable power that will keep Montanans' heaters running even in the coldest of cold snaps.
David Hoffman with NorthWestern Energy says, "Senate Bill 331 is a bill of possibilities."
Since the bill was introduced, critics have raised questions about why it’s necessary for the Legislature to encourage NorthWestern to buy more of a share of Colstrip, when it could already make that purchase if the company considered it a good value.
The legislation would free NorthWestern from regulatory oversight in the purchase of up to 150 additional megawatts at unit 4 of the power plant. Some believe the utility could get that additional capacity for the price of $1 from companies withdrawing their ownership stake or stakes.
The bill also allows NorthWestern to pass on $75 million worth of associated ownership costs to its customers, without regulatory oversight by the Montana Public Service Commission.
NorthWestern’s Hoffman hinted during the bill’s hearing Monday at a potential deal in the works between NorthWestern and one of Colstrips other owners. He said the possibility of that deal is why the bypassing of the PSC in this situation is needed.
"The fact that these discussions have taken place very recently, and if they come to fruition, I think there is a need for speed. And to go to the commission for the pre-approval process would take, I would estimate, years, with ligation."
Montana’s Public Service Commission is divided on the bill, three in support, two in opposition.
Roger Koopman, a Republican from Bozeman, is among those opposed to it.
"If you believe that corporate welfare, consumer subsidies of monopolies, if those things are the way to encourage and promote free enterprise and to help people in Colstrip, then this is obviously a bill you would like," Koopman says.
PSC Vice-Chair Bob Lake, a Republican from Hamilton, says there is some risk in the bill. However, Lake believes that the benefit of gaining additional cheap power that NorthWestern could turn on at a moment’s notice to send electricity to its customers outweighs the risks.
"The commission views the premature closure of a large portion of Colstrip as a greater risk to consumers than the acquisition of another 150 megawatt share of Colstrip under the terms of the bill," he said.
Critics say the bill does nothing to extend the future of Colstrip, and could even lead to an early closure at the plant.
The bill, carried by Sen. Tom Richmond, a Republican from Billings, passed out of the Senate in late March, on a 27-22 vote.
The House energy committee is expected to vote on the bill later this week.
NorthWestern Energy is a financial contributor to Montana Public Radio.