The state’s largest utility explained to lawmakers this week why it wants to expand ownership of the Colstrip power plant. NorthWestern Energy plans to own more than half of Colstrip by 2026.
John Hines, the company’s vice president of supply, told lawmakers that buying more of the coal-fired power plant is a good choice for the company, and its customers.
"Why did we go forward with it? It's pretty simple: reliability and affordability."
Colstrip has not always provided energy when power is in demand. The plant was offline this year during January's cold snap, and in July during a weeks-long heatwave.
Hines says owning more of Colstrip will give the utility greater control of its power supply and reduce the need to buy energy at a premium off the open market.
"It's becoming more and more clear that reliance upon markets, especially markets that are outside of our service territory, is becoming more and more risky," Hines said.
Hines’ addressed the Energy and Telecommunications Interim Committee as part of a presentation on NorthWestern’s ongoing projects.
The Montana Environmental Information Center criticized Hines’ statements on affordability during the committee’s public comment. Policy Director Anne Hedges says NorthWestern’s presentation didn’t include all the costs of acquiring more of Colstrip, including the cost of coal and compliance with federal pollution regulations.
"We are talking about $2 billion in investment for the Colstrip plant to comply with two federal regulations," Hedges said.
NorthWestern Energy is challenging those federal regulations and says acquiring more of the plant for no purchase price is a good deal.
NorthWestern’s decision to expand coal power is unusual, compared to other utilities. Ryan Foelske is a utility analyst for Rocky Mountain Institute, a Colorado-based clean energy think tank.
"We see nationally that coal is going to be retired and increasingly retired. So NorthWestern definitely is different than what the national average is doing," Foelske says.
As NorthWestern plans to own more of Colstrip it’s seeking regulators’ approval to charge customers more. NorthWestern says rates need to go up to cover the costs of generating and delivering power.
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