MTPR

CHS Refinery Depends On Colstrip For Electricity, Manager Says

Mar 21, 2016

Senator Steve Daines is spending the next two weeks highlighting the energy needs of Montana businesses, and advocating for policies that protect the state’s fossil fuel industries, including coal interests that are facing significant challenges. Daines kicked off what he’s calling his Montana Energy tour today with a stop at the CHS refinery in Laurel.

CHS Refinery Manager Pat Kimmet puts into perspective how important electricity is to the Laurel facility.

"$18 million for power and $15 million for wages and benefits."

"And the fact that their power bill here in Laurel, Montana for this operation is greater than their payroll, it shows just how important it is to have reliable, affordable energy to keep these jobs in Montana," Daines said.

Daines says the salary – that averages $120,000 a year – is three to four times more than the state average.

"So these are good, high paying jobs. We want to keep these here in Montana. And an affordable, reliable energy supply is part of that equation."

Currently about 60 percent, or about 40 megawatts of that power, comes from the coal-fired plants at Colstrip.

Refinery Manager, Pat Kimmet, says their expansion plans will increase that consumption up to 56 megawatts.

He says the refinery supports all sources of power generation, but he worries what will happen if another coal-fired power plant goes down with no other reliable power generation immediately available to take its place. Kimmet says right now the refinery is planning on bringing in a third line because of its on-going capital investments.

One source of electricity CHS had relied on is gone: the recently de-commissioned coal-fired Corette power plant just to the east in Billings.

"We have some concerns regarding the reliability and stability of the power to our facility because it was a very close generator. It was located close to our facility which adds to the stability," Kimmet said.

And it did have an impact?

"We believe it did. Our electrical experts tell me it has impacted some of our power problems that we’ve had recently."

He says power blips have the potential to shut down the refinery, in particular the pollution control equipment. And he says if it happens in the winter, the potential of frozen pipes could bring his operations down for days.

Kimmet says if the federal Clean Power Plan leads to the closure of the Colstrip generating units it would force CHS to pay more for its electricity. He says those costs to produce gasoline and diesel would be passed on to consumers.

Daines says that is why he’s looking at the various aspects of Montana’s energy sector.

"I never thought I’d live to see the day here in Montana where we’re having this discussion. And I think it’s very very unfortunate as a threat here to our livelihood in Montana. It’s a threat frankly to keeping our jobs here in Montana. That’s why we got to fight back and make sure Montanans understand what this could mean for our future and our livelihoods in our state."

Besides a trip to Colstrip, Daines will visit a wind farm near Baker and hear about education programs at both Miles and Dawson Community Colleges that cater to the energy sector.

The Republican is co-sponsoring an Energy Summit next week in Billings with the Montana Chamber of Commerce.