Montana Public Radio

NorthWestern To Increase Colstrip Unit 4 Stake By 25 Percent For $1

Dec 10, 2019
Originally published on December 12, 2019 10:55 am

Montana’s largest electricity provider on Tuesday announced it plans to buy a larger share of the Colstrip power plant a day after protesters rallied the company to increase its renewable energy portfolio.

NorthWestern Energy announced it plans to buy an additional 25 percent stake in Colstrip Unit 4 for $1, a deal some are calling similar to what Montana lawmakers rejected earlier this year.

But Vice President of Supply and Montana Government Relations John Hines says the contract with Washington-based Puget Sound Energy has some key differences, beginning with the Montana Public Service Commission retaining regulatory oversight and Puget Sound still being on the hook for some cleanup costs for it’s past share of the plant.

"Three, we are stating upfront that there will be zero increase in customers’ rates this first year," Hines said on a press call. "Four, this concept we’re happy to show during regulatory approval that it is the lowest cost means of meeting the capacity concerns."

Hines says the additional 185 megawatts will meet about a quarter of the company’s capacity needs, which he says are severely undermet.

But environmental groups are calling the proposal, announced a day after NorthWestern presented a 20-year energy supply plan to state regulators, a “sweetheart deal” that puts NorthWestern customers on the hook for expensive maintenance and repair costs.

"It spent 20 minutes telling people about its resource plan and it failed to tell everybody the real news of the day, which it was going to do the opposite of what people wanted them to do," said Anne Hedges, deputy director of the non-profit advocacy group Montana Environmental Information Center.

Hedges says NorthWestern hasn’t released an analysis of the cost of buying more into Colstrip or indicated how much it’s paying for coal.

"Hold onto your wallets. This one dollar is the most expensive $1 you'll ever spend," she said.

John Hines with NorthWestern says a cost-benefit analysis wasn’t possible during contract negotiations due to confidentiality agreements. He says state regulators will have a chance to weigh in when the company files an application for pre-approval in January or February.

Also on Tuesday, NorthWestern committed to reducing the carbon intensity of its energy generation in Montana by 90 percent by 2045, compared to 2010.

NorthWestern Energy President and CEO Bob Rowe says it’s an actionable goal the company can hit by ending contracts with generation sources that emit more carbon per megawatt than Colstrip. He expects the Colstrip plant to emit less carbon over time and that NorthWestern will increase renewable power generation.

"I refer to this as a 'no BS' carbon goal,'" he said.

Hedges with MEIC says it’s exactly that.

"That is a complete pile of BS. You don’t buy more coal and still plan on buying more gas, which they say they’re going to do, and at the same time say they understand the need to decrease their carbon pollution," she said.

Hedges says Colstrip is NorthWestern’s biggest net carbon emitter and that the company should look to wind, solar and hydro for a cleaner, cheaper energy source.

NorthWestern says the Colstrip purchase would lower its renewable and carbon-free energy sources from 60 percent to 56 percent.

Other owners of the Colstrip power plant have indicated they plan to pull out as early as 2025. NorthWestern has indicated it foresees maintaining stake in the plant into the 2040s.

The Montana Public Service Commission and Washington Utilities and Transportation Commission are expected to consider the proposal early next year.

Colstrip’s older Units 1 and 2 are scheduled to go close earlier than expected, in the coming months, after their plant operator said they couldn’t make the units economically viable.

 
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