MTPR

Rising Costs Make Closure Of Montana's Largest Coal-Fired Plant 'A Foregone Conclusion'

Oct 29, 2015

Things have changed a lot since January, when it comes to Montana's response to groups in Washington state that could shut down parts or all of the Colstrip coal-fired electricity plant southeast of Billings.

Last year, Washington lawmakers asked for an analysis of, among other things, how much it would cost  to shut down the one and two units of Colstrip's four smokestacks.

When Colstrip Republican State Senator Duane Ankney heard about that in January? Not happy.

"They never even contacted our governor or the legislator or anyone to tell us that they were proposing these bills."

Ankney fired off a bill that eventually didn't pass in Montana's legislature, saying that Montana expects $44 million a year over 20 years to take care of hundreds of people who lose good jobs if half of Colstrip shut down.

Montana State Senator Duane Ankney joined other Montana and Washington policymakers to discuss the future of the Colstrip power plant.
Credit Eric Whitney

"Fine. You wanna play, you’re gonna pay."

Fast forward to Wednesday Senator Ankney had a chance to talk directly to some Washington lawmakers, at a public work session on Colstrip held in Spokane. Also there were reps from the companies that own most, but not all of the Colstrip coal plants, and the separate contractor that actually run the plants.

Ankney says he's been educated about why people in Washington are weighing Colstrip's future, and now has a much different understanding.

"They have a tough issue, it wasn't cut and dried like it appeared to be. They were just going to come in and shut down one and two. They're willing to sit down at the table."

Senator Ankney's change in attitude is significant, says Jim Jensen at the Montana Environmental Information Center.

"I think it was interesting, that by the time this meeting was over today,  that it was clear that it is now a foregone conclusion, among all parties including Senator Ankney that Units one and two are going to be closed. We're now talking about terms and conditions, I guess."

The thing Tuesday's meeting made clear, is that what will ultimately decide the shutdown date at Colstrip one and two is money. Talen is the name of the company that runs actual electricity production at Colstrip and that’s expensive. Gordon Criswell is it environmental compliance director.

"We’re spending in excess of $50 million a year on capital projects, to maintain equipment, and to keep it where it can keep reliability of around 80 percent."

The company spending most of the $50 million a year is Puget Sound Energy, or PSE, based in Bellingham. PSE, in turn, is owned by big pension funds in British Columbia and elsewhere. They have a real interest in how much it costs to produce electricity, because if they can get it cheaper elsewhere, that's the best business decision.

And there are other forces that could drive up the cost of cranking out the megawatts at Colstrip.

One, there's President Obama's strategy for reducing carbon dioxide emissions. Montana is being asked to cut 47 percent of its CO2 by 2030, the highest percentage of any state.

"Second: Carbon Washington. This is the environmental group pushing to enact a carbon tax by citizen initiative."

That's Steve Secrist, a vice president at PSE, which owns 50 percent of Colstrip one and two.

"Third, the Alliance for Jobs and Clean Energy, This is another environmental coalition form to advance a carbon citizen's initiative of along the lines of a cap and trade system that would put a price tag on carbon."

Fourth, Washington Governor Jay Inslee is also talking about a cap on carbon emissions that could make it more expensive to produce electricity at Colstrip.

Given all that, how far into the future does Senator Ankney think Colstrip units one and two will run?

"The coal miner side in me says run those sons of a guns until 2070. The reasonable side of me says 2025-2030."

The fate of Washington’s environmental ballot initiative is still unknown. That's also true of president Obama's plan to reduce CO2, but Washington’s state legislature meets in January and it stands to make decision on a target stop date for Colstrip units one and two.