Eastern Montana coal plant set to close

Posted at 3:06 PM, Feb 20, 2019
and last updated 2019-02-20 17:06:26-05

BISMARCK, ND – Montana-Dakota Utilities will shut down its Sidney coal-fired power plant by the end of next year, and the end could come sooner, depending on an upcoming ruling in Westmoreland Coal bankruptcy case.

MDU officials announced Tuesday they’re planning to shutter the Lewis & Clark Station in Sidney and two other units at its Heskett in Mandan, N.D., by the end of 2021, citing rising costs and increasing competition from natural gas and newer wind farms.

The 61-year-old Lewis & Clark Station is supplied by the nearby Savage Mine, which is ensnared in Westmoreland’s $1.4 billion bankruptcy case. The coal giant’s creditors are seeking to terminate supply agreements with the mine and the power plant in an effort to reorganize.

A similar scenario is playing out in Colstrip, where Westmoreland creditors are threatening to end contract between the Rosebud mine and the power plants.

The Lewis and Clark Station in Sidney. (photo credit: Montana Dakota Utilities)

A federal judge in Texas is expected to rule on the case February 26.

MDU officials said they are also planning to build a new natural gas-fired plant, capitalizing on fracking from the Bakken oil fields. The old coal plants have become too expensive to operate, they said.

“The plants have served our customers well, providing low-cost energy for many years, operating roughly twice as long as expected when they were constructed in the mid-1950s and early 1960s,” said Nicole Kivisto, MDU president and CEO.

“The age of the plants, low-cost competition on the market, and the ongoing cost to operate the plants all have contributed to the plants being too expensive to operate much longer,” he added.

MDU made the decision for the closure after conducting an integrated resource plan, which it conducts every two years to determine how best to manage its power load for customers.

The utility has 77 employees at both sites and about 10 will be required to run the natural gas plants. The company will offer training for other employees seeking to move to other open spots.