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Senate panel advances bill to encourage NorthWestern to buy Colstrip plants

Posted at 3:35 PM, Feb 22, 2019
and last updated 2019-02-22 18:13:09-05

HELENA – A bill that supporters say could prolong the life of two coal-fired power plants in Colstrip was approved Thursday by a Senate committee – over the objections of those who said it’s a “blank check” for NorthWestern Energy to soak its customers.

“This bill represents an opportunity to establish more low-cost, reliable coal power onto NorthWestern Energy’s system and … to keep Colstrip 3 and 4 running, at or near capacity,” said Sen. Tom Richmond, R-Billings, the sponsor of Senate Bill 278.

The Senate Energy and Telecommunications Committee approved SB278 on a 9-4 vote, advancing it to the Senate floor – less than an hour after hearing the bill.

NorthWestern Energy, the state’s dominant electric utility, said it’s been talking to the other Colstrip 3 and 4 owners – primarily utilities in Oregon and Washington – about acquiring all or part of the plants in southeast Montana.

Sen. Tom Richmond, R-Billings, the sponsor of SB278

Colstrip plants 1 and 2 are scheduled to close by 2022. While 3 and 4 continue to operate, most of the out-of-state utility owners have said they’d like to abandon coal-fired power.

Under SB278, if NorthWestern could acquire the plants for $1, it could then charge customers for its future costs of operating and cleaning up the plants – without regulation by the state Public Service Commission.

David Hoffman, director of government affairs for NorthWestern, said Thursday the bill creates an opportunity for NorthWestern to acquire the plants at “no cost to our customers” and produce more reliable and affordable electricity.

But consumer advocates and environmental groups blasted the bill’s removal of regulation of future costs, saying it puts NorthWestern electric consumers on the hook for any and all costs of operating Colstrip – regardless of whether those costs are useful or not.

“I would not be surprised if SB278, if passed, were the largest blank check given to a utility by its customers, in the history of Montana regulation, possibly the entirety of the United States,” said Diego Rivas, senior policy analyst for the Northwest Energy Coalition.

Diego Rivas, Northwest Energy Coalition

Democrats on the committee also questioned why it’s necessary to get rid of PSC oversight, if the acquisition of Colstrip is a good deal for consumers.

“If indeed the companies are prepared to sell (their shares of Colstrip) for $1 and it’s such a terrific deal for consumers, isn’t the Public Service Commission going to approve it?” asked Sen. Dick Barrett, D-Missoula. “Why do we have to have an end-run around the Public Service Commission?”

Republicans on the panel said they saw no problem with the bill, because consumers have to pay for a plant’s operation costs anyway, and, under SB278, would be getting the benefit of the plant’s power without any acquisition costs.

They also said keeping Colstrip operating is a worthy goal, because of the jobs and tax revenue it creates.

All eight Republicans on the committee voted for the bill, as well as Democratic Sen. Gene Vuckovich of Anaconda. Four Democrats opposed it.

Organized labor also came out in support of the bill, as a lifeline to hundreds of unionized workers at the plants and affiliated coal mine.

“I would say it’s a give-Colstrip-a-chance bill,” said Al Ekblad, executive secretary of the Montana AFL-CIO. “At this point in time, (coal) is the way we generate energy. It does provide for the economic well-being of a community and a lot of our members.