The latest bill to bail out coal-fired Colstrip Power plant is drawing critics, including former Montana Democratic Gov. Brian Schweitzer, who says the bill is a crony capitalism at its worst.
Scheduled for a Tuesday hearing by the Senate Energy Committee, Senate Bill 397 obliges NorthWestern Energy customers to pay for any additional shares of the power plant the utility buys, plus associated repairs and environmental cleanup. Those terms could cost the utility’s customers up to $1 billion per power plant unit, according analysis by Montana’s Public Service Commission and, taken to the extreme, $1.9 billion for ownership of Colstrip Units 3 and 4.
The power plant’s future, and NorthWestern’s investment in it, have become increasingly vulnerable as the majority of Colstrip’s owners, who have a 70% stake in the plant, prepare for coal-power bans in Washington and Oregon. Already, there have been two bills, SB 265 and 266, empowering the state government to nullify portions of the Colstrip owners’ contract in order to keep short-timer owners from objecting to repairs.
Analyst David Schlissel, of the Institute for Energy Economics and Financial Analysis, said that based on Talen Energy’s reports to the Energy and Information Administration, Unit 4 generation hasn’t been that constant. The Unit’s annual capacity factor was 50% in 2020. Since customer were put on a billing schedule for Unit 4, the capacity factor is about 69%.
At a time when NorthWestern indicates it wants more coal power, other utilities are getting out because the other energy sources including natural gas and renewable energy are cheaper, Schlissel said.
“If Colstrip continues to operate, it will be an island of coal in a sea of renewables, from Colorado to the Pacific Ocean,” Schlissel said.