December 11, 2019 Read More →

Montana’s largest utility to boost stake in Colstrip coal plant

Billings Gazette:

NorthWestern Energy plans to increase its share in Colstrip Unit 4 by buying out another power plant owner who recently revealed the coal-fired unit needs $20 million in repairs.

Montana’s largest monopoly utility said Tuesday that it will buy out Puget Sound Energy for $1. The price is identical to what NorthWestern pitched to the 2019 Montana Legislature 10 months ago. Lawmakers rejected the deal, with several expressing worry the utility’s customers would face hidden debts associated with repairs and future environmental cleanup costs. In the Legislature, NorthWestern never identified which of Colstrip’s five other owners was offering shares.

NorthWestern currently has a 30% share in Unit 4, for which its customers owe $300 million. Puget’s share would boost NorthWestern’s stake to 55%. In a separate deal, NorthWestern would buy Puget’s capacity on Colstrip’s transmission lines for $2.5 million to $3.7 million.

The utility has the ability to buy Puget’s assets without government approval, but if its customers are to shoulder costs associated with maintenance, operation, taxes and environmental cleanup, the Public Service Commission will have to sign off. NorthWestern indicated it will seek PSC approval early next year.

For Puget Sound Energy, the sale would leave Colstrip power plant’s most dominant owner with just 25% of Colstrip Unit 3. The Washington-based utility owns half of Colstrip Units 1 and 2, with Pennsylvania-based Talen Energy owning the other half. The two companies announced in June that those units were no longer economical and would be shut down. Units 1 and 2 will stop operating in a few weeks.

Puget has to stop using coal power under Washington law by the end of 2025. Other Colstrip owners are also making exit plans. Spokane-based Avista Corp. told The Billings Gazette last week that plans are being made to exit in 2025, although currently it plans to exit by 2027. PacifiCorp plans to exit in 2027. Portland General Electric plans to exit no later than 2035, although it plans to pay off its Colstrip debt by 2030 and taper off of coal power over time.

[Tom Lutey]

More: NorthWestern Energy plans to buy bigger stake in Colstrip power plant for $1

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