Costrip power plants

The coal-fired power plants at Colstrip are among the largest in the Western United States.

LARRY MAYER, Gazette Staff

Plans to shutter half of Colstrip Power Plant will move ahead with little input from Montana after Republican Attorney General Tim Fox chose not to make recommendations to a board overseeing the matter.

Fox had been granted a seat at the bargaining table in Washington where Puget Sound Energy is laying out its multi-year plan for future rates and the shutdown of Colstrip Units 1 and 2, among other things.

Montana legislators were shocked to learn the attorney general hadn’t filed testimony on the state’s behalf. In March, the Legislature set aside $80,000 to cover Fox’s costs of arguing for a proper shutdown, as well as benefits and pensions for Colstrip workers, and opportunities for Puget’s future investment in Montana energy.

Most were unaware, until contacted by The Gazette this week, that no testimony had been filed. The deadline was June 30.

“It takes us out of the driver’s seat and puts us in the backseat,” said Rep. Denise Hayman, House Energy Committee vice chairwoman. “We do not as a state have too many options that impact Puget Sound Energy. This was one of our few options, other than taking them to court directly.”

Billings Republican Rep. Daniel Zolnikov, House Energy Committee chairman, speculated that Fox blew the deadline for filing recommendations. Steps were being taken by the Legislature more than a year ago to make sure the attorney general had what he needed to represent the state in the matter.

Records show that as early as last summer, five months before the 2017 Legislature convened, work on the bill establishing the funds for Fox’s testimony in the Puget Sound rate case was being done.

But Fox’s staff this week told The Gazette that it was intentional not to file testimony in the rate case. The attorney general planned to build his testimony around a bill that died in the Legislature’s final days. Without it, Fox chose not to file testimony on Montana’s behalf. Fox’s staff refused to talk about their plans on the record, then issued the following statement from the AG’s communications director Eric Sell:

“Attorney General Fox is determined to mitigate the broader societal costs imposed on the state of Montana by the closure of Colstrip Units 1 and 2. Although the Montana Legislature narrowly failed to pass a law that would have allowed for recovery of such costs, and was the primary basis for our intervention in the rate case to begin with, we are still actively engaged in an attempt to advocate for the people of Colstrip and the interests of the state of Montana.”

Fox did not speak to The Gazette’s questions directly.

Fox had initially indicated that "many thousands of Montana residents will be economically impacted, directly or indirectly" by the shuttering of the Colstrip units and that the state would be representing those interests in Washington as Puget Sound Energy, which serves 4 million customers, finalized its plans for closing Colstrip's two oldest units within five years.

Last year, Puget Sound Energy agreed to shut down Colstrip Units 1 and 2 no later than 2022 under settlement terms with the Sierra Club and the Montana Environmental Information Center. That lawsuit centered on clean air.

The utility is also under consumer pressure to drop coal power. But shuttering Colstrip will cost Puget's customers. How much consumer rates increase and how Puget Sound Energy proceeds is a big part of the rate case before the Washington Utility and Transportation Commission.

It’s important for the state of Montana to have a seat at the table "throughout this rate proceeding so our interests can be adequately represented,” said Fox in February. “The state of Montana wants to make sure the company makes good on its legal obligations to Montana’s communities, workers and environment affected by the operation and potential retirement of coal-fired generating units in our state.”

The attorney general had hired a Seattle attorney, former Washington State Attorney General Robert McKenna, to represent Montana in rate case proceedings. McKenna told The Gazette last week he filed no testimony for Montana because Montana’s attorney general didn’t direct him to.

Washington officials told The Gazette that moving forward, Montana won’t be allowed to comment on Puget Sound Energy’s rate case as the final terms are set for the closure of Colstrip Units 1 and 2. Those plans require the approval of Washington’s Utility and Transportation Commission, which in February granted Fox a say in the matter because shutting down two of Colstrip’s four units is certain to have economic and environmental consequences for the state, especially the power plant’s namesake community of 3,000, which operates the power plant and mines the coal that feeds it.

The Washington commission also gave nine other organizations the right to intervene. Only Montana didn’t file testimony by the June 30 deadline.

Montana can question witnesses for other intervenors, said Amanda Maxwell, WUTC communications director. Montana could cross examine witnesses for the Sierra Club, which filed testimony proposing remediation plans as well as renewable energy development that could benefit Colstrip and Montana economically.

Doug Howell of the Sierra Club said he was surprised that Montana didn’t file any testimony in the rate case. Many of the economic development and environmental cleanup issues Sierra Club addressed are ones Montana likely would have also. Howell said his group would have worked with the state.

Intervening parties sometimes do take WUTC rulings to court when they disagree, but those lawsuits are grounded in the testimony and evidence that intervenors submitted during the rate case.

“One of the things you almost always want to do is build up the body of evidence to make your case. That’s so important,” Howell said. That body of evidence starts with the testimony filed in the rate case. “The process of the court is always based on record. If they were going to appeal, they should have submitted testimony.”

Zolnikov said it was never the intention of the Legislature that Fox not advocate for Montana. The failed bill that Fox’s staff said the attorney general needed was Senate Bill 338. The bill put forth a transition plan for closing the Colstrip units, while also putting Puget Sound Energy and co-owner Talen Energy on the hook for local property value losses resulting from the shutdown, plus other penalties.

Zolnikov said SB 338 was tabled after Montana’s Chamber of Commerce and renewable energy companies said the penalties would discourage investment in Montana.

“The exit fees that would have been created would have sent a signal to industries not to invest here,” Zolnikov said. “It was a thumbs-down from industries wanting to invest in Montana.”

The same legislators who tabled that bill still voted to fund Fox’s defense of Montana’s interests in Puget Sound Energy’s rate case. The attorney general should have filed testimony on Montana’s behalf regardless, Zolnikov said. There was another bill, Senate Bill 339, nearly passed unanimously, that addressed the decommissioning and remediation of Colstrip Units 1 and 2. That bill was estimated to result in a $200 million investment in Montana during the remediation process. The attorney general had options. The $80,000 set aside by the Legislature was supposed to pay for representing the state.

“There is no correlation with SB 338,” Zolnikov said. “They were supposed to represent our state.”

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Politics and agriculture reporter for The Billings Gazette.