Once headed to the exits, Colstrip Power Plant operator Talen Energy has informed co-owners it will keep the coal-fired facility running for the foreseeable future.
Spokesmen for some of the six utilities that co-own the southeast Montana power plant confirmed separately this week that Talen’s offer had been accepted, but final details were still being worked out.
The reversal comes roughly a year after Talen informed its co-owners that the Pennsylvania-based energy company said it was “not economically viable” to continue operating Colstrip. Talen Energy did not respond to interview requests placed over two weeks.
Talen Energy has half ownership in Colstrip Units 1 and 2, which it co-owns with Puget Sound Energy. It is also paid by Colstrip’s other stakeholders to operate the entire facility. In May 2016, the company informed the owners of Colstrip Units 3 and 4 that they would need a new operator no later than May 23, 2018.
Paul Farr, Talen CEO at the time of the notice, said the company would lose millions of dollars operating Colstrip through the second half of 2016. A new generation of cheap natural gas power plants was driving down market prices so low that unregulated power companies like Talen were struggling to compete on the spot market.
But last fall, Talen sold to New York-based Riverstone Holdings LLC.
“The new management at Talen sent a request to the other Colstrip owners asking to rescind their notice,” said Grant Ringel, of Puget Sound Energy.
Talen sticking around provides the power plant with some stability as it prepares to shutter its two oldest units in six years or less. Units 1 and 2, the biggest polluters of the Colstrip complex, are being shut down to settle an environmental lawsuit between defendants Talen and Puget Sound Energy and plaintiffs Sierra Club and Montana Environmental Information Center.
None of Colstrip’s other owners were interested in replacing Talen as operator, which meant a third-party contractor had to be found to keep things running.
Colstrip Units 3 and 4 face challenges beginning in 2030 when PacificCorp will be required by law to cut coal power from its Oregon energy portfolio. Portland General Electric will begin removing coal power from its portfolio at the same time, eliminating the fossil fuel completely by the middle of the decade.
Those deadlines stem from a 2016 law introduced in response to a consumer petition for the utilities to drop coal power immediately to curtail carbon dioxide emissions. Concerns about climate change drove the discussion.
PacifiCorp has said it will continue to use Colstrip to provide electricity to customers outside Oregon.
The other Colstrip owners are Avista Utilities of Washington and NorthWestern Energy, Montana’s largest regulated utility.
Avista has included Colstrip in its generation plans through 2037. NorthWestern has said it expects Colstrip Units 3 and 4 to be viable through 2046.