The Montana Chamber of Commerce on Monday called for keeping Colstrip's coal-fired power plant running as long as possible after releasing a forecast of statewide economic losses should it close early.
The report suggests Montanans would collectively earn $5.2 billion less between 2028 and 2043, should the Colstrip Electric Generating Station close completely 10 years from now.
More than 7,000 Montanans would leave the state in search of better economic opportunity. It was estimated that 3,300 jobs statewide would be lost, including 1,211 jobs in state and local government — more than at the Colstrip power plant and coal mine combined, a result of lost state tax revenue.
The report contemplates an early shutdown of Colstrip Unites 3 and 4 sometime in 2027, and what that would mean to Montana’s economy. Already, the four-unit power plant's two oldest generators are slated for closure in 2022 to settle an air pollution lawsuit.
“We want to get this out to as many people as possible and start planning,” said Webb Brown, Montana Chamber CEO. “Our ultimate preference for this plan is to continue 3 and 4 for as long as possible. If this helps that discussion in ways we can do that, we’re happy to have it there.”
The Chamber Foundation paid the University of Montana Bureau of Business and Economic Research to conduct the study, which relied on data supplied by three major Colstrip stakeholders: Westmoreland Coal Co., which runs the mine that feeds Colstrip; Talen Energy, which operates the power plant and is a co-owner; and NorthWestern Energy, another Colstrip co-owner and Montana’s largest utility. Monday’s report is the latest of three reports, two of which have been criticized for overstating the economic impacts of closing Colstrip.
“I’m not sure what this study brings to the table in terms of helping decision-makers understand what this economy is going to be. It’s shortsighted in that respect,” said Mark Haggerty, of Bozeman-based Headwaters Economics.
Colstrip’s namesake host community, along with the state of Montana, should be planning for the power plant’s eventual shutdown, whenever that day comes, Haggerty said. It’s the only aspect of Colstrip’s future Montana controls.
Colstrip is owned by six utilities, four of which are making plans to exit the power plant by at least the mid-2030s. None are obligated to stick around. In Washington state, Colstrip owners Puget Sound Energy and Avista Corp. have agreed to be financially ready to shut down Colstrip by the end of 2027. The Washington utilities have committed $14 million to help Colstrip transition to a post-power plant future. In Oregon, Colstrip owner PacifiCorp is legally obligated to stop serving customers with coal power by 2030. Owner Portland General Electric has until 2035 to cut the cord on coal power, but plans to phase out of coal power in years leading up to the deadline. Public concerns about climate change are driving the utilities' plans.
The only Colstrip owners not facing pressure to exit are the two participating in the Montana Chamber of Commerce Foundation's study. NorthWestern Energy is under no pressure to leave Colstrip early. NorthWestern is the only Colstrip owner to give the power plant a life expectancy in the 2040s.
Talen, despite indicating two years ago it was losing millions of dollars a month as a power plant operator and needed to get out, has decided to stick around.
It took about three hours for the report to become a campaign issue for Montana's congressional candidates, who issued press releases.
“We cannot allow Colstrip to shut down," said Matt Rosendale, GOP challenger to Montana Sen. Jon Tester. We would lose over 3,000 Montana jobs and over $1 billion in tax revenue — this would devastate Montana families and our entire economy. I refuse to stand by and watch as Sen. Tester tries to implement his radical environmental agenda here and kill our coal industry and destroy thousands of Montana jobs. I’m in this race because I will fight each and every day to support our coal industry, protect our Montana jobs, and provide affordable energy to Montana families."
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It's generally agreed that public concern about climate change in Oregon and Washington, coupled with state law, are the reasons Colstrip owners are feeling pressured to exit. Also, energy prices have fallen and higher-priced coal power is struggling to complete.
“Jon has always said that coal plays a pivotal role in Montana's energy future," said Chris Meagher, a Tester campaign spokesman. "That’s why he successfully passed legislation to expand the Carbon Capture Tax Credit. If Matt Rosendale truly cared about Montana jobs, he wouldn’t have supported transferring public lands so they could be sold off and he wouldn’t support tariffs which create uncertainty for Montana’s farmers and ranchers.”
Gianforte called it critical that the units remain open and functional.
“Shutting down Colstrip Units 3 and 4 prematurely and unnecessarily would be devastating for all of Montana, but particularly for Eastern Montana,” said Republican Rep. Greg Gianforte. “Keeping our communities strong and whole is an issue that should rise above politics. I will continue to stand up and be a strong voice for protecting Colstrip, our rural communities, and our Montana way of life.”
Kathleen Williams, a former state legislator and Gianforte's Democratic challenger, said the Chamber study was a call for planning.
“This study is a wake-up call to ensure that we proactively plan for the future and continue to support existing Montana jobs," said Williams. "After visiting with community leaders, workers, and policy experts in Colstrip, I know how much that community contributes to Montana. I look forward to being a part of conversations to plan for a future where the town of Colstrip stays vibrant for decades to come.”
U.S. Sen. Steve Daines, R-Mont., called the report "a chilling wake-up call."
BBER Economist Patrick Barkey told reporters that although the Chamber paid for the study, that didn't influence its conclusions.
"I answer any number of questions, the premise of which is 'how can we value research which is sponsored?" said Barkey, who noted that three quarters of BBER research is sponsored by someone. "The approach we take to that is just be as transparent as possible."
The study for the Chamber relies on economic modeling leased from Regional Economic Models Inc. It's a model that Haggerty said will consider the absence of a power plant, but with all other economic contributors staying the same.
For example, the study concludes that more than 7,000 Montanans — more than double the actual workforce at the power plant and mine — will move out of state seeking new economic opportunity, once the Colstrip power plant closes.
"As a result, some Montanans will move away. They will move to other regions, move to other states," Barkey said. "That impact has a cascading effect as you go forward in time, as these people move there are people looking for economic opportunity which by and large are the working-age population who are taking their kids, or their yet-to-be-born kids with them."
What's more likely, Haggerty said, is that Montana's growing economy will offer new opportunities for the state's workers and take the sting off losing the power plant.