Westmoreland Mining LLC is asking the state of Montana to think twice before allowing Colstrip Power Plant to buy coal from somewhere else.
The company’s Rosebud Mine is within walking distance of the power plant, which it has fueled for more than 40 years. Nearly 400 union miners work at Rosebud.
Colstrip Power Plant’s coal contract with Westmoreland is running out in December and power plant operator Talen Energy is now taking steps toward a different mine. Some observers suggest Talen is merely bluffing for a better deal from Westmoreland.
"Talen Montana is serious about ensuring that the Colstrip plant remains economically viable for as long as possible. Therefore, it is critical that we not be held only to one supplier," said Taryne Williams, Talen Energy spokeswoman. "Whether or not the Colstrip plant continues to take coal from the Rosebud Mine after the end of this year is heavily dependent on whether Westmoreland decides to submit an economically competitive offer rather than persisting in its efforts to impose punitive commercial terms on Talen Montana and the Colstrip co-owners by virtue of its monopoly."
Talen is jumping through all the necessary government hoops to get approval for coal from a different mine, which has Westmoreland concerned.
“The resulting economic impacts on the city of Colstrip and the state are tremendous,” argued Rosario Doriott Dominguez, attorney for Westmoreland Mining. Requesting relief from Montana’s Board of Environmental Review, Dominguez said Westmoreland “alone employs approximately 390 employees in Colstrip, pays over $40 million in local payroll annually, and spends over $60 million annually for goods and services in Montana.”
The mine and power plant together employ a majority of the households of the Colstrip community.
Westmoreland Mining LLC is a privately held company owned and operated by former first lien creditors of Westmoreland Coal Co., which went bankrupt in March.
Wednesday, the Board of Environmental Review handed the case over to a hearings examiner. Talen will have a chance to respond to Westmoreland’s insistence that the policies that created the power plant also bind the power plant to Rosebud mine.
In the past year, Talen has asked Montana’s Department of Environmental Quality to approve the burning of coal from a different mine, most likely a mine in Wyoming or the Spring Creek and Decker mines of Southeast Montana. The Colstrip operator has also sought permitting for a coal unloading facility for emptying coal shipped to the power plant by rail.
In addition, the power plant has sought help from Republican U.S. Sen. Steven Daines in extending a tax credit for “refined coal,” meaning coal that must be dried or chemically treated to temper its air pollution. The tax credit is a Bush-era subsidy that last year would have been worth $7.10 a ton — no small amount for a power plant the burns 10 to 13 million tons a year. Rosebud Mine coal hasn’t needed refining to comply with federal air pollution laws, but coal from another mine might.
There’s also the issue of the union jobs. Rosebud’s miners are unionized. Cloud Peak Energy mines, several of which have been eyed as possible coal sources for Colstrip Power plant, aren’t.