Every Montana legislative session has at least one “Colstrip Bill” that is surrounded by controversy. The 2019 session is no different. The narrative regarding SB331, the Montana Energy Security Act, has been inaccurately skewed by groups who are ideologically opposed to the use of fossil fuels, even though they know Montana’s energy needs cannot be met by alternative sources.
NorthWestern Energy’s efforts will utilize a larger share of Colstrip to reliably and affordably serve its Montana customers. These groups are intentionally misrepresenting the impact of this bill because they want to force NorthWestern Energy (NWE) to buy capacity from more expensive sources, because making coal more costly is the only way their alternative sources can compete. Not only is this effort extremely shortsighted, but it is unfair to all Montanans who deserve reliable 24/7 power at an affordable price, which is exactly what SB 331 delivers.
Extensive modeling by NWE’s analysts has explored multiple scenarios that would fulfill their capacity needs. These scenarios include buying a larger share of Colstrip’s unit 4 or going with increased capacity in wind or solar. The numbers don’t lie; 150 megawatts from Colstrip unit 4 would be nearly $404 million cheaper than wind over a 20-year period, and it is around $425 million cheaper than solar.
If NWE acquired 150 megawatts from Unit 4, it would be the lowest cost option for meeting their customers’ future electricity needs. In fact, if NWE had owned the 150 megawatts provided for in SB331 during February and March, their customers would have collectively saved $13.5 million.
Let us be clear on what SB331 and recent amendments to the bill do. First, the bill authorizes NWE to purchase up to 150 megawatts for $1. The 222 MW purchased by NWE in 2008 and approved by the PSC cost $407 million. Paying the cost of $1 vs. hundreds of millions in rates is a major win for NWE customers.
Second, the bill requires the PSC to approve prudently incurred site remediation and decommissioning costs for just the 150 MW over 30 years. Any costs associated with NWEs current 222 MW has been removed from the bill. All previous costs and liabilities associated with the 150 MW, including decommissioning and site remediation costs must be paid by the transferring owners, not NWE or Montana customers.
Third, the costs that PSC must approve are capped at $75 million over 10 years. To assess the impact of these costs, consider that if NWE had owned the 150 MW this February and March, $13.5 million of those cost would have already been saved.
Why pass legislation to allow $75 million of costs over 10 years without PSC permission? The answer lies with the anti-coal groups that will use their massive multi-million-dollar budgets to tie this process up in litigation for years. Colstrip Units 3 and 4 are at the top of the Sierra Club’s hit list. As the bill sponsor Sen. Tom Richmond said during the hearing of the bill in the Senate Energy committee, “I don’t distrust the Public Service Commission at all, but what I see happening is that we have a nice process there that we all appreciate, but we have people that intervene in that process whose principal purpose is to shut down coal mining and coal generation. I don’t think that we have given the PSC enough resources to push back against that very well-funded agenda.”
In supporting SB331, the Legislature will put the greater good of Montana’s ratepayers first and take measures to gain more control over our state’s energy future. As energy demands increase, we must keep the environmental cartels funded by out-of-state money from shoving Montanans out into the cold and pave the way for their energy security at the lowest possible price.