Changes that Colstrip residents have dreaded will begin sooner than expected. On Tuesday, the operator of the 2,000-megawatt power plant announced that its two oldest, smallest units will be shut down at the end of this year.
The closure was mandated by December 2022 under a 2016 settlement of an air pollution lawsuit brought by the Sierra Club and Montana Environmental Information Center. But the closure is happening in 2019 because the two units, built in the mid-1970s, are no longer economically viable, according to Talen Energy, which operates the entire Colstrip plant and owns 50 percent of Units 1 and 2.
Talen sells its share of Colstrip energy production on the open market where that coal-fired generation isn't competitive with less expensive gas, hydro, solar and wind energy.
As Gazette reporter Tom Lutey told readers Wednesday, Units 1 and 2 are presently offline and haven't operated in the second quarter of this year while Pacific Northwest hydro power production is high.
Coal-fired plants require staffing and maintenance even when they aren't generating electricity, so workers are still on the job this spring. According to Talen, its Unit 1 and 2 employees will have jobs after the December shutdown. They will either be transferred to work at Units 3 and 4 or they will be offered jobs in plant cleanup, which is projected to take many years, possibly decades.
The permanent closure of the two units that together have a maximum generation capacity of 614 megawatts, could result in greater use of the remaining newer, larger units — depending on market demand. Increased power production from Units 3 and 4 would offset some of the loss in coal demand from the shutdown of Units 1 and 2.
Although no jobs may be lost at the power plant, employment at the nearby coal mine is less certain. Westmoreland, the mine owner, went bankrupt earlier this year. Its creditors now own the Rosebud Mine and have demanded higher prices for its coal. The current coal supply contract with Colstrip power plant runs out a year's end, which Talen said was a factor in the decision to close Units 1 and 2 then.
Higher priced coal would make Colstrip power more expensive to produce, cutting into its owners' profits and eventually raising prices for customers of the regulated utilities that own Units 3 and 4.
Colstrip's assets include a well educated workforce and top-notch public schools. Bad as Tuesday's announcement sounds, it also brings opportunities:
- Transmission lines that carry power from Colstrip to the Pacific Northwest will be available to carry renewable energy generated in Montana. Solar and wind projects that have been planned for when that capacity opened up after 2022, could move ahead more quickly.
- The Colstrip community itself has potential for a wind farm.
- Puget Sound Electric, which serves customers in Washington state, has pledged $10 million to help the community — including plant workers wherever they live. PSE is required by Washington law to stop supplying coal-fired energy by 2025. The Oregon utilities that own shares of Units 3 and 4 have state-imposed deadlines of 2030 and 2035 to supply all their customers will electricity generated without coal.
- A year-long series of Colstrip/Rosebud County community meetings ended in December with a plan that incorporates lots of economic information and creation of a Community Impact Foundation to direct Puget Sound Electric money as local residents decide.
- At least $2 million in federal grants for retraining workers has been designated for Colstrip.
- In this semi-arid region, the city and the power plant jointly own a water right to the 69 cubic feet per second from the Yellowstone River 30 miles away. When Units 1 and 2 are no longer using water, it will be available for new business development.
On Tuesday, U.S. Sen. Steve Daines blamed "extreme environmental regulations, fringe litigation and partisan politics" for Talen's decision. His statement ignores the harsh market reality: Those aging generating units aren't making money for a company that has to be competitive to stay in business.
The town of 2,300 and surrounding Rosebud County won't face the changing energy future alone. Now state and local government must strive to mitigate the effects of this difficult transition on the workers and their community.
"We'll do everything we can to help that community," Gov. Steve Bullock said. Montanans will hold him to that promise.