MTPR

Ankney On Colstrip Settlement: 'I Hope Seattle Goes Dark When It's 10 Below Zero'

Jul 14, 2016

What is going to happen to Colstrip? That was the question Thursday as state legislators questioned companies that agreed to shut down two of the four coal-burning units of the Colstrip electricity plant.

The announcement made by Washington-based Puget Sound Energy and Pennsylvania’s Talen Energy was the result of a settled lawsuit between those companies and environmental advocacy groups in Montana.

Sen. Duane Ankney (R) SD20
Credit Montana Legislature

Senator Duane Ankney from Colstrip was the most frustrated lawmaker at at the Energy and Telecommunications Committee hearing.

"Personally, I hope Seattle goes dark when it is 10 below zero."

He told the energy company representatives that he was there driving pilings when Unit 1 was built in the 1970s.

"While I’d really like to dislike both of you, I mean, you really don’t have anything that you caused. But I do think that there is a responsibility here. And I would expect these companies who have made billions of dollars in Montana to step up. Montana has been under the thumb of some out-of-state company from the first ounce of copper that was mined. Big companies, out of state, pulling out of Montana, leaving us high and dry."

Ankney says coal jobs in Montana are being lost because of litigation and federal subsidies favoring renewable energy sources.

About 350 people work at the Colstrip plant. By 2022, Units 1 and 2 of the plant will close, although officials say it could happen sooner.

Puget Sound Energy holds the largest ownership share of Colstrip, including parts of the boilers scheduled to shut down, and the two that won’t.

Company Vice President Steve Secrist told Ankey the closure of part of the plant does not mean the company is abandoning the community.

"It is our hope that we will continue to be an active member of the community of Colstrip. In that regard I acknowledge your frustration. And I would comment that the journey getting here has been frustrating on our side as well. We are trying to do the responsible thing. We have been transparent every single step of the way. And we will continue to have an eye, and I will say a dual eye, for the best interest of our customers and the best interest of employees that have worked so hard and so proudly in the community of Colstrip."

Puget Sound will retain their ownership of the newer, larger and cleaner-burning Units 3 and 4.

Talen Energy Chief Financial Officer Jeremy McGuire told Montana legislators that his company is losing money operating in Colstrip.

"Shutting down Colstrip Units 1 and 2 has never been our preferred option. We recognize the importance the Colstrip station plays in the state's industry, economic development and tax base, as well as its support for the energy infrastructure of other states.

"Our willingness to agree to an early shutdown of Colstrip Units 1 and 2 and otherwise exit Montana is driven by the economic realities facing Talen Montana. As we have said multiple times, our stated objective is to conclude our business in the state as quickly as reasonably possible. We have used the phrase 'not economically viable' and we would like elaborate on a few of the factors affecting Talen Montana. The dramatic shifts in energy markets driven by historically low natural gas prices compounded by policies that subsidize and provide artificial advantage to renewable generation have driven the market price for electricity to very low levels. The financial impacts have been most produced at coal-fired stations. This has certainly been the case for Talen Montana."

McGuire says Talen will continue looking into options to transfer its ownership in Colstrip, but currently has no plans in place to step away from Units 3 and 4.

The legal settlement to close Units 1 and 2 was with the Sierra Club and Montana Environmental Information Center, brought under the federal Clean Air Act. That settlement does not impact Units 3 and 4 and still needs to be approved by a federal court.

During Thursday’s legislative committee, Republican Chairman from Kalispell Keith Regier questioned MEIC’s Deputy Director Anne Hedges on her organization’s motives.

"Our end goal is to address climate change as quickly as we can, doing our part as a state to address the issue that is a global issue. Coal is a significant contributor to climate change, and we have to transform our energy system," Hedges said.

"Okay. I have been reading a few articles that some climatologists think we are getting into a global cooling cycle now. Have you read the same thing?" Regier asked.

"[Laughter] Mr. Chair, I’m going to go with the scientific consensus that climate change is real, it is serious, and we need to do something about it as quickly as possible," Hedges responded.

The Montana Taxpayers Association estimates that Rosebud County could lose close to a quarter of its tax base when Colstrip Units 1 and 2 shut down.

The plant closures are a big concern to Montana’s labor unions, says Chris Cavazos with the state AFL-CIO.

"This is a very very devastating thing for our leaders and our members. It is going to have a direct impact on their lives. And I thank all of you who have worked with us over the years to try and do something. And we are here to try and do something to make sure that those workers don’t get left out in the cold."

Puget Sound and Talen have not yet set a timeline for closing Units 1 and 2 and don’t currently have a projection on how many workers could lose their jobs.

Both state lawmakers and the energy companies have discussed creating job training options for displaced workers, but no plans for that have been established.