MTPR

Bill Proposes Millions In Loans To Keep Colstrip Plants Running

Mar 20, 2017

The speaker of Montana’s House is hoping to extend the life of the coal-fired power plants in Colstrip by offering their operators loans to keep them running for at least the next five years.

Austin Knudsen’s Senate Bill 338 would allow the state to give up to $10 million a year in loans, if the money is used to keep the coal-fired plant’s two older units open until their scheduled close date of July, 2022.

"The closure of this plant will have a devastating impact on the town of Colstrip and on eastern Montana," Knudsen says. "This is an important issue, and we wanted to come up with something to try and keep this thing open as long as possible."

A lawsuit settled last year between environmental groups and the owners of Colstrip requires two of the plant’s four older units to shut down by July 2022. But there’s a chance that could happen sooner.

John Metropoulos is with Talen Montana, a 50-percent owner of the power generating units scheduled to shut down. He says the company is losing an average  of $30 million a year keeping Colstrip Units 1 and 2 open. Talen isn’t a publicly regulated utility like the plant’s other owners, and it cannot pass the cost of keeping the plant open to its rate payers.

"It’s possible that Talen Montana will close in this calendar year, 2017," says Metropoulos. "It’s our hope to be open until July 1, 2022, at the least. And we hope you pass this bill to help us find a way to do that."

Metropoulos said this bill isn’t a guarantee that Talen will keep Colstrip units 1 and 2 open, but it may help move the company in that direction.

A spokesman from a local boilermakers union also testified in support of the bill, saying whatever happens with the power plant will impact his workers.

The only testimony opposing the bill came from  the Montana Environmental Information Center. MEIC was among the organizations that filed suit under the federal Clean Air Act that evenly resulted in the agreement to close Colstrip units one and two.

MEIC Executive Director Anne Hedges says she softly opposes the bill, out of concern that Talen may not be able to pay back any money it borrows from the state’s board of investments.

"There is no guarantee if something happens to Talen that the state of Montana isn't going to end up having to pay for Talen’s clean up costs, and I don’t want that to happen," Hedges says.

Talen Energy representative John Metropoulos says the company would be able to prove it could repay a loan if it applied for one under this legislation.

The House Energy, Technology, and Federal Relations committee did not immediately vote on the bill.