House committee hears testimony on Colstrip bill

HELENA, Mont. (AP) — Current and former members of the Montana Public Service Commission lined up Monday to speak about a bill that would allow NorthWestern Energy to purchase a share of a coal-fired power plant without commission oversight.
NorthWestern and its supporters argued the legislation would let the utility quickly take advantage of any opportunity to obtain reliable baseload power from the Colstrip power plant while avoiding a long pre-approval or approval process before the commission and a possible court challenge by environmental groups opposed to using coal to generate power. The bill also would allow NorthWestern to spend up to $75 million over 10 years for investments in upgrades, major repairs or meeting environmental requirements.
NorthWestern spokesman David Hoffman said building a similar-sized natural gas-fired plant would cost about $250 million.
Colstrip’s two older units are scheduled to shut down by mid-2022 under a legal settlement. The bill seeks to extend the life of the plant’s two newer units, Units 3 and 4, as other Colstrip co-owners in Washington and Oregon look at reducing their use of coal energy.
NorthWestern owns 220 megawatts of generating capacity and would like approval to buy another 150 megawatts of generation, giving it ownership of about half of Unit 4.
“If the deal they are working on were come to pass, they need to move quick,” said Commissioner Bob Lake, who noted three of the five commission members support the bill.
Another commissioner, Roger Koopman, told the House Federal Relations, Energy and Telecommunications Committee that NorthWestern declined to purchase part of Colstrip in 2014 because of the risks involved.
He and other opponents said the bill, sponsored by Republican Sen. Tom Richmond, would shift those risks to ratepayers, while others were concerned about potential cleanup costs.
While supporters say the bill helps protect jobs and the tax base of the Colstrip area, opponents said the bill does nothing to guarantee that plant would remain open.
Opponents say the utility could make the purchase any time it wants and then ask the Public Service Commission to include the power in its rate base, which it did with a recent wind farm purchase.
Former commissioner Brad Molnar suggested the bill violates the state Constitution, which requires the consumer counsel to protect the interests of consumers before the Public Service Commission. This bill, he said, would eliminate the commission’s involvement and the consumer counsel protection.
The bill would also allow NorthWestern to buy a share of a critical 500-kilovolt power line that runs across the state.
Jeff Fox, the Montana policy manager for Renewable Northwest, said the Colstrip transmission agreement already requires that if any transmission owner decides to leave, the transmission asset must be offered to other owners, which would include NorthWestern.
The committee did not act on the bill, which has already passed the Senate.

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