Smoke rises from the Colstrip Steam Electric Station, a coal power plant in Colstrip, Montana, in 2013. The plant’s operator said Tuesday that it plans to shut down two of the plant’s four units about 2½ years early, citing costs and the unwillingness of a coal supplier to lower costs. (AP Photo/Matthew Brown ,File)

Smoke rises from the Colstrip Steam Electric Station, a coal power plant in Colstrip, Montana, in 2013. The plant’s operator said Tuesday that it plans to shut down two of the plant’s four units about 2½ years early, citing costs and the unwillingness of a coal supplier to lower costs. (AP Photo/Matthew Brown ,File)

Operator: 2 units of Montana coal plant to close this year

Demand for coal is dropping as utilities turn to cheap natural gas and renewable energy,

  • By MATT VOLZ and MATTHEW BROWN Associated Press
  • Tuesday, June 11, 2019 4:51pm
  • BusinessNorthwest

By Matt Volz and Matthew Brown / Associated Press

HELENA, Mont. — The company that operates a coal-fired power plant in eastern Montana said Tuesday it will close two of the plant’s four units about 30 months ahead of schedule because of the high cost of running them and the unwillingness of its coal supplier to lower prices.

Talen Montana said in a statement the older units of the Colstrip Steam Electric Station, whose combined 614-megawatt capacity is co-owned by Talen and Puget Sound Energy, will be permanently retired Dec. 31. The newer Colstrip units, which generate the bulk of the 2,100-megawatt plant’s output and are owned by six companies, will continue operating although those whose livelihoods depend on the plant worry it also may be shuttered early.

The partial closure would be the latest among coal-fired plants going offline across the nation. Demand for coal is dropping as utilities turn to cheap natural gas and renewable energy, while pollution rules increase coal power costs and some states worried about climate change seek to divest from coal.

The older units had been slated for closure by mid-2022 as part of a settlement in an environmental lawsuit. The decision to retire the units early came after an extensive review and exhaustive efforts to make the units economically viable, Talen Montana President Dale Lebsack said.

“Fuel constitutes the bulk of our operating cost, and our repeated efforts to negotiate lower fuel prices with Westmoreland Rosebud Mining, the plant’s sole and only historically permitted fuel supplier, have been rebuffed.” Lebsack said in the statement. “Rather than working with us to keep Units 1 and 2 open, Westmoreland is proposing to increase the units’ fuel cost going forward.”

The adjacent Rosebud mine is owned by a subsidiary of Westmoreland Coal Co., which emerged from bankruptcy this spring as a private company owned by former creditors. A message left at the company’s headquarters in Englewood, Colorado, was not immediately returned on Tuesday.

Colstrip is the one of the largest coal plants west of the Mississippi River, and the small town of 2,300 where it’s located is dependent upon the plant for a large part of its economy. It has about 320 workers on site, according to Talen, and mining the coal provides more jobs.

The town has been bracing for the closure because of a legal settlement with conservation groups aimed at resolving a lawsuit over decades of pollution from the plant, but its residents had hoped to keep the units running at least until the June 2022 deadline mandated by the settlement.

Colstrip Mayor John Williams said he was hopeful Talen and Westmoreland still could work out a deal, but was uncertain whether it’s not too late for Talen to reverse course.

“We’ve been working hard to encourage other entities to come to Colstrip, to diversify our economy but at this point in time we haven’t been successful,” Williams said.

Republican state Sen. Duane Ankney, whose district includes Colstrip, said Tuesday’s announcement doesn’t appear to be a negotiating ploy.

“They’re bleeding several million dollars,” Ankney said. “I might be wrong, but if I had to make a bet, I’d say this isn’t a tactic, this is what’s going to happen.”

Anne Hedges, deputy director of the Montana Environmental Information Center, one of the plaintiffs in the lawsuit against Colstrip, said the early closure is a reflection of the market changing more quickly than anybody anticipated.

“It’s a wake-up call to Montana to pay attention, get with the program and figure out how we’re going to develop energy sources the rest of the world wants to buy and are affordable,” she said.

Pennsylvania-based Talen for years has been saying the plant is not economically viable, with company officials saying in 2017 that they were losing about $30 million a year. State lawmakers made several efforts to prop up the plant, including passing a measure allowing the company to borrow up to $10 million a year from the state and a failed bill to allow NorthWestern Energy to buy out other Colstrip owners for $1.

Colstrip residents also worry that the plant’s newer units also will be shut down a few years later as the plant’s other utility owners located in Washington and Oregon seek to remove coal from their own power portfolios.

Lowering the cost of the coal supply for the remaining units is a priority for Talen, and its coal contract with Westmoreland up at the end of the year. Talen officials are seeking a “competitive offer” from Westmoreland, spokeswoman Taryne Williams said.

Ankney said news of the partial closure should rally leaders to redouble their efforts to keep the rest of Colstrip operating. State lawmakers don’t meet again until 2021, and Ankney said in that interim, he and others will brainstorm proposals.

He declined to comment on the coal contract negotiations between Talen and Westmoreland.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Northwest

Washington State Ferries said it would deploy its new electric ferries first on the Mukilteo-Clinton run. Additional orders are expected to follow to replace more than a dozen other aging vessels in the fleet. (Photo by Tom Banse)
Washington state to buy new hybrid electric ferries from Florida shipyard

Gov. Bob Ferguson made the final call to turn down a higher bid from a local boat builder.

The Washington state Capitol. (Photo by Jacquelyn Jimenez Romero/Washington State Standard)
These Washington laws take effect July 1

Fee hikes for hunting and fishing licenses, workplace protections for immigrants and… Continue reading

Washington will have the nation’s third-highest state gas tax behind California and Pennsylvania.(Photo by Bill Lucia/Washington State Standard)
Gas tax will rise in Washington on July 1

Washington’s century-old fuel tax is going up again. On Tuesday, the gasoline… Continue reading

The BEAD program was created under the federal infrastructure law that former President Joe Biden signed in 2021. It was fashioned as a way to expand high-speed internet service into rural areas and other parts of the country where it was unavailable or lacking. (Stock photo)
Feds throw Washington’s $1.2B broadband program into disarray

States spent more than two years preparing to distribute the infrastructure funding, now the Trump administration is making last-minute changes to the rules.

Firefighters undertake a prescribed burn at the Upper Applegate Watershed near Medford, Oregon on Thursday, April 27, 2023. Such burns can help reduce the risk of large wildfires. (Kyle Sullivan, Bureau of Land Management/Flickr)
Trump looks to ‘consolidate’ wildland fire agencies

An executive order signed earlier this month by President Donald Trump would… Continue reading

Photo courtesy of Washington governor’s office
Washington Gov. Bob Ferguson, center, met with several statewide elected officials on Monday to discuss the how federal funding cuts could impact the state.
Tax collections tumble again in latest Washington budget forecast

The decline in receipts will force the state to draw down savings, but Gov. Bob Ferguson said he isn’t ready to summon the Legislature into a special session.

An EV charger in Granite Falls outside of Granite Falls City Hall on Thursday, Aug. 22, 2024 in Granite Falls, Washington. (Olivia Vanni / The Herald)
Seattle judge orders Trump administration to unfreeze EV charger funding

The preliminary court ruling would unlock the money for more than a dozen states, including $71 million for Washington.

Nearly three-quarters of acute care hospital inspections were late, as of December, according to the Joint Legislative Audit and Review Committee. One facility hadn’t gotten a state inspection since early 2018. (Stock photo)
Washington faces major lag in state inspections of hospitals

Washington state inspectors are way behind in their examinations of hospitals and… Continue reading

A classroom inside College Place Middle School in Lynnwood in 2023. New discipline guidelines for public school students will go into effect across Washington state next month. (Annie Barker / The Herald)
Washington updates student discipline rules for public schools

New discipline guidelines for public school students will go into effect across… Continue reading

The Northwest ICE Processing Center in Tacoma, which is one of the largest immigrant detention facilities in the western U.S. (Grace Deng/Washington State Standard)
WA looks to strengthen safety net for children whose parents are deported

Detained immigrant parents worried who will pick their children up from school.… Continue reading

An EV charger in Granite Falls outside of Granite Falls City Hall on Thursday, Aug. 22, 2024 in Granite Falls, Washington. (Olivia Vanni / The Herald)
Seattle judge considers reversing Trump’s EV charger funding freeze

Congress appropriated $5 billion, but the Trump administration stopped it from reaching states. Washington is leading the legal fight to access the money.

Washington’s payouts — known as tort liability — have skyrocketed from $72 million in fiscal year 2018 to more than $281 million last fiscal year. (Stock photo)
Washington state lawsuit payouts skyrocket to more than $500M in past year

Claims against the state’s Department of Children, Youth and Families are driving a spike in cases.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.