Colstrip's coal-fired power plant may be casualty in partial owner's $5.3B merger

Colstrip's coal-fired power plant may be casualty in partial owner's $5.3B merger

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Colstrip cooling tower

Steam rises from cooling towers as three of the four power plants at Colstrip operate on January 29. 

A second Colstrip owner has agreed to be financially ready nine years from now to shutter the coal-fired power plant’s newest units.

Avista Corp., of Spokane, Wash., is putting December 2027 as the end of “remaining useful life” for Colstrip Units 3 and 4. That means the Washington utility will be financially ready to close by then, though Avista tells Montana officials Colstrip could operate beyond that date.

Montana’s Public Service Commission will weigh in on the decision later this year.

Ending the units’ remaining useful life in 2027 would help clear the decks for Avista’s $5.3 billion sale to Hydro One, of Ontario, Canada. A handful of environmental groups in Washington have agreed to settle claims over the proposed sale in exchange for the 2027 date, plus other concessions, which haven’t yet been disclosed.

Avista has customers across the inland Pacific Northwest, including northwest Montana. Regulators in each state within the utility’s footprint will have a say in Avista’s sale. In Montana, the union has intervened for its Colstrip members.

“I feel that if we’re not at the table, to use a phrase from my dad, we’re on the table,” said Al Ekblad, Montana AFL-CIO executive secretary. “We intervened because we represent a significant portion of the households of that community. We need to do everything we can to make sure our members and their families have a voice in this process.”

Colstrip, population 2,300, is Montana’s most union town, Ekblad said. From the workers at the power plant and those at Rosebud Mine to the teachers and public safety workers, union membership is high.

The six utilities that split ownership in the four-unit power plant need to take care of the community, Ekblad said.

Avista offered little information about the Colstrip arrangement when contacted Monday by Lee Montana. Spokeswoman Kasey Fielder said that until the settlement is finalized, Avista could say little. The company will use a portion of its deferred federal taxes to meet the 2027 deadline.

However, in filings with Montana’s Public Service Commission, Avista officials say they’re amenable to helping the Colstrip community transition to a post-coal-power economy. For now, Avista expects Units 3 and 4 to burn until the mid-2030s, it told the PSC.

Plans have been on the books since 2016 to shutter Colstrip Units 1 and 2 within five years. Those two units, owned by Talen Energy and Puget Sound Energy, were slated for closure by 2022 to settle a pollution lawsuit.

Avista’s announcement comes seven months after Seattle-based Puget Sound Energy announced that it would be financially ready by the end of 2027 to close the units. Together, Puget and Avista own 40 percent of Units 3 and 4, with four other stakeholders holding smaller shares.

Some of the parties now negotiating terms for Washington’s regulatory approval of the Avista sale were instrumental in securing Colstrip transition funding from Puget Sound Energy. Specifically, the Natural Resources Defense Council pushed for Puget Sound to establish a $10 million fund for Colstrip, contingent on a transition plan. In that case, Puget was seeking approval of new rates for its electric and gas customers. Colstrip’s future and its cost burden to Puget’s customers were issues.

Avista’s full settlement is expected to be made public by March 27. There are industrial and labor groups as well as environmental advocates with claims Avista and Hydro One will have to settle.

Hydro One’s home province of Ontario banned coal-burning power plants several years ago. The province hasn’t had a coal-fired power plant for four years. The government there is Hydro One’s largest minority shareholder.

Avista has told Montana’s Public Service Commission that it will continue to operate much as it now does after the Hydro One purchase.


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