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Opponents Protest Bill Allowing NorthWestern To Pass Colstrip Costs To Customers

A handful of people stand along a roadside holding signs that read, "No bailout for NorthWestern" and "Colstrip is a clunker, don't be a junker."
Freddy Monares
Montana Public Radio
People in Missoula protested a bill that would allow electric utilities to collect a rate of return and pass on costs of coal-fired power plants to customers ahead of a Montana House committee hearing on the policy on Apr. 14, 2021.

As the Montana House held its first hearing on a bill that could allow NorthWestern Energy to pass costs on to its customers for the utility’s coal-fired power investments, opponents of the idea held protests in multiple cities.

Lawmakers continue to debate the cost of the proposal.

Around 50 people gathered in a protest organized in part by climate change advocacy group 350Montana in front of a NorthWestern Energy office building in Missoula.

It came a few hours before Senate Bill 379 was scheduled for a House committee hearing Wednesday. A similar demonstration was reported in Bozeman ahead of the hearing.

Following the bill’s passage in the Senate last week, debate continues over how the policy could allow NorthWestern Energy to collect a rate of return and other costs from customers should it purchase an added share in the Colstrip power plant.

Jan Hoem at the Missoula demonstration said she’s worried about what that could mean for Montanans’ energy bills.

"As I see it, it’s NorthWestern Energy making risky choices and charging their customers for the outcomes," Hoem said.

NorthWestern Energy owns 30% of the Colstrip power plant, which closed two of its four units last year. Most of the other six power plant owners are tied to states phasing out coal-fired generation. Washington State has said it will require utility companies to get rid of coal-fired power by 2025. Oregon has pinned its coal phase-out date to 2030.

NorthWestern Energy has said it’s looking to buy into the plant as others leave in order to meet customers' demand for reliable and affordable electricity.

SB 379 sponsor Republican Sen. Steve Fitzpatrick of Great Falls, who’s the son of NorthWestern Energy's former director of government affairs, says the bill would help compensate the utility for buying more of the power plant.

“It’s allowing NorthWestern Energy to obtain dispatchable power, and when I say dispatchable power, that’s energy from a source like coal, hydro, or gas, something you can get immediately by turning on a button or flipping a lever," Fitzpatrick said.

Washington-based Puget Sound Energy was poised to sell its 185 megawatt share to NorthWestern Energy last year for a dollar or less, but the deal fell through.

NorthWestern Energy Director of Government Affairs David Hoffman was one of 18 people to speak in favor of the bill at its House committee hearing Wednesday.

He read from a press release NorthWestern released that same day that says the utility will only consider acquiring enough additional critical power from Colstrip to reliably and affordably serve Montana customers

“The best way to do that is through a power purchase agreement, where we don’t take on the remediation responsibilities and costs," Hoffman said.

The 33 opponents to the bill at the hearing Wednesday included the Montana Consumer Counsel and several commissioners from the electric utility regulatory body Montana Public Service Commission, made up of five elected Republicans.

PSC Chairman James Brown said the bill puts the Public Service Commission in a difficult position by limiting how regulators could respond if Northwestern buys more of Colstrip.

“If the commission denies the acquisition, well, it’s a win-win for NorthWestern Energy, because what they get to do is point a finger at commissioners and say, ‘Look, we didn’t close down Colstrip. That big bad PSC didn’t approve the terms that would’ve kept this facility open,’” Brown said.

The entire PSC voted in March to oppose the bill.

PSC staff analyst Robin Arnold told commissioners in a briefing earlier this week that the policy gives regulators some oversight, but removes their ability to balance utility and customer interests.

“Mainly because this bill prescribes the terms of approval within the statute and tips the balance in favor of the utility by pushing all of the risk onto the ratepayers," Arnold said.

A memo from the Montana Public Service Commission staff provides several possible estimates for costs to customers. It said customers could pay between $56 and $86 extra a year if NorthWestern bought Puget Sound’s 25 percent share in the plant through the bill.

That would mean customers could end up paying between about $600 and $1,200 dollars over what PSC analysis says is the 21-year assumed remaining life of Colstrip Unit 4.

SB 379 was not voted on in committee Wednesday.

Kayla writes about energy policy, the oil and gas industry and new electricity developments.