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NorthWestern will not buy struggling Mont. coal plant

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NorthWestern will not buy struggling Mont. coal plant

NorthWestern Corp. will not buy a coal-fired power plant that is facing the possibility of closure this year if a new owner is not found, a company spokesman said Feb. 20.

Private developer Rocky Mountain Power LLC has been seeking a buyer for its 107-MW Hardin power plant, which has lost money since 2014 because of the decline in the market price of electricity. While NorthWestern was seen as a potential new owner, the company, which does business in Montana as NorthWestern Energy, in late January decided not to buy the plant, spokesman Butch Larcombe said.

There were several reasons for the decision, Larcombe said; primarily, the "plant simply doesn't fit our generation needs at this point."

With NorthWestern out of the running, owners of the merchant power plant are pursuing other opportunities, said Pam Bucy, an attorney representing the plant. Bucy said NorthWestern's decision is disappointing, as the plant is a good fit for the company given that it is new, efficient and provides reliable, consistent power at a good price.

While there are "a few irons in the fire" to keep the plant operating, she said Hardin could close in the second quarter if an agreement is not reached.

The Hardin plant was built in 2006 and employs 30 people, Rocky Mountain Power told the Montana Public Service Commission in a November 2017 letter outlining the plant's economic troubles. Closure could affect those working at the nearby Absaloka Mine, which supplies coal to the plant and is controlled by the Crow Nation.

Rocky Mountain Power filed the letter in a docket dealing with NorthWestern's electric supply plan. (Montana PSC Docket No. N-2015-11-91)

Larcombe pointed to recent decisions and comments by the commission that "appear to have altered" the company's ability to buy and finance additional utility-owned generation facilities. He said a decision regarding maximum 15-year contract lengths for all new generation restricted NorthWestern's ability to pursue new generation that it would own.

NorthWestern President and CEO Robert Rowe on the company's fourth-quarter 2017 earnings call cited that decision in explaining why the company canceled an all-source request for proposals.

Commission spokesman Chris Puyear pushed back on NorthWestern's remark.

"The idea that the PSC has somehow impaired NorthWestern's ability to honestly consider the Hardin generation station is patently ridiculous," Puyear said.

He added that regulators have repeatedly directed NorthWestern to evaluate existing resources such as the Hardin plant before committing to building new gas-fired power plants.

Puyear also said NorthWestern appears to have "completely missed" the commission's comments on their most recent resource plan, which cited the Hardin plant as a resource that should be considered to meet future customer demand, and ignored criticism of their most recent competitive procurement process.