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Montana advances bill to charge Colstrip owners for units' shutdown

Montana lawmakers have advanced several bills related to the eventual retirement of two units at the Colstrip power plant, including a bill that would require the plant's owners to mitigate financial losses to state and local governments after the units retire.

The units, jointly owned by Talen Energy Corp and Puget Sound Energy Inc., are slated for retirement by July 1, 2022. The retirement, called for under an agreement with environmental groups, has prompted Montana lawmakers to find ways to soften the impact to the Colstrip area.

Along with PSE and Talen, Avista Corp., NorthWestern Corp., Portland General Electric Co. and Berkshire Hathaway Energy subsidiary PacifiCorp also own parts of the four-unit Colstrip plant. Units 1 and 2, each with a nameplate capacity of 358 MW, have been operating for about 40 years.

Under Senate Bill 338, Talen and PSE would have to pay for the loss of value to residential and commercial property, workforce transition costs, and cost shifts tied to the retirement of the units, including changes in revenue to the state and local governments. The bill does not set a dollar amount for any of the costs to be paid by the companies but allows them to enter into an agreement with the governor and attorney general that addresses those obligations.

Proponents said the bill is needed to help provide assistance to Colstrip workers, the local community and the state once the units close. Opponents argue the bill is essentially a punishment that could scare off investment in Montana.

In discussing the bill March 30 on the Senate floor, sponsor Duane Ankney again said the bill is not about punishment, but about accountability. The bill ultimately passed with a 43-6 vote. The bill now moves to the House for consideration.

Lawmakers also approved other Colstrip-related bills by a wide margin.

The Senate on March 29 voted 50-0 to send S.B. 339 to the House. That bill, also from Ankney, deals with remediation requirements for when coal-fired generating units of at least 200 MW retire.

House Bill 585 passed in a 61-37 vote on March 27. Under that bill, Talen would be offered to apply to the state Board of Investments for a working capital loan of up to $10 million a year. The working capital loan would pay for costs of "everyday operations and required maintenance of a coal-fired generating unit of which an owner has a shared interest."

In pitching the bill to other lawmakers during a March 24 discussion, House Speaker Austin Knudsen said the closure of Units 1 and 2 will be a "huge loss" in tax revenue and jobs. The bill is an attempt to keep the units operational as long as possible to allow the town of Colstrip and workers at the plant to prepare, he said.

The Senate Energy and Telecommunications Committee is scheduled to hear the bill April 6.