Colstrip owners sign new coal contract

Today the utility owners of the Colstrip coal plant announced that they signed a new contract for coal from the nearby Rosebud Mine through 2025. While the owners have yet to disclose the price they’re now paying for coal, it’s likely to be higher than the previous contract that expires at the end of this month, further eroding the economic viability of the aging plant.

Westmoreland Energy Co., which operates the Rosebud Mine that feeds the plant, recently went bankrupt and the company’s new owners were demanding a higher price for coal from Colstrip owners. These rising costs led to the recent announcement that Units 1 and 2 would retire two years earlier than previously agreed. 

The Montana Consumer Council found that Colstrip is NorthWestern Energy’s most expensive source of electricity, roughly three times of the price of Montana wind projects. The Montana Public Service Commision recently expressed “significant doubt” that the plant would last more than a few years. Washington state regulators recently revealed that Unit 4 at the plant needs more than $20 million in repairs and have long raised concerns with Puget Sound Energy (PSE), Avista Energy and PacifiCorp about escalating fuels costs at the plant. A wind farm paired with battery storage in Montana was recently approved at roughly half the price of Colstrip power.

The new fuel contract extends through 2025, the year by which PSE, Avista and Pacificorp must quit providing coal power to Washington customers under the terms of the state’s recently passed 100% clean electricity law. This provides a clear timeline for an orderly retirement of the plant that includes an economic transition plan for the community of Colstrip, clean energy replacement and a robust plan for cleaning up decades of pollution from leaking coal ash ponds. The Northern Plains Resource Council recently found that fully dewatering and excavating Colstrip’s coal ash ponds could double the number of clean up jobs in Colstrip for decades to come.

Mike Scott, Billings-based Senior Campaign Representative for the Sierra Club, provided the following statement:

“We can’t change the fact that burning coal is now one of the most expensive ways to produce electricity, but we can start planning now to make sure that coal workers have a path forward after Colstrip inevitably closes. Right now is the time for utilities and state leaders to plan for economic transition and a thorough clean up plan for Colstrip.”