More of the coal-fired Colstrip plant could be transferred to NorthWestern Energy for a purchase price of $1 if a controversial bill passes the Montana Legislature. Credit: Alexis Bonogofsky

HELENA — A contentious bill that would have authorized the partial purchase of Montana’s largest coal-fired power plant for $1 bit the dust Wednesday morning. A replacement bill is now in the works.

A lawmaker trying to secure the Colstrip plant’s future brought Senate Bill 278 with NorthWestern Energy in mind. The bill would have allowed the utility to acquire additional ownership of the plant for no more than a dollar. It would have also curbed the Public Service Commission’s ability to review whether NorthWestern could pass on its Colstrip costs to ratepayers. Sen. Tom Richmond, R-Billings, sponsored the bill. At a hearing in the Senate Finance and Claims Committee, he asked lawmakers to table it.

Richmond said he heard numerous concerns from constituents and fellow lawmakers after introducing SB 278 last month.

“Past the personal attacks, I think that there’s some good criticism of the bill,” Richmond said at the hearing. “This bill was frankly a little bit more open-ended than it needed to be.”

• RELATED: BILL TO GIVE NORTHWESTERN ENERGY MORE POWER OVER COLSTRIP RAPIDLY ADVANCING IN THE LEGISLATURE

The committee voted to table the bill without discussion.

A replacement draft bill requested by Richmond has since emerged.

Called the Montana Energy Security Act of 2019, the draft bill still allows a co-owner of Colstrip to sell its power-generation interests to another utility for $1.

Like SB 278, the draft bill would require ratepayers to cover a utility’s investments and clean-up costs at a coal-fired plant, even if the plant closes early. Those costs would be rolled into customers’ rates for up to 30 years. The new draft also stifles the PSC’s ability to review such costs, and a utility like NorthWestern wouldn’t have to purchase additional generation at Colstrip to benefit from scaled-back regulatory oversight.

The draft bill does, however, include more limitations than SB 278.

The draft Montana Energy Security Act specifies that if a Colstrip owner transfers its generation to NorthWestern, the transferring utility is still on the hook for any environmental remediation or decommissioning costs associated with its share of the plant’s operation.  

NorthWestern would be able to acquire only 150 additional megawatts of generation capacity for $1, and any transfer would have to happen no later than Dec. 31, 2021. The draft bill caps the transfer-related costs a utility can pass on to ratepayers at $40 million. Any expenses beyond that would be subject to PSC review.

“It keeps the concept of the bargain. It keeps the concept that there are regulated utilities outside of Montana who would like to leave coal-fired generation behind,” Richmond said.

• RELATED: As details emerge about Colstrip bill, lawmakers discuss benefits of selling plant to NorthWestern for $1

NorthWestern currently owns 30 percent of Colstrip’s Unit 4. The remaining 70 percent is held by Puget Sound Energy and Avista Corp., both based in Washington, as well as Portland General Electric and PacifiCorp, both based in Oregon.

Oregon and Washington are phasing out coal power sources over the next decade, leaving the future of Colstrip in limbo.

Meanwhile, units 1 and 2 of the plant must be retired by 2022 due to an agreement reached after environmental groups filed a lawsuit under the Clean Air Act.

The preamble of Richmond’s draft bill states that “baseload coal-fired electrical generating resources are important to Montana and Montana customers,” and that securing future operation of Colstrip “requires a clear expression of certain electric utility ratemaking principles.”

“I didn’t want to leave people with the impression that it was my intention to raise anybody’s rates,” Richmond said of his previous bill. “It was my intention to lower people’s electricity rates and provide reliable power. “

Numerous groups came out in opposition to SB 278, including Montana Consumer Counsel, the Northwestern Energy Coalition, and the Montana Environmental Information Center.

Despite its added sideboards, MEIC lead lobbyist Anne Hedges said she still opposes Richmond’s new draft bill.

“They are cutting the Public Service Commission out in all sorts of ways so consumers won’t be protected,” she said. “That is the flaw in this bill. It is not much of an improvement.”

Hedges said she’s especially concerned about Montana ratepayers being on the hook for a bigger share of future cleanup of Colstrip’s coal ash pond. Those costs are currently pegged at $700 million, and it will be difficult to determine which pollution was caused before a utility transferred its ownership to NorthWestern.

“There’s no way you can differentiate a ton of contamination that goes in tomorrow from contamination that went in yesterday,” Hedges said.

She also expressed concerns about ratepayers covering the cost of coal over three decades, even if coal-fired power becomes uneconomical in the meantime.

“Do I agree Montana needs coal for a while longer? Yes, I do. Do we need coal for 30 years? Absolutely not,” Hedges said.

As of Wednesday afternoon, Richmond had yet to introduce his new bill.

Leia is an award-winning journalist who has covered the environment and public policy in Colorado, Utah, and Montana. She has a master's degree in journalism from the University of Colorado Boulder.