HELENA — As it seeks to purchase an expanded share in Unit 4 of the Colstrip coal power plant, Montana utility NorthWestern Energy has some competition, it said Friday: plant operator Talen Energy.
In a release, NorthWestern said it had informed the Montana Public Service Commission that Talen intends to exercise a right of first refusal on as much as half of the 185-megawatt stake in Colstrip Unit 4 that NorthWestern previously said it plans to buy from Washington-based Puget Sound Energy.
NorthWestern’s planned acquisition, announced in December with a $1 purchase price but still subject to regulatory approval by the PSC, has attracted criticism from environmental groups who want the company to shift away from fossil fuels and worry that a coal acquisition could ultimately saddle Montana ratepayers with the bill for an obsolete power plant. NorthWestern has said the additional coal stake will help it keep its Montana’s energy grid reliably supplied as other utilities in the Pacific Northwest shift away from aging coal plants toward carbon-free sources.
NorthWestern’s announcement expresses frustration that the independent power producer is injecting itself in a deal already negotiated between NorthWestern and Puget Sound, but touts Talen’s interest as evidence the Colstrip acquisition is in fact a good deal for its ratepayers.
“The benefits for NorthWestern Energy and its customers are still very compelling,” the company said.
Proceedings where Montana’s elected public service commissioners will decide whether to approve NorthWestern’s purchase proposal are pending. The company says it will file supplemental materials to account for Talen’s interest in the plant by the end of April.
“This development does not change the general structure of NorthWestern Energy’s proposal and we expect the Montana Public Service Commission to proceed with the application docket schedule,” the company said.
The aging Colstrip coal power plant, located east of Billings in the town of Colstrip, consists of four generating units, two of which were shut down at the beginning of the year. Ownership of the plant’s third and fourth generating units, each with 778 megawatts of capacity, is split between several partners, complicating questions about how long those units will remain in operation.
NorthWestern, the South Dakota-based company that serves as Montana’s primary power utility, has owned a 30% stake in Colstrip Unit 4 since 2007. Puget Sound Energy’s Unit 4 stake is currently 25%, with other minority stakes owned by Portland General Electric, Avista and PacifiCorp.