NorthWestern says Colstrip pollution control upgrade could cost company hundreds of millions

This story is adapted from the MT Lowdown, a weekly newsletter digest containing original reporting and analysis published every Friday. It was originally published under the title “By the Numbers.”

The cost NorthWestern Energy said it would have to pay for new emissions-control equipment at the Colstrip power plant to comply with a rule the U.S. Environmental Protection Agency adopted earlier this year to reduce airborne heavy metals associated with power plant operations.

John Hines, NorthWestern’s Montana director of governmental affairs, presented that figure during a Sept. 10 meeting with the Montana Legislature’s interim energy committee while attempting to make an economic case for the utility’s plan to acquire an expanded share of Colstrip, Montana’s largest power plant.

Maintenance and operations costs for the nearly 40-year-old coal-fired power plant are shared between the plant’s six co-owners, five of which are utility companies that typically pass those costs onto their customers. It’s unclear if the $191 million figure for a new emissions-filtering baghouse Hines cited pertains to the current ownership structure or the revised ownership structure that goes into effect on Jan 1, 2026, when NorthWestern intends to acquire portions of the plant currently held by Avista and Puget Sound Energy, Washington-based utilities that are pulling out of the plant to comply with climate change-oriented laws in their state. 

Once executed, the ownership transfers will give NorthWestern a 55% ownership stake in the plant, meaning it will have to pick up a larger share of the plant’s maintenance and upgrade costs. Further complicating the calculation, two Oregon-based utilities with ownership stakes are barred from passing spendy plant upgrades onto their customers if those upgrades are intended to extend the plant’s life beyond 2025.

Plant operator Talen put the cost of a new baghouse at upwards of $600 million when it commented on the EPA’s (then proposed) rule in 2023. 

Asked in an email for more detail regarding NorthWestern’s share of the upgrade, spokesperson Jo Dee Black demurred, saying only that the timing of the investment will determine how much NorthWestern will be expected to pay. The company will continue to move forward with the upgrade “as long as the Colstrip plant is economical for our Montana customers,” she wrote, adding that any upgrades will be subject to an approval process that’s outlined in the owners’ long-standing operating agreement.

Hines noted in remarks before lawmakers that Colstrip’s owners are up against a ticking clock to work out whether they’ll invest in a baghouse. The owners have to start making moves toward the investment within one-and-a-half years to comply with the EPA’s new emissions rule, Hines told lawmakers. 

Meanwhile, the state of Montana, NorthWestern and Westmoreland, the owner of the mine that supplies the Colstrip plant with coal, have launched an ongoing challenge to the legality of the EPA’s emissions standards.