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A Montana Senate bill slated for a committee vote would deter future investment in Montana's underutilized renewable energy resources. Senate Bill 338, introduced by Sen. Duane Ankney (R - Colstrip) would force Puget Sound Energy and Talen Energy, the co-owners of Colstrip Generation Station's Units 1 and 2, to pay tens of millions of dollars to compensate for the impending closure of the units.
The bill forces the utilities to pay for lost residential and commercial property values, all outstanding local bonds, all potential impacts to schools, and all lost revenues to the state, city and county, but includes no money for the extensive cleanup costs at the site, which have been estimated at almost $200 million for just units 1 and 2.
It could also hinder any future energy investment in Colstrip and the rest of Montana. PSE, which recently secured authority from the Washington State Legislature to set aside money for Colstrip transition, is in the midst of a long-term planning process that will determine how they replace their retiring Colstrip coal.
A PSE representative testified during a March 16 committee hearing that this bill could deter future long-term investments in Montana energy, including the wind power which has seen tepid investment despite the state having the second most wind potential in the United States.
"This is a dreadful precedent and if I am any natural resource business, or even non-natural resource business, I would be fearful that this or punitive legislation to "pay to leave" can be imposed on me," said Tom Ebzery, an attorney representing PSE, as well as Avista and Portland General Electric, which make up 35 percent of the ownership of Units 3 and 4.
"At the same time a punitive measure such as this bill moves through the legislature, we are hearing requests for the same companies to consider Montana for commitment to renewable resources. This is not the message you want to send these companies."
Talen Energy has indicated during legislative hearings that it is losing $30 million a year operating the plant and is asking for up to $10 million a year in low-interest loans from the state to keep operating Units 1 and 2 until the agreed upon 2022 retirement date.
A Talen lobbyist indicated during a March 16 committee hearing that the bill is "like being smacked on the nose by a 2 by 4" and that it "doesn't want to make us stay [in Montana]." Talen, which has yet to set aside any money for cleanup or transition, is also 30 percent owner of Unit 3.
The bill has also drawn opposition from business groups in Montana, including the Montana Taxpayers Association, Montana Chamber of Commerce, arguing penalizing companies for making market-based economic decisions creates an anti-business environment in the state.
Mike Scott, lead organizer for the Sierra Club in Montana released the following statement, "It's important that Colstrip residents are provided for as Montana responds to this generational shift in energy markets.
But this bill looks backwards, not forwards. Nothing is more important to the future of Colstrip than taking advantage of its location on a major energy transmission corridor and providing the clean, renewable energy that West Coast consumers are demanding. Why would utilities ever make those kinds of decades-long investments when they know they'll be penalized when market conditions change?"
Anne Hedges, Deputy Director of the Montana Environmental Information Center released the following statement, "This bill is cutting off our nose to spite our face. Talen Energy is teetering on the edge of bankruptcy.
"Pushing them into it and scaring the hell out of every other utility in Colstrip ensures we get nothing - no replacement jobs, no secure pensions for current workers, and not a cent from Talen for cleaning up the leaking coal ash ponds that are poisoning Colstrip's aquifer. Transition should be about securing a stable future for Colstrip, not trying to exact revenge."
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