In a Surprise Announcement, Colstrip Units 1 and 2 to Close by Year-End

Talen Montana—part-owner and operator of the Colstrip Steam Electric Station—announced that Units 1 and 2 at the coal-fired power plant will be retired by year-end, well ahead of a previously announced July 2022 closure date.

“The decision to retire Colstrip Units 1 and 2 comes after extensive review and exhaustive efforts over the last few years to address the financial challenges that these units face,” Talen Montana President Dale Lebsack said in a June 11 press release. “The plant team has done a great job of responding to the challenges faced by Units 1 and 2, but we have been unsuccessful in making the units economically viable. Fuel constitutes the bulk of our operating cost, and our repeated efforts to negotiate lower fuel prices with Westmoreland Rosebud Mining, the plant’s sole and only historically permitted fuel supplier, have been rebuffed. Rather than working with us to keep Units 1 and 2 open, Westmoreland is proposing to increase the units’ fuel cost going forward.”

Talen Montana owns 50% of Colstrip Units 1 and 2, with Puget Sound Energy (PSE) owning the other half of the units.

“Our customers want a better energy future,” Ron Roberts, PSE’s director of Generation and Natural Gas Storage, said in a statement. “Helping our state transition from coal, along with the billons we’ve invested in renewable energy, is helping make that vision a reality. At the same time, our obligation is to provide customers with the lowest cost energy available. We’ve consistently talked about how the economics of coal may be the primary driver of plant closures, as is the case with Units 1&2.”

The Colstrip power plant, located in southeastern Montana, operates four units. Units 1 and 2—307 MW each—began commercial operation in 1975 and 1976, and Units 3 and 4—740 MW each—started in 1984 and 1986. Units 3 and 4 are owned to varying degrees by Talen Energy, PSE, Portland General Electric Co., Avista Corp., PacifiCorp, and NorthWestern Energy. No shut down date is set for the newer units. However, Washington state’s recently passed 100% clean electricity law mandates that coal be removed from utility power supplies by the end of 2025, so a change in ownership or closure are likely by then.

In an interview with Montana Public Radio (MTPR), state Sen. Duane Ankney, a retired coal miner from Colstrip, said, “I don’t think they was really ready for it. You’re never ready for something like this, but that being said, I think they’re very resilient in Colstrip, and I think they’ll continue to be a very strong community.”

However, Ankney lamented the effect the closure would have on residents’ property values. “That’s where it really hurts me that those people have invested the kind of money they have in homes and stuff in Colstrip, and in the short term—and maybe in the long term, but I think it’s in the short term—their houses ain’t worth nothing really, or a very reduced [value].”

PSE’s Roberts added, “We’ve also been steadfast in our commitment to the community of Colstrip, as reflected in the $10 million we’ve given them for community transition planning. The community has been our partner for decades, and not just the men and women who work at the plant, but their families, friends and neighbors too. We are invested in their future success.”

Talen Montana said it will work closely with all stakeholders to ensure the retirement process is orderly and minimizes the effect on employees, community members, and other key stakeholders. The plant employs about 320 people. Talen Montana said it will look to redeploy affected Colstrip employees to work on Unit 1 and 2 retirement activities or the operation and maintenance of Units 3 and 4.

Jeff Fox, Montana policy manager with the advocacy group Renewable Northwest, told MTPR the large electric lines running from Colstrip to the West Coast could be used to export wind energy instead. “There are wind energy projects around Colstrip now—ready to develop—that have been identified by West Coast utilities as a good resource for their customers,” Fox said.

Meanwhile, Talen Montana said it continues to work with the Montana Department of Environmental Quality to address groundwater impacts at the Colstrip site as required by the 2012 Administrative Order on Consent and is complying with all other applicable laws and regulations related to site remediation. The owners intend to fulfill those existing commitments to the State of Montana after Colstrip Units 1 and 2 are retired, Talen Energy confirmed.

Aaron Larson is POWER’s executive editor (@AaronL_Power, @POWERmagazine).

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