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By MATT VOLZ and MATTHEW BROWN Associated Press
Helen, Mt. – The company that operates a coal-fired power plant in eastern Montana announced Tuesday that two of the plant's four units will be shut down about 30 months ahead of schedule, due to the high cost of their operation and reluctance to its coal supplier to lower prices.
Talen Montana said in a statement that the former units of the Colstrip Steam Power Plant, with a combined capacity of 614 megawatts owned jointly by Talen and Puget Sound Energy, will be permanently decommissioned on December 31. Colstrip's new units, which generate the largest portion of the plant's 2,100-megawatt production, are owned by six companies, including the two largest electricity companies in Oregon, Portland General. Electric and PacifiCorp. They will continue to operate although those whose livelihoods depend on the plant are concerned about the closure of the plant.
The partial closure would be the latest among offline coal plants across the country. Coal demand is down as utilities turn to natural gas and renewables, while pollution rules increase coal costs and some states concerned about climate change are looking to disengage from coal .
Under the legislation enacted in 2016, PGE and PacifiCorp are required to stop charging charcoal to Oregon taxpayers for coal by 2035 and 2030, respectively. At the same time, Washington will require PacifiCorp to remove coal from customer rates by 2025.
PGE plans to close its coal plant at Boardman by the end of 2021, leaving its 20% stake in the two new Colstrip units as its only coal-fired power outside of the wholesale market. PacifiCorp is still dependent on coal power to meet 60% of its customers' electricity demand, but it is increasingly in a hurry to close a number of its 22 coal-fired plants earlier, for economic and environmental reasons. environmental. The utility plans to release a draft of its new resource plan next week, indicating possible units it plans to close earlier.
PacifiCorp owns 10% of the new Colstrip plants. A recent analysis by the public service shows that the withdrawal of the two new Colstrip units in 2022 would essentially be a balanced proposal for taxpayers.
Colstrip's oldest units were to be closed by mid-2022 as part of a settlement of the environmental dispute. The decision to retire the units prematurely came after a thorough review and comprehensive efforts to make the units economically viable, said Talen Montana President Dale Lebsack.
"Fuel is at the core of our operating costs, and our repeated efforts to negotiate lower fuel prices with Westmoreland Rosebud Mining, the only and only fuel supplier of the plant, have been repulsed. " Lebsack said in the statement. "Rather than working with us to keep Units 1 and 2 open, Westmoreland is proposing to increase the fuel cost of these units."
The adjacent Rosebud mine is owned by a subsidiary of Westmoreland Coal Co., coming out of bankruptcy this spring as a private company owned by former creditors. A message left at the company's headquarters in Englewood, Colorado, was not immediately returned Tuesday.
Colstrip is one of the largest coal-fired plants west of the Mississippi River and its small town of 2,300 is dependent on the plant for much of its economy. It employs about 320 people on the site, according to Talen, and coal mining generates more jobs.
The city was preparing for closure due to a legal agreement reached with nature conservation groups to resolve a pollution dispute for decades, but its residents had hoped the units would operate at least as far as possible. At the June 2022 deadline set by the Regulation. .
Colstrip Mayor John Williams said he hoped Talen and Westmoreland could still reach an agreement, but he was uncertain that it was not too late for Talen to change course.
"We have worked hard to encourage other entities to come to Colstrip, to diversify our economy, but for the moment, we have not succeeded," Williams said.
Republican Senator Duane Ankney, whose district includes Colstrip, said Tuesday's announcement did not appear to be a trading ploy.
"They are bleeding millions of dollars," said Ankney. "I could be wrong, but if I had to make a bet, I would say that it's not a tactic, that's what's going to happen."
Talen spokeswoman, Taryne Williams, said the company "was ensuring that units 3 and 4 remain economically viable" and that she is always ready to work with Westmoreland on a supply contract. coal for these two plants, but not both.
Anne Hedges, deputy director of the Montana Environmental Information Center, one of the plaintiffs in the lawsuit against Colstrip, said the early closure was a reflection of market developments faster than expected.
"This is a reminder to Montana: pay attention, follow the program and determine how we will develop the energy sources that the rest of the world wants to buy and that are affordable," she said.
For years, Talen, based in Pennsylvania, says the plant is not economically viable. Company officials said in 2017 that they were losing about $ 30 million a year. State legislators have made several efforts to support the plant, including adopting a measure allowing the company to borrow up to $ 10 million a year from the state and waiving a bill allowing NorthWestern Energy to buy back for $ 1 from other Colstrip owners.
The residents of Colstrip are also concerned about the closure of the plant's newest units a few years later, while the other owners of the plant in Washington and Oregon are looking to remove coal from their own energy portfolio. .
Talen's coal contract with Westmoreland is in effect at the end of the year and Talen executives are looking for a "competitive offer" from the mining company, Williams said.
Ankney said the news of the partial closure should prompt leaders to redouble efforts to keep the rest of Colstrip in business. State lawmakers will not meet until 2021, and Ankney said that in the meantime, he and others will consider proposals.
– Oregonian / OregonLive's personal writer, Ted Sickinger, contributed to this story.
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