HELENA, Mont. — Montana lawmakers advanced a bill package Friday that aims to blunt the economic impact of a coal-fired power plant’s planned partial closure by levying millions of dollars in fees and taxes against the plant’s owners.
The Energy and Telecommunications Interim Committee voted to send five bills to the 2017 Montana Legislature after a lengthy debate over whether the measures are actually meant to punish the out-of-state companies that own the two Colstrip power plant units slated to be shut down by 2022.
Colstrip is one of the largest coal-fired plants in the West and a major economic driver in southeastern Montana. Its future has been in question amid low coal prices, increasing federal regulations and lawsuits filed by environmental organizations.
A settlement in one of those lawsuits calls for the two older units owned by Washington’s Puget Sound Energy and Pennsylvania’s Talen Energy to shut down by July 2022. The plant’s two newer units, which are co-owned by those companies and four others, will continue operating.
The most contentious bill in the package would charge Puget Sound and Talen $3 million a year for the first five years after the shutdown, plus the full amount of property and licensing taxes they would have paid had the plant been operational. The owners would pay a decreasing percentage of those taxes for five more years.
Sen. Duane Ankney, R- Colstrip, who proposed the package, said the bill is not meant to punish Colstrip’s owners, but to ensure that workers and the community are treated fairly by the companies that promised permanent employment in Colstrip.
“You can bet if they shut Puget Sound Energy down, the executives of that company would leave that company with golden parachutes 10 times more than what this bill costs,” Ankney said. “This bill’s going to treat everybody equally.”
But Ankney and Sen. Cliff Larsen, D-Missoula, acknowledged bitter feelings after they traveled last winter to Olympia, Washington, and failed to gain support from lawmakers there to require Puget Sound Energy to keep the two older units running during a transition period.
“We thought the votes were there to give us a soft landing,” Larsen said. “We were misled, and this is a reaction to what we found over there.”
Puget Sound Energy attorney Thomas Ebzery said the legislation that Washington state lawmakers did pass allows the utility to put aside money to cover future Colstrip decommissioning and remediation costs.
The company opposes the Montana proposal to impose taxes and fees without a waiver if the aging units can’t meet federal or state regulatory standards, he said.
“An owner would continue to pay taxes for 10 years, as if it never left,” Ebzery said in a written comment to the committee.
One of the plaintiffs in the lawsuit that led to 2022 shutdown date, the Montana Environmental Information Center, urged the committee not to pass measures so harsh that companies would be discouraged from considering the state for future energy projects, such as solar and wind.
“If we start passing bills that are punitive, we’re not going to get future investment,” said MEIC deputy executive director Anne Hedges.
Her sentiments were echoed by a committee member, Rep. Christopher Pope, D-Bozeman.
“We have to roll out the welcome mat again, otherwise Colstrip will be a ghost town,” he said.
The five bills will be introduced when the Legislature convenes in January. Besides the fee proposal, another bill would double the wholesale energy tax on all power producers to pay for grants for local governments, school districts, economic development groups and to re-train workers.
A third bill would require Colstrip’s owners to submit a decommissioning and remediation plan that could be rejected or changed by the state.
A fourth bill would authorize state officials to participate in the Colstrip shutdown case that will go before Washington utility regulators in January, and the fifth would create a panel to help ensure fired workers receive their pension benefits.