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Colstrip owners worry that Westmoreland bankruptcy could accelerate coal plant closure

Posted: 9:09 PM, Jan 29, 2019
Updated: 2019-07-17 14:50:18-04

COLSTRIP- The potential shutdown of the Colstrip power plant could be accelerated if a Texas bankruptcy judge allows Westmoreland Coal to end its supply contract from the nearby mine, according to the plant owners.

In a court filing last week, NorthWestern Energy urged the judge to reject a proposal from Westmoreland debtors to end a 40-year-old sales contract between the plant and its Rosebud mine.

Such an action could force the closure of the Colstrip units 3 and 4 by the end of this year, nearly seven years sooner than originally feared. Another owner, Puget Sound Energy, had pegged the end of the useful life of the two units at 2027, though no official date had been set.

Westmoreland is currently moving forward with a massive, $1.4 billion bankruptcy, and its dozens of debtors are seeking to recoup portions of the money they’re owed.

The owners of the power plants contended that ending the sales contract would increase energy costs for consumers and hurt the bottom line for both the mine and the power plant.

Colstrip’s units 3 and 4 are jointly owned by NorthWestern, Puget Sound, Avista Corp., Portland General Electric and Pacificorp and Talen Energy. Talen operates the plant.

“It is a strategy that has threatened the continuing short-term and long-term operation of the Colstrip Plant, and has also put hundreds of employees (both at the Colstrip Plant and the Rosebud Mine) and the town of Colstrip at risk,” Talen attorneys wrote.

Talen and Northwestern each filed individual objections to ending the sales contract with Rosebud. The other utilities jointly filed a separate objection.

Mike Scott, the Bilings field organizer for the Sierra Club’s Beyond Coal campaign, said the fight over the contract shows the tough environment for coal, which has struggled in recent years with shrinking demand and low natural gas prices.

And while the Sierra Club has advocated for exiting coal power, Scott said a sudden closure for Colstrip would hurt the community and its workers.

“We want to see an orderly transition. We don’t want the rug pulled out from anybody overnight” Scott said.

The Colstrip power plant, which includes its older 1 and 2 units, employs 360 workers. It generates 2,000 megawatts of power and sells all the way to the Pacific Northwest.

Westmoreland owns three Montana mines: the Rosebud mine at Colstrip, a part of the Absaloka Mine near Hardin and the Savage Mine at the Montana/North Dakota border.