Utility pledges $4.5M to Colstrip for transition – but says plant closures a ways off

Posted at 1:27 PM, May 17, 2018
and last updated 2018-05-17 15:27:01-04

HELENA – The head of a Spokane-based utility using power generated at coal-fired plants in Colstrip told state regulators Thursday the newer plants won’t shut down “any time soon,” and are still part of his company’s resource plan.

But Scott Morris of Avista Corp. also said he expects his company and other plant owners to help the southeastern Montana town transition to a post-coal future – and that’s one reason it has agreed to pay $4.5 million to the town of Colstrip.

“We’ve always worked really hard to be great corporate citizens,” he told the Montana Public Service Commission. “So, while this $4.5 million is a good start … I would suggest at the time of closure, there will be a very thoughtful process …. to make sure that the right thing is done for Colstrip, for the people, for the community, for the environment.”

Morris spoke at a hearing before the PSC on the proposed $5.3 billion sale of Avista to the Canadian power firm, Hydro One Limited. The payment to Colstrip is part of the proposed sale.

The Montana PSC and other utility commissions in states where Avista does business must approve the sale, before it can go forward. Avista has only a handful of customers in Montana; most of its business is in eastern Washington and northern Idaho. No one opposed the sale at Thursday’s hearing.

Much of Thursday’s hearing focused on Colstrip and the future of the town, as utilities in the region transition away from coal-fired power. The PSC will decide later whether to give its stamp of approval to the sale.

Avista, one of six corporate owners of the four Colstrip power plants, originally had pledged to pay Colstrip $3 million as part of the sale to Hydro One. The company and the city negotiated the additional $1.5 million.

Colstrip Mayor John Williams told MTN News Thursday that the city and its people will decide later how to spend the money, as part of a “very public process” that’s yet to be determined.

“We are a small town of 2,300 people and we’re all connected within the community to coal energy, either through the mining of coal or through the power of (power-plant) units 1, 2, 3 and 4,” he said. “But this is an opportunity for us to move into the future, to better prepare our community for whatever future lies before us.”

Williams said while no decisions have been made on how to spend the money, upgrading the town’s infrastructure is a possibility.

He also praised Avista for its willingness to talk about increasing the payment and the needs of the town.

“What they have done is given us the opportunity to sit down with one of the plant owners, face to face,” Williams said.

Morris said while Avista has placed an “end of useful life” date of 2027 for its share of Colstrip plants 3 and 4, for depreciation purposes, that doesn’t necessarily mean the plants will be shut down by that date.

“We don’t see Colstrip closing any time soon,” he said. “For our perspective, it’s a plant that still supplies very cost-effective power; it’s part of our integrated resource plan.”

Colstrip 1 and 2, which are older, smaller plants, are scheduled to shut down by 2022, as part of a court settlement with a pair of environmental groups.

Morris said any shutdown of the plants would have to be negotiated among the multiple owners and various regulatory agencies in different states where Colstrip power is consumed.

Puget Sound Energy of Bellevue, Wash., another utility owner of Colstrip, has pledged $10 million to help Colstrip transition to a post-coal economy.