Montana PSC approves sales that includes $4.5M for town of Colstrip

Posted at 3:25 PM, Jun 12, 2018
and last updated 2018-06-12 17:25:30-04

Montana’s utility regulators Tuesday voted to approve the proposed sale of Avista Corp. to a Canadian power company – a deal that includes a $4.5 million payment to the city of Colstrip.

The Montana Public Service Commission voted 4-1 to endorse the sale, which also needs the approval of utility commissions in the states where Spokane-based Avista operates, as well as federal agencies.

Hydro One Limited, a Canadian power firm, is paying $5.3 billion to buy Avista, an electric-and-gas utility that has customers in Washington, Idaho, Oregon, Alaska and Montana.

While Avista has only a handful of customers in Montana, it’s also part-owner of Colstrip 3 and 4, two coal-fired power plants in southeast Montana.

Last month, Avista CEO Scott Morris told the Montana PSC that the Colstrip plants won’t shut down “any time soon” and are still part of the company’s long-term resource plan for electricity supply.

But he also said Avista and other owners of the four Colstrip power plants will help Colstrip transition to a post-coal future, and that the $4.5 million payment is part of that effort.

Montana commissioners Tuesday said they’re concerned that the deal with Hydro One includes an accelerated depreciation schedule for Colstrip plants 3 and 4, with an end-of-useful life date of 2027.

However, they said the sale appears to be in the public interest, for Montana consumers and the state.

The only commissioner voting against the approval was Tony O’Donnell, R-Billings, whose district includes Colstrip.

“On the one hand, there’s the funding for Colstrip’s community transition fund,” he said. “But on the other hand, I didn’t hear enough assurance that the Canadian government can’t interfere to shorten the length of (the) Colstrip power plant’s operational life.”

Morris said last month that while Avista 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.

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.

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.

Last month, Colstrip Mayor John Williams told MTN News that the city and its people will decide how to spend the $4.5 million, as part of a “very public process” yet to be determined.