HELENA — At a marathon hearing Wednesday evening, the bill meant to encourage NorthWestern Energy to acquire a larger share of the Colstrip 4 power plant came under withering criticism, as a “corporate bailout” that could fleece the company’s ratepayers.
Critics, including two public service commissioners, blasted Senate Bill 379 as a measure that would wipe out 100 years of rate-making policy for one asset – Colstrip – and dictate, in law, how NorthWestern gets to charge customers for its cost.
“Essentially what this bill does is say, `Hey, Legislature – we don’t want to go to the (Public Service Commission) and have this great deal approved by the commission,’” said Public Service Commissioner James Brown, R-Dillon. “No, it’s such a great deal that the Legislature needs to set the terms of the purchase.”
But nearly two-dozen witnesses – many from Colstrip, or with unions representing Colstrip workers – lined up to defend the bill and the continuing operation of the Colstrip plant in southeast Montana. They said consumers need the reliable and affordable power that the plant produces.
Sen. Steve Fitzpatrick, R-Great Falls, the sponsor of the bill, said the PSC’s own analysts had recalibrated their estimation of the cost of NorthWestern acquiring more power from Colstrip, setting it at as low as $4.67 per month per ratepayer.
“I think we’re getting a good deal, at less than $5 a month, for reliable energy from Colstrip,” he told the House Energy, Technology and Federal Relations Committee.
At the end of the three-hour hearing, Fitzpatrick also said none of the opponents had shown that NorthWestern has any less-expensive options to acquire power it will need to supply its 380,000 Montana customers, into the future.
“I think the only thing that’s cheaper is if you went down to the store and got some candles, and burned those,” he said. “Replacing Colstrip is not cheaper, building a wind farm is not cheaper, building a solar plant is not cheaper.”
The battle over SB379 and Colstrip has become one of the touchstones of the 2021 Legislature – much like a similar bill did two years ago, before finally dying in the House.
Defenders of coal-fired power say the aging plants, and their workers, need the Legislature’s help to fend off possible closure, as out-of-state partial owners plan to abandon their shares of Colstrip.
But opponents of SB379 and other pro-coal efforts say coal-fired power is falling out of market and political favor, and that attempts to prop it up benefit only NorthWestern Energy and the plant operators and employees.
SB379 made it through the Senate last week on a 27-21 vote, with all positive votes coming from Republicans.
Republicans have an even bigger majority in the House, but the bill’s fate there is far from assured.
Rep. Derek Skees, R-Kalispell and chairman of the House Energy Committee, said Wednesday it would take action on the bill next week.
NorthWestern Energy, the state’s largest electric utility, already owns 30 percent of Colstrip 4, purchased 12 years ago. The company has been saying for several years that it wants to acquire an additional share of the plant’s power from Puget Sound Energy or another co-owner, but has been unable to agree to terms or has not been satisfied with how that share might be folded into rates.
SB379 says if NorthWestern Energy seeks to acquire that share, the Public Service Commission would still have the power to approve or reject that acquisition.
But once that approval is granted, SB379 spells out in great detail how the PSC must incorporate the cost of that power into NorthWestern’s electric rates for its customers.
Brown, the public service commissioner, said that’s the main problem with the bill, as it severely restricts how the PSC would assess whether those costs should be allowed in rates.
“If we do say `yes,’ there is really no ability for the commission, in any way, to check the costs to the ratepayer,” he told the committee. “It’s either a yes or a no at the front, and then there’s a gun at the head, if we say yes.”
A new analysis by the PSC staff estimated that if NorthWestern acquires Puget Sound Energy’s 185-megawatt share of Colstrip, the cost to consumers would be anywhere from $238 million to $486 million over the next 21 years – or, $56 to $86 per year per customer.
Anne Hedges of the Montana Environmental Information Center, which opposes the bill, said that’s still taking millions of dollars a year out of communities all across Montana. In Billings, for example, it’s at least $2.8 million a year, she said.
NorthWestern Energy lobbyist David Hoffman said “everyone can agree” that the Colstrip plant is a “Montana asset,” and that all SB379 is doing is creating an opportunity for a Montana-based company to own a larger share and maintain the asset.
Sen. Duane Ankney, R-Colstrip, also said that opponents have created a “flood of misinformation” on the bill and its effects, and that it won’t lead to extraordinary costs being foisted on ratepayers.
“It creates a pathway for a utility like NorthWestern to acquire or lease an additional interest in a coal-fired generating unit in Colstrip,” he said. “The original owners will always own (their share of cleanup costs).”