Partial Closure in Colstrip

HELENA, Mont. (AP) — The company that operates a coal-fired power plant in eastern Montana said Tuesday it will close two of the plant’s four units about 30 months ahead of schedule because of the high cost of running them and the unwillingness of its coal supplier to lower prices.

Talen Montana said in a statement the older units of the Colstrip Steam Electric Station, whose combined 614-megawatt capacity is co-owned by Talen and Puget Sound Energy, will be permanently retired on Dec. 31. The newer Colstrip units, which generate the bulk of the 2,100-megawatt plant’s output and are owned by six companies, will continue operating although those whose livelihoods depend on the plant worry it also may be shuttered early.

The partial closure would be the latest among coal-fired plants going offline across the nation. Demand for coal is dropping as utilities turn to cheap natural gas and renewable energy, while pollution rules increase coal power costs and some states worried about climate change seek to divest from coal.

The older units had been slated for closure by mid-2022 as part of a settlement in an environmental lawsuit. The decision to retire the units early came after an extensive review and exhaustive efforts to make the units economically viable, Talen Montana President Dale Lebsack said.

“Fuel constitutes the bulk of our operating cost, and our repeated efforts to negotiate lower fuel prices with Westmoreland Rosebud Mining, the plant’s sole and only historically permitted fuel supplier, have been rebuffed.” Lebsack said in the statement. “Rather than working with us to keep Units 1 and 2 open, Westmoreland is proposing to increase the units’ fuel cost going forward.”

The adjacent Rosebud mine is owned by a subsidiary of Westmoreland Coal Co., which emerged from bankruptcy this spring as a private company owned by former creditors. A message left at the company’s headquarters in Englewood, Colorado, was not immediately returned on Tuesday.

Colstrip is the one of the largest coal plants west of the Mississippi River, and the small town of 2,300 where it’s located is dependent upon the plant for a large part of its economy. It has about 320 workers on site, according to Talen, and mining the coal provides more jobs.

The town has been bracing for the closure because of a legal settlement with conservation groups aimed at resolving a lawsuit over decades of pollution from the plant, but its residents had hoped to keep the units running at least until the June 2022 deadline mandated by the settlement.