Colstrip Units 1 and 2 Will Shut Down by 2022

Talen Energy and Puget Sound Energy (PSE), owners of Units 1 and 2 at the Colstrip Power Plant in Montana, have reached an agreement to shut those units down no later than July 2022.

The settlement came as a result of a lawsuit brought by the Montana Environmental Information Center and the Sierra Club in 2013 alleging violations of the Clean Air Act at Colstrip. Units 1 and 2 are the oldest at the four-unit plant, having come online in 1975 and 1976.

Units 1 and 2 at the Colstrip Power Plant in Montana will shut down in 2022 as the result of a settlement between the units' owners and environmental groups. Courtesy: Puget Sound Energy

"Our customers expect PSE to be good stewards of the environment and to keep energy costs reasonable," said Kimberly Harris, PSE's president and CEO in a statement. "The eventual closure of Units 1 and 2 at Colstrip without the risk of further legal proceedings or additional significant investments in the units to meet regulatory requirements enables us to accomplish both of these goals."

"This agreement provides the certainty we need to begin creating a plan to tap Montana's abundant wind energy and continue supplying electricity to West Coast markets," said Anne Hedges, of the Montana Environmental Information Center in a statement. "Those markets are demanding cleaner energy and we have the ability to provide them with a 21st Century energy source. If we can't do that, Montana will lose an important opportunity to modernize and diversify its energy system."

Colstrip Units 3 and 4 to Continue Operating

The settlement does not affect operations at Units 3 and 4, which are newer and larger (at 740 MW vs. 304 MW) than Units 1 and 2, which lack the most modern pollution controls. Units 3 and 4 are co-owned by Talen, PSE, Washington utility Avista Corp., Oregon utilities Portland General Electric and PacifiCorp, and South Dakota utility NorthWestern Energy.

Talen, which operates Colstrip, is in the process of exiting the Montana market, though it has not yet publicly announced plans for its ownership share. It told its partners in May that it is withdrawing from its role as operator by May 2018. No replacement operator has been identified.

Political Fallout

The plant has been battered by competition from cheaper gas-fired power and renewable generation in the area, as well as legislation in Oregon and Washington that disfavors coal-fired electricity, facts noted by the parties to the settlement.

"This agreement provides certainty for addressing grievous pollution issues and gives the two units six years to go offline, although the market may prove less tolerant of that length of time," Harris said.

Colstrip is a major employer in the area and supports operations at a nearby coal mine. Its continued operation has been a major political issue in Montana, in part because all of its owners are located out of state.

PSE expressed its desire to continue operations at the remaining units.

"We know this will be a time of transition in Colstrip," Harris said. "We have been a part of the community for four decades, and we will continue to be there for many years to come."

-Thomas W. Overton, JD is a POWER associate editor (@thomas_overton, @POWERmagazine).

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