HELENA – Montana lawmakers began discussions Thursday on legislation that would require two owners of the Colstrip power plant, which faces a partial shutdown, to come up with a plan to compensate the surrounding community for its economic losses.
The compensation sought would likely be in the tens of millions of dollars, but officials said a specific amount would be unknown until the companies complete a decommissioning plan as required by Senate Bill 338.
“This is about the people who might have to leave Colstrip because of layoffs,” including workers who might find themselves stranded with mortgages they can no longer pay, said Sen. Duane Ankney, a Republican and retired coal mine superintendent who represents Colstrip.
Lawyers for the companies objected to what they called “exit fees” that could be devastating economically to the companies and have a chilling effect on industries doing business in Montana.
“In effect, the policy embodied in SB 338 is that the state condones punishing businesses for making a perfectly legitimate — and legal — business decision to stop operating,” said Tom Ebzery, a Billings attorney representing Puget Sound Energy, one of the plant owners.
The Senate Energy and Telecommunications Committee on Thursday held an initial round of hearings on bill, which has the support of the governor and the attorney general.
The proposal that was before a state Senate panel on Thursday is part of a package of bills meant to address concerns about the pending shutdown of the Colstrip plant’s two older units.
The two units are required to close by July 1, 2022, under a legal agreement between environmentalists and plant co-owners Talen Energy and Puget Sound Energy of Washington state.
Anne Hedges, the deputy director of Montana Environmental Information Center, expressed concern that the proposal would create an inhospitable business climate for clean-energy companies and other industries.
And it could leave Talen and Puget Sound Energy so economically hurt that they might not be able to meet their obligations to clean up the site and fund pensions for workers.
Another bill being considered by Montana lawmakers would offer low-interest loans of up to $10 million a year from the state’s $1 billion coal tax trust fund to help Talen. The company owns 50 percent of the two Colstrip power plant units slated for closure. The company has previously warned that the shutdown could come sooner if it does not receive tax relief or state assistance.
A Talen spokesman could not be immediately reached for comment.
Supporters of the decommissioning proposal said that requiring the companies to compensate workers and their community was the right thing to do.
“We support workers and their families. And we support just compensation. A lot of people put a lot of blood and sweat into working for these companies. In turn, these companies made a lot of money over the years,” said Sen. Cynthia Wolken of Missoula, who is the ranking Democrat on the committee.