Group Urges State to Protect Itself Against Colstrip Costs

Bonding would cover costs of shutting down and cleaning units of the Colstrip power plant

By MATT VOLZ, Associated Press

HELENA — An environmental organization urged Montana officials Wednesday to protect the state financially and ensure that a co-owner of a coal-fired power plant slated for partial closure pays its share of cleanup and decommissioning costs.

Montana Environmental Information Center deputy director Anne Hedges asked Gov. Steve Bullock and other state officials to impose bonding on Talen Energy that would cover the actual costs of shutting down and cleaning two of the four units of the Colstrip power plant.

Hedges told Bullock, Attorney General Tim Fox and Montana Department of Environmental Quality Director Tom Livers in her letter that her organization is worried Talen could declare bankruptcy and leave state taxpayers with the cost of cleaning up the site.

“Montanans have seen companies avoid cleanup obligations in the past using this method,” Hedges wrote. “We should learn from past mistakes.”

Talen officials have not publicly discussed a potential bankruptcy. Company spokesman Todd Martin did not return a call for comment.

However, the company is seeking tax relief from state lawmakers this session and a Talen lobbyist has warned that the closure could come as early as this year if the units don’t become “economical.”

“Talen is losing tens of millions of dollars a year,” lobbyist John Metropoulos told a legislative committee in January. “It cannot continue to do that and it will not.”

The two 1970s-era Colstrip units are slated to close by mid-2022 as part of a legal settlement and will put about 200 people out of work.

Coal-fired power plants across the nation have come under increasing pressure amid decreasing demand, increasing regulations and lawsuits against their emissions. Last month, the owners of another plant in Arizona announced they would close the Navajo Generating Station in 2019.

Talen is one of six co-owners of the entire Colstrip plant, and one of two owners of the two units that are slated to close. The company is also the operator of the plant, though it has given notice to the other co-owners that it wants to exit that role by mid-2018.

The company was bought last year by a private equity firm called Riverstone Holdings.

The state now holds a surety bond on Talen for $7.5 million for Colstrip cleanup costs, according to DEQ spokeswoman Jeni Flatow.

But the total cleanup and decommissioning costs when the units shut down could be between $158 million and $200 million, according to January testimony by Ronald Roberts, an executive for another Colstrip co-owner, Puget Sound Energy.

Talen must submit a full-facility closure plan with cost estimates to the state by July 30 and provide financial assurance for those costs, Flatow said. Hedges responded that those closure costs are not the same as the cleanup and remediation costs.

The agency is also looking at its legal authority to see what else it can do to ensure that public money is not used to cover the cleanup, Flatow added.

Bullock’s spokeswoman Ronja Abel said in a statement that Talen has discussed its financial difficulties for years and that the state would work to find a solution that protects the Colstrip workers and economy.

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