In the past couple of weeks, two reports have been released that tell very different stories about Montana’s energy future. One is optimistic, solutions oriented, and comes after a broad collaborative effort, while the other was sponsored by industry and is unnecessarily pessimistic.
The first spells out Montana’s extraordinary opportunity to prosper in the inevitable transition to renewable energy. Released in late June by the Bonneville Power Administrator (BPA) and Gov. Steve Bullock, the Montana Renewables Development Action Plan resulted from an intensive six-month effort to overcome barriers to renewable resource development in Montana. The collaborative process involved 85 percent of the owners of Colstrip Units 3 and 4, all of the Colstrip transmission system owners, renewable resource developers, government agencies, conservation groups, and energy and transmission experts. I was honored to actively participate.
Among other important findings, the plan concluded the valuable Colstrip transmission system can continue to function reliably while transmitting substantial levels of renewable energy from Montana to Northwest markets. In other words, when the Colstrip power plant units are retired by their owners, the Colstrip transmission system can remain a superhighway for renewable resources, creating new jobs and tax revenue in the process.
This was among the most important and effective electricity planning projects in my 40-plus-year career. It squarely addressed the transmission and regional market barriers blocking the opportunity to develop our abundant renewable resources.
However, not everyone sees renewable energy as an opportunity. The other report, funded by the Montana Chamber of Commerce Foundation, paints a misleading doomsday view of the state’s economy. The entire report is undermined by two fatally flawed assumptions that drive the gross overstatement of economic impacts: (1) it considers the retirement of Colstrip Units 3 and 4 before 2043 as “early” or unjustified; and (2) it assumes the only energy resource that would replace the 1,500 megawatts from Colstrip units 3 and 4 would be a paltry 220 megawatt natural gas plant. Both assumptions are simply unrealistic.
A Reality Check on the Retirement of Colstrip Units 3 and 4
Colstrip 3 and 4 are 70 percent owned by four utilities serving Washington and Oregon, where customers are demanding less carbon pollution from their electricity and where they face in-state regulatory and legislative directives to transition away from coal-fired electricity between 2027-2030. On top of this, economic conditions, such as the rapid decline in the cost of renewable energy and natural gas, have placed serious competitive market pressure on coal. Additionally, the costs of mining and burning coal are rising as facilities age and environmental risks and liabilities mount. This complex mix of economic conditions is what drove the decisions to retire Colstrip Units 1 and 2 by mid-2022.
I deeply respect that uncertainty about coal jobs produces fear and anxiety in some Montana communities, and while it may be theoretically possible to operate Colstrip Units 3 and 4 for another 25 years, it would take significant investments in maintenance and upgrades. Meanwhile, Units 3 and 4 face the same economic pressures as Units 1 and 2, making the likelihood of their economic viability for 25 more years slim at best.
Ultimately, retirement decisions will be based on the Colstrip owners’ assessments of economic conditions and future expectations. Such decisions will not be “early” in any economic sense and it is misleading and counterproductive to assign blame or calculate distorted economic impacts.
The Path Forward
The Northwest represents the best market opportunity for Montana’s competitively priced renewable resources. Montana and Colstrip workers should aggressively seize upon the opportunity to develop these resources. The Colstrip area has significant strengths, including a highly skilled workforce and a transmission system that provides an economic lifeline to Northwest markets. Combined with jobs and economic activity for plant decommissioning and reclamation of the lands that have been impacted for decades, renewable resource development can provide valuable economic development and jobs.
Montana’s energy future is bright … if we seize upon it!
Tom Schneider served three terms as an elected member of the Montana Public Service Commission from 1977-1984 and 2003-2006. More information about the Montana Renewables Development Action Plan can be found at www.bit.ly/mtrenewables.