Viewpoint: NW giving Montanans expensive coal this holiday season
Nick Fitzmaurice
On January 1, NorthWestern Energy will increase its ownership of the Colstrip power plant from 15% to 55%. CEO Brian Bird’s recent op-ed attempted to justify this maneuver, citing a “responsibility … to provide reliable, cost-effective energy service.” But once again NorthWestern’s intentions lie in maximizing profits – and its claims don’t add up.
If NorthWestern wants reliable energy, it should reject a 40-year-old plant that doesn’t work on some of the hottest and coldest days of the year. And if NorthWestern wants affordable energy, why would it look to an expensive plant in need of major investments? Come January 1, NorthWestern’s annual share of the Colstrip plant’s fuel, operations, and maintenance costs (excluding future overhauls and remaining costs to pay off the plant) will be upwards of $200 million. That’s two-thirds of the price tag for NorthWestern’s new gas plant in Laurel. Puget Sound Energy and Avista Energy are giving up their shares at $0 face value because it's a smoldering hot potato that costs more to run than it’s worth.
Bird claims that electricity on the market is unaffordable, but buying and selling electricity on the market can provide tremendous affordability and reliability benefits in a regionally-connected electric grid. The issue is that Montana’s currently constrained transmission system increases costs for bringing energy into Montana during high-demand periods.
When temperatures plummeted in January 2024 and one of the Colstrip units was offline, Montanans faced market prices nearing $1,000 per megawatt-hour (MWh). However, prices were closer to $200 per MWh in Idaho, thanks to grid connection to robust solar generation in the Southwest. Without access to electricity markets, Montanans might have lost power completely. Improved transmission connectivity between Montana and other states could alleviate these price spikes and boost grid resilience in future extreme conditions.
Since 2008, NorthWestern has been making money hand-over-fist from ratepayers for the Colstrip plant. It wants to keep that cash cow producing through its 2042 book life. Bird claims that when the wind isn’t blowing and the sun isn’t shining, the Colstrip plant is there. But he neglects to mention that, even when the plant is operational (which it frequently is not), short- and long-duration energy storage, combined with increased transmission infrastructure, can reliably meet Montanans’ electricity needs at much lower costs than the Colstrip plant.
A 2023 report showed that “99 percent of existing U.S. coal plants [including Colstrip] are more expensive to run than replacement by local wind, solar, and energy storage resources,” while a study earlier this year showed that wind, solar, and energy storage could reliably replace the Colstrip plant while saving ratepayers $500 million to $1.17 billion.
NorthWestern knows that the Colstrip plant is expensive and admits that it only pursued its latest acquisition to secure a majority ownership stake to keep the plant open. Now, the utility is scrambling to find customers to buy its enormous amount of excess electricity and justify the exorbitant costs of continuing to operate the plant.
It’s no wonder that NorthWestern is looking to sell Montana’s soul to power-hungry data centers while expecting ratepayers to foot the bill. How NorthWestern will pay for its expensive new shares of the Colstrip plant remains undetermined, but it’s already pursuing unprecedented mechanisms at the expense of ratepayers – on top of its 28% electricity rate increase in 2023 and recent approval for yet another increase.
All the while NorthWestern continues grasping at its misleading and increasingly inaccurate claims that its portfolio is predominately carbon-free. NorthWestern can’t take credit for building most of its carbon-free resources, and it’s allowing its low-cost renewable energy contracts to expire. Accounting for its new gas plant in Laurel and 592 megawatts of additional Colstrip shares in its carbon-intensity assessments will paint a much different picture.
Despite Bird’s feel-good op-ed, the numbers don’t add up. While NorthWestern’s executives likely enjoy hefty holiday bonuses, Montanans are getting rising energy bills with no relief in sight. NorthWestern is once again failing to plan for a least-cost electricity portfolio, and it’s critical that Montanans turn out to its public meetings in January and February to hold NorthWestern to this obligation. In the meantime, NorthWestern is leaving expensive coal in Montanans’ stockings this holiday season.
Nick Fitzmaurice is the Energy Transition Engineer for the Montana Environmental Information Center.