In the end, the 2019 Montana Legislature’s major Colstrip plan was a stalled solution that couldn’t catch a ride.
Lawmakers ended the 87-day session Thursday afternoon with amendments drawn up to commit customers of NorthWestern Energy to covering debts associated with the utility’s potential purchase of Colstrip Power Plant generation and transmission lines.
Billed as a way to keep Colstrip Power Plant operating as the coal-fired generator’s other utility owners left, the proposal failed to pass both chambers of the Legislature. Afterward, Republican leaders lamented the loss.
“The Senate saw the merit of it and we pursued it. We did it in a transparent fashion. We heard from people that they had some concerns about the bill and we modified it on its way over to the House,” said Scott Sales, senate president. “It’s a huge issue. I don’t think it’s going to go away. We need to pay attention to it and hopefully future generations, at least in the next legislature, it will get the attention it deserves.”
House lawmakers killed the proposal, embodied in Senate Bill 331, on a strong bipartisan vote April 16, after which the bill’s sponsors, Republican Sens. Tom Richmond, of Billings, and Duane Ankney, of Colstrip, drafted amendments to be added to two surviving energy bills. But neither of those bills were ever amended. One potential vessel for the Colstrip bill died awaiting action in conference committee. House Bill 22, which dealt with energy contracts, needed a committee upgrade to accommodate a Colstrip overhaul.
“I attribute it to kind of an agreement across the aisle that this is not the right thing to do and that came from the progressive Democrats and the hard right,” said Rep. Tom Woods, D-Bozeman, summarizing the coalition that turned back the legislation. Those lawmakers recognized the Colstrip bill not as a means to save the power plant, but rather a way to bind NorthWestern customers to debt without exposing the terms to the scrutiny of the Public Service Commission.
As part of the plan, the commission, which balances customers’ right to a fair price with the utility’s opportunity to earn an authorized cost of capital, was prevented from turning back NorthWestern’s Colstrip purchase, even if the commission concluded the deal was bad for ratepayers.
There’s nothing stopping the utility from presenting to the commission a plan to buy a larger share of Colstrip generation and transmission. If the company doesn’t want to bake the costs into customer rates, it can make the purchase without the commission’s approval. NorthWestern says it will only pay a dollar for its increased share of the power plant but hasn’t said what an added ownership share of Colstrip transmission lines would cost.
“I would assume that people appreciate that for once the company lost and didn’t get their way,” Woods said. “At the end of the day, the company could have done what they’re saying they wanted. They can still buy Colstrip on their own. Go for it. Take the risk. Do you want to grab more of the transmission? Go for it. Take the risk. That’s what businesses do. What this has been about is getting this into the rate base.”
NorthWestern Energy still sees acquiring a larger share of Colstrip transmission and generation as beneficial, said Jo Dee Black, a company spokeswoman. The company sees a need for a reliable baseline amount of power, and that’s not going away.
“We support this effort and we’ll certainly develop a plan to address this ongoing critical need,” Black said. “We’re disappointed, obviously.”
Black said NorthWestern saw increased Colstrip ownership as a way to secure electricity at a low generation cost. There’s more than generation rolled into the electricity bills of utility customers, but the cost of generation for the newly acquired Colstrip share was expected to be less than what NorthWestern currently incurs on its 30 percent share of Colstrip Unit 4.
There was a second piece of legislation, House Bill 597, that appeared headed to conference committee for a Colstrip makeover, but never made it that far. Thursday, the bill’s sponsor, Rep. Daniel Zolnikov, persuaded lawmakers to pull HB597 back from conference to be passed as is without the Colstrip amendments. The bill should help customers, Zolnikov said.
“I’m just excited to be actually fixing some of the energy laws and allowing oversight on planning. And more importantly, this allows the Montana Consumer Counsel to ensure that competitive solicitation is overseen correctly,” Zolnikov said.
The Consumer Counsel is the constitutionally-created state advocate for customers of monopoly utilities. When it comes to utilities like NorthWestern or Montana Dakota Utilities selecting energy projects to power Montana customers, Zolnikov wants that advocate involved early, looking at available options and not just a single project brought forth by the utility at a later stage. It’s the latter situation that now occurs, which Zolnikov wrote HB597 to fix.