Talen Montana, operator of the coal-fired power plant in Colstrip, Montana, has announced it will close the plant's two oldest units by the end of 2019, three years sooner than once expected.
In a decision made with Puget Sound Energy, the 50/50 co-owners of Units 1 and 2, Talen's June 11 announcement signalled that it makes little financial sense for the companies to keep those units going after this year. They represent about 614 megawatts of the plant's 2,094-megawatt capacity.
"The plant team has done a great job of responding to the challenges faced by Units 1 and 2, but we have been unsuccessful in making the units economically viable," says Dale Lebsack, Talen Montana president, in a news release.
Lebsack pointed to failed negotiations to lower fuel costs with Westmoreland's Rosebud Mine, the sole provider of coal for the plant. Westmoreland Coal went through bankruptcy late last year and in its new iteration owned by creditors, Westmoreland Mining, the company has only promised to honor a coal contract with Colstrip through the end of the year.
Units 3 and 4 at the plant are newer, with six total owners and a combined capacity of 1,480 megawatts. Avista holds a 15 percent ownership stake in those two units. It's not clear yet how those units could be impacted, but the plan is currently to keep them open. Avista is already required to explore closure options over the next several years, as Washington legislation passed earlier this year won't allow utilities to use coal power after 2025.
"You can imagine, it's complicated to sort through all this stuff with five other owners, but our goal is clear, carbon neutrality by 2027," says Avista president and soon-to-be CEO Dennis Vermillion. "We are engaged with our other owners in trying to find a pathway to solve the Colstrip situation in a way that makes sense for us and our customers."
