Coal development has dominated the headlines in southeast Montana for some time. While we’ve looked closely at the federal coal leasing program, it’s also worth examining what happens when that Powder River Basin coal leaves the ground. Senator Steve Daines’ recent taxpayer-funded energy summit provides just such an opportunity.
Let’s start with the first myth perpetrated at that conference:: The closure of Colstrip 1 & 2 will devastate Montana’s economy.
Last Fall NorthWestern Energy paid the Bureau of Business and Economic Research to put together a controversial report presuming a doomsday picture for coal’s future in Montana. It’s no surprise politicians immediately seized this report and used it for their own gain. But economists and analysts immediately criticized the BBER report for being incomplete.
Bozeman’s Headwaters Economics came to a much different conclusion in its own nonpartisan report entitled Planning for Montana’s Energy Transition. Headwaters concludes “Montana’s economy continues to grow and diversity, adapting to today’s economy. Education, access to markets, and quality of life are driving economic growth.”
Myth 2: The proposed Clean Power Plan (or “Obama’s War on Coal”) would force the closure of Colstrip Units 1 and 2.
Of course coal-fired power will remain a part of our state’s portfolio, and Montana is ready and able to comply with the Clean Power Plan, which the U.S. Supreme Court recently put on hold. The Clean Power Plan, however, is no longer relevant to the threat of a closure of Colstrip 1 and 2. Seattle-based Puget Sound Energy (PSE), which owns the two units along with Talen Energy has indicated that the future of Colstrip is tied most closely to a market that no longer demands coal and aging infrastructure.
The U.S. Energy Information Administration says “natural gas is expected to fuel the largest share of electricity generation in 2016 at 33%, compared with 32% for coal.” In other words, this year is the “first time that natural gas provides more electricity generation than coal on an annual average basis.”
Myth 3: Montana’s industrial load would suffer if Colstrip 1 and 2 close.
Hardly. Colstrip Units 1 and 2 are capable of producing only 614 megawatts of generating capacity. This is only a small fraction of the electricity needed for our regional market, which has more than 150,000 megawatts of installed electrical capacity.
With all of its energy resources Montana is currently capable of producing 6,164 megawatts of electricity. Colstrip Units 3 and 4 can provide nearly 1,500 megawatts of generating capacity. In 2012 Montana consumed approximately 1,700 megawatts and exported approximately 1,700 megawatts to Washington and Oregon
If Units 1 and 2 become no longer operational, Montana’s industrial customers will still have a reliable source of electricity.
Myth 4: Energy costs would skyrocket if Colstrip 1 and 2 close.
In official testimony provided to and reported by the Washington Legislature, Puget Sound Energy estimates that if Units 1 and 2 shut down, “economic impact to Montana’s industrial customers would increase wholesale market prices by 0.5 percent.”
Myth 5: Existing transmission infrastructure will be decommissioned.
The controversial NorthWestern Energy report presumes Colstrip’s 500-kilovolt transmission line would be deactivated if Units 1 and 2 close. In his report questioning the BBER report, Montana economist Thomas Power finds this claim “implausible” and tied to a “domino theory” of unlikely events. If coal-fired electricity isn’t transmitted on that line, the line could transmit electricity from other sources, such as wind-generated power.
These are the facts. They’re not funded by any utility or special interest. And you probably won’t hear many industry politicians using them. But Montanans deserve them in any debate about the future of energy in the Treasure State.