Colstrip Units 1 and 2 will close at the turn of the year, Talen Energy announced Tuesday in a press release.
The speech says that the units previously planned to run as late as 2022 are not economically viable. The speech shares ownership of the units with Puget Sound Energy, of Washington State. The Puget must stop using coal power by the end of 2025 in Washington law.
Colstrips other two units, 3 and 4, remain in operation. Currently, Colstrip is one of the largest coal-fired power stations in the West.
"The decision to withdraw Colstrip Units 1[ads1] and 2 comes after extensive review and exhaustive efforts in recent years to tackle the economic challenges facing these entities," said a press release, Dale Lebsack, President of the Montana Speech. Lebsack continued: "The plant team has done a good job of responding to the challenges of Units 1 and 2, but we have failed to make the units economically viable."
Colstrip Mayor John Williams said Tuesday's announcement was unexpected, especially because all four Colstrip units were in full operation for weeks in January and February as extremely cold weather increased demand for coal power.
"I don't know where to go. It's surprising that they take this approach," Williams says. per megawatt a few months ago.
"I'm worried about the impact on employees, who work in the community, who work at the power plant," says Williams. The power plant owner has shown interest in contributing to the fund.
The economic challenges The language stands for are competition in the open market from natural gas and renewable energy sources, both of which are cheaper. The speech is a merchant power generator selling electricity on the open market , unlike Colstrip's other five owners, who are regulated tools with captive customers and protected returns.
The power producers have also been in long-term contract for future coal for Colstrip.The current contract with Rosebud Mine expires at the turn of the year. The coal price will make the units less economical.
Units 1 and 2 burn about 2 million tons of coal per year, if follow speech. There are 2 million fewer tons of Rosebud Mine, which is located within walking distance from the power plant and employs around 300 people.
The mine is owned by Westmoreland Mining LLC, which consists of creditors of Westmoreland Coal Co., which went bankrupt earlier this year. The creditors in January indicated that they would not respect the bankruptcy firm's contract with the power plant, causing threats of immediate closure of all four units by the six Colstrip owners.
The creditors were then agreed to see the contract expired in December.
The speech said that workers from units 1 and 2 would be assigned cleanup or transferred to the power plant's other two units. More than 300 people work at the firework station.
For several years, Colstrip owners have suggested that some jobs will be phased out through wear, while others passed to units 3 and 4.
Previously, most discussed end dates for units 1 and 2 were December 2022. The date was linked to a legal decision in July 2016 where Colstrip owners agreed to close the units "latest" by 2022. The settlement was between the unit owners, the Sierra Club and the Montana Environmental Information Center. The litigation center for air pollution.
Units 1 and 2 were built in the mid-1970s. The finances of the oldest units have been troubled for years. In 2016, Talen gave the other five owners of the power plant two years' notice that it would stop operating the plant by mid-2018. The speech then said that millions of dollars per quarter lost on Colstrip.
Later, the speech considered and continued to operate the plant. Power Plant's other owners – Oregon tools PacifiCorp and Portland General Electric; Washington tools Puget Sound Energy and Avista Corp.; and South Dakota-based NorthWestern Energy – were not interested in operating the power plant's daily operations.
The closure will increase the development of new energy sources, especially for Puget Sound Energy, which owns half of the production from units 1 and 2. The largest Colstrip stakeholder has made replacement energy plans, including contracts with proposed renewable energy projects in Montana. But those plans did not assume closure for the next six months.
Capacity wise, we can go to the open market and take some power to replace 1 and 2, says Ron Roberts, Puget's director of thermal resources. "At the same time, we have an all-source proposition request for power that was originally targeted for the middle of & # 39; when 1 and 2 were looking to close through the settlement. try to see and see if there are any who may be able to accelerate. "
Roberts says replacement power does not have to be" baseload "power, a term used to describe that type of non-fluctuating energy supply. fossil fuels can offer.
Colstrip Units 1 and 2 have not been running continuously. They are the first units in the power plant to call down to accommodate power from Pacific Northwest dams in the spring, as well as wind power.
The units are in financial closure, Roberts said.
"They don't run for the time being," Roberts said. "They do not have the entire second quarter, and this is mainly due to economy and abundance of power supplies."
Federal records show that the units were disconnected for the same period last year.
Montana Developers of renewable energy have had 2022 circled on calendars for the launch of wind and solar projects when units 1 and 2 are closed. Developers needed capacity on power lines serving Colstrip to transfer to the Pacific Northwest.
The release of freight in early 2020 changes things, said Jeff Fox for Renewable Northwest.
"I think this is a great opportunity to get Montana renewable energy to northwest markets, which we have been trying to do for a long time," said Fox. "I think the economy that drives the closure is the same economy that will work for the benefit of Renewable Resource Power. "
Puget Sound Energy, especially because it owns leased lines related to Units 1 and 2, can play a major role in Montana's renewable energy development, Fox said either by joining Montana renewable projects or making capacity available to others to move energy to Oregon and Washington
There will be costs divided into four Colstrip units that must be shouldered to units 3 and 4 in the future. Customers of the Colstrip owners must cover an increased share of the expenses.
units 3 and 4 will meet the challenges of coal supply agreements. Coal contracts for these units also expire at year-end.
"Cool supply costs for units 3 and 4 are obviously also e t big problem, "Roberts said. "If the price is too high, what it does is push the shipping numbers down on numbers 3 and 4, which means you have all the costs spread over fewer megawatts, which means the price goes up and if the price goes up run it less, and it starts that kind of vicious circle. "
NorthWestern Energy, which has 370,000 customers in Montana, said in an email that the economy of units 3 and 4 is better than the economy of units 1 and 2.
" Colstrip Units 3 and 4 are decades later, are significantly more efficient and therefore more cost-effective to operate than Colstrip Units 1 and 2. A new, reasonably priced fuel contract with Westmoreland Rosebud Mining is also needed for the successful long-term operation of Colstrip Units 3 and 4, says John Hines, NorthWestern Energy Vice President of Energy Supply and Government Relations.
NorthWestern customers are obliged to pay the company $ 407 million to 8.25% interest in their 20% stake in Unit 4. Th ose payments is slated to f change to 2042. The company has said it is obliged to keep the power plant running to that date.
Four of the other owners of units 3 and 4 face deadlines in their states to get out of coal power. Washington prohibits coal power by the end of 2025. Oregon imposes PacifiCorp 2030 and Portland General Electric in 2035. The four owners have more than 3 million customers gathered.
News about the 2019 closure of units 1 and 2 told press releases about the rebellion of Montana politicians.
"This is a sad day for Montana, the Colstrip community and our energy security," US Sen. Steve Daines, a Republican. "Today's news is another example of the devastating effects of extreme environmental regulations, fringe problems and biased politics. I worked hard to find a solution, and seeing entities 1 and 2 really forced to close is really discouraging. to preserve units 3 and 4 as part of monta's energy portfolio for decades to come. I stand with the Colstrip community and will continue the fight in Washington, DC "
US Rep. Greg Gianforte said: "Colstrip has long provided affordable, reliable electricity to the montans, but the war on coal has threatened Colstrip and profitable jobs for hard-working montans. I continue to work to keep units 3 and 4 running, protecting Colstrip and Montana jobs , and provide affordable power to all montanans. "
The two congressmen will be in Billings on Wednesday with Vice President Mike Pence. In a visit in 2017 in the Absaloka mine, Pence said the war or litter is over. The trump administration has struggled to prevent coal power plants from closing.
Sen. Jon Tester said in a press release, "This news is surprising, and I will work to ensure that the speech does not leave workers to dry and keep the community and employees informed of what to expect in this process. And I will hold them accountable for a thorough cleanup of the site. "
Gov. Steve Bullock, at the Presidential Promotional Track in Iowa, told Lee Montana newspapers he had heard from Talen Energy's president on Tuesday.
"We will do everything we can to help that community," Bullock said.