Judge Temporarily Blocks Law To Prevent Power Plant Closure

BILLINGS, Mont. (AP) — A federal judge has temporarily blocked a Montana law that sought to prevent the closure of a coal-fired power plant by requiring its outgoing owners to pay for long-term maintenance and operating costs.

U.S. District Judge Susan Watters said Wednesday the law passed by the 2021 Legislature is likely unconstitutional for interfering in a contractual relationship without a legitimate public interest and for discriminating against the plant's out-of-state owners.

The law passed by the Republican-controlled legislature said if a co-owner refuses to share in the operating costs or takes actions that bring about the closure of an electrical generation facility without the consent of all the co-owners, it would be considered an “unfair or deceptive trade practice.” As such, Montana’s attorney general could issue fines of up to $100,000 per day.

Puget Sound Energy, Avista Corp., Portland General Electric and PacificCorp together own 70% of the Colstrip Power Plant in southeastern Montana. Their home states of Washington and Oregon are phasing out the use of coal-generated power over climate concerns — Washington in late 2025 and Oregon in early 2030.

Talen Montana and NorthWestern Energy, which do not face coal-power bans, own the rest of the plant and want it to remain open.

When Republican Gov. Greg Gianforte signed the law in May, he issued a statement saying that "woke, overzealous regulators in Washington state are punishing the people of Colstrip with their anti-coal agenda.”

Watters said evidence, including Gianforte's statement upon signing the bill, suggested the law was intentionally discriminatory against the power plant's out-of-state owners, The Billings Gazette reported.

Last year, the plant owners from Washington state and Oregon objected to paying for repairs to extend the plant's life beyond when they can sell the power.

NorthWestern Energy in February sought arbitration on whether a majority vote or a unanimous vote was needed to close the plant.

Talen Montana proposed the arbitration take place in Montana with three arbitrators. However, the contract governing the plant calls for arbitration to happen before one arbitrator in Spokane, Washington.

The 2021 Montana Legislature passed a bill requiring any arbitration to take place in Montana. Puget Sound Energy and the other out-of-state owners are challenging that law, as well, for interfering in the operating contract.