Myths or Facts? Understand The Facts Behind the Colstrip Power Plant
You've Heard the Myths
Get the facts about this important piece of Montana’s energy future.
NorthWestern Energy is responsible for providing reliable, affordable energy service to Montana communities 24 hours a day, seven days a week. By securing majority ownership in the Colstrip Power Plant, we are taking an important step to keep energy dependable and costs reasonable for Montana families and businesses—especially during harsh weather when energy demand is high.
This expanded ownership will secure the future of this vital resource for Montana and ensure that the Colstrip Power Plant can continue to serve a vital need for our state.
Myth:
Other Colstrip Power Plant owners are leaving because wind and solar energy and battery storage is cheaper.
Fact:
Out-of-state owners (Avista, Puget Sound Energy) must exit the Colstrip Power Plant due to Washington state law — not because of cost. Their departure gives NorthWestern Energy the chance to secure reliable, affordable, on-demand energy for our customers at no acquisition (or upfront) cost, increasing ownership to 55% and ensuring Montanans’ energy needs are prioritized.
Myth:
NorthWestern Energy is stuck in the past, relying on fossil fuels.
Fact:
NorthWestern Energy’s Montana portfolio is among the cleanest in the U.S., with more than 58% wind, solar, and hydro generation. The Colstrip Power Plant provides on demand generation in all weather, including when the wind isn’t blowing and the sun isn’t shining.
Myth:
The Colstrip Plant is old, worn out, and unreliable.
Fact:
In the last decade, the Colstrip Power Plant has been available more than 90% of the time when NorthWestern Energy needed its generation for our Montana customers. It provides dependable, on-demand power in all weather conditions.
Myth:
New wind and solar farms will lower Montanans’ energy bills.
Fact:
Wind and solar generation has low operating costs, but its construction and land requirements are very expensive. Building enough renewable energy generation and the ability to store it to match the Colstrip Power Plant’s on-demand reliability would cost at least hundreds of millions of dollars.
Myth:
Montana’s energy needs can be met with existing generation.
Fact:
Montana has relied too heavily on out-of-state energy, which can be expensive and unavailable when demand is highest. Owning more of the Colstrip Power Plant means that Montana has reliable, affordable power—especially when demand is high and the weather is extreme. This protects our customers from price spikes and supply shortages.
Myth:
NorthWestern Energy’s acquisition of additional shares of the Colstrip Power Plant benefits the company’s shareholders, not Montana customers.
Fact:
If the Colstrip Power Plant were to close before replacement generation resources are in place, Montanans’ energy service reliability and affordability would be jeopardized. This acquisition, at no cost, ensures Montana has the energy it needs and safeguards Montana’s energy future.
Myth:
Setting up a subsidiary for the Puget Sound Energy share of the Colstrip Power Plant by NorthWestern Energy is a violation of Montana law.
Fact:
NorthWestern Energy is acquiring Avista’s share of the Colstrip Power Plant, which is adequate to serve our Montana customers’ energy demand today.
Generation from the Puget Sound Energy share of the Colstrip Plant is not needed right now to meet our Montana customers’ energy demand. That’s why we’ve ensured that the costs to operate and maintain this share will not be included in Montana customer rates until it is needed to serve them.
This transaction is specifically structured to protect our Montana customers and fully complies with state law and regulatory requirements.
Myth:
NorthWestern Energy will sell the generation from the Puget Sound Energy share of the Colstrip Power Plant, but Montana customers’ rates will pay for its operation and maintenance costs.
Fact:
The Montana Public Service Commission requires that the only costs in our customers’ rates are costs for the resources to provide them with energy service.
The Puget Sound Energy share of the Colstrip Power Plant is being acquired by a subsidiary of our parent company, NorthWestern Energy Group, Inc. This means our Montana customers will not pay for costs related to that share unless and until it is needed to serve them.
Myth:
It’s unprecedented for a regulated utility and an unregulated subsidiary of a holding company to own the same asset.
Fact:
Colstrip’s Montana ownership structure has included both regulated and unregulated shares at the direction of the Montana PSC.
Reliability First, Opportunity Ahead
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Reliability First, Opportunity Ahead
Our priority is reliable, affordable energy for Montana families and businesses. We’re working collaboratively with stakeholders on a plan that supports economic development while protecting the interests of all Montanans. Together, we are building an energy strategy that strengthens our communities and secures long-term prosperity.
NorthWestern Energy announces agreement to acquire Puget Sound Energy’s share of Colstrip Plant
Date: Jul 30, 2024
TYPE: News
Category: Investors
Butte, Mont. – July 30, 2024 – Effective Jan. 1, 2026, NorthWestern Energy will acquire, at no cost, Puget Sound Energy’s 370 megawatt share of the Colstrip Plant
The acquisition at no cost will allow us to leverage existing infrastructure that is well established, dependable, reliable and consistently available when our customers need energy the most.
We are working hard to keep energy costs affordable knowing that many Montanans live on fixed incomes and are managing other life expenses. This 370 megawatt additional share of the Colstrip Plant presents an affordable opportunity that benefits our customers beginning on Jan. 1, 2026. An equivalent resource, such as a natural gas plant, would cost more than $700 million to build and would not be available to serve our customers for at least 5 years.
Including the previously announced acquisition of Avista’s 222 megawatts, that are under the same terms and timeline, NorthWestern Energy will own 55% of the Colstrip Plant. Majority ownership allows NorthWestern Energy to effectively guide investments in operation and maintenance of the Colstrip Plant, ensuring the plant continues to provide on-demand, 24/7 cost-effective generation for our Montana customers until viable, equivalent, carbon-free energy resources are commercially available.
Other states require a transition away from coal resources at a pace faster than is feasible in Montana. This no-cost acquisition allows our customers to transition to a cleaner energy future at a pace that works for Montanans.
The Colstrip Plant is a dependable bridge to a cleaner energy future, which could ultimately include new lower- or no-carbon emitting resources such as gas-fired generation, small modular nuclear reactors, long-duration storage or other technologies, which we believe could be located in the Colstrip area. But this will take time and we will not sacrifice service reliability during the transition.
“Today’s announcement is yet another step in securing a strong future for Montana-made energy,” Montana Governor Greg Gianforte said. “Working with our partners, we've defended our all-of-the-above energy strategy to increase access to affordable, reliable energy for all Montana consumers. I thank NorthWestern for their continued investment in our state and in the community of Colstrip.”
Montana has considerable low cost wind and solar generation on our system today, but that generation is variable. The Colstrip Plant’s generation provides power for our Montana customers when the wind isn’t blowing and the sun isn’t shining at costs that are typically much less than the cost of purchasing energy on the market.
When the sun is shining and the wind is blowing, we can reduce the amount of power being generated by the Colstrip Plant.
Montana’s energy demand is growing. We are in discussions with several large customers seeking dependable, established and consistent energy. This additional portion of the Colstrip Plant will not only allow us to reliably serve our current customers into the future, but it will also allow us to support economic development and load growth in Montana while helping to insulate existing customers from costs associated with serving new large load customers.
Puget Sound Energy will retain its obligation for its portion of environmental and decommissioning costs associated with the future closure of the plant.
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NorthWestern Energy - Delivering a Bright Future
NorthWestern Energy provides essential energy infrastructure and valuable services that enrich lives and empower communities while serving as long-term partners to our customers and communities. We work to deliver safe, reliable, and innovative energy solutions that create value for customers, communities, employees, and investors. We do this by providing low-cost and reliable service performed by highly-adaptable and skilled employees. We provide electricity and / or natural gas to approximately 764,200 customers in Montana, South Dakota, Nebraska, and Yellowstone National Park. We have provided service in South Dakota and Nebraska since 1923 and in Montana since 2002.
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