House approves Colstrip bills

Montana doesn’t need “the West Coast” telling it what to do.

That was one sentiment Republican legislators expressed this week as they pushed one of several bills this session they believe will help NorthWestern Energy keep the Colstrip power plant running. The House discussed Senate Bills 265 and 266 on Monday and approved them Tuesday on third reading.

The Colstrip plants use coal, which the energy market is turning away from. Coal costs are projected to increase, and it’s unpopular in Oregon and Washington. But in Montana?

“What’s best for Colstrip and the people of Colstrip?” said Rep. Barry Usher, R-Billings, on the House floor. “Keep it open. What’s best for Montana citizens? Keep it going. Those people that don’t want to be involved? Go away. Tell the West Coast people to go away.”

Another bill designed to help NorthWestern Energy, Senate Bill 379, is scheduled to be heard Wednesday in the House Energy, Technology and Federal Relations Committee. Montana Public Service Commission staff analyses note that bill would shift the risk and cost of acquisitions by NorthWestern onto ratepayers and tie the hands of elected commissioners, whose job it is to regulate the monopoly.

NorthWestern is among several companies with ownership in Colstrip Units 3 and 4.

References to the “West Coast” and “Left Coast” arose in discussion about Senate Bill 266, and the people that Montana Republicans want to “go away” include regulators in Washington. Washington’s Clean Energy Transformation Act requires the state’s utilities, such as Colstrip owners Avista Corporation and Puget Sound, to eliminate coal from retail electric sales by the end of 2025. So the clock is ticking on the Colstrip plants.

Sponsored by Sen. Steve Fitzpatrick, R-Great Falls, Senate Bill 266 makes it a “deceptive act” in commerce for one or more owners of a jointly owned electrical generation facility in Montana to bring about permanent closure of a unit without gaining consent from all owners. (Just last year, NorthWestern tried to buy more shares of Colstrip.) A violator would face a civil fine of $100,000 a day for each offense, according to the most recent version of the bill.

A couple of Democrats rebuked the legislation, one because it is at odds with the United States Constitution’s protection of contracts, and another because it declares the state Department of Justice has the authority to take action.

Rep. Tom France, D-Missoula, said he read the part of the legislation that calls on the attorney general to act with incredulity: “I opened my eyes wide when I read it.”

He said in normal contract disputes, private attorneys representing private businesses hash out their differences, not leaning on the attorney general to intervene.

“This is almost a capture of our attorney general and his many, many responsibilities to the public,” France said. “And I just find it unfathomable why we would approve this kind of a provision in a bill affecting private parties.”

In fact, Rep. Andrea Olsen, D-Missoula, said the contract clause of the U.S. Constitution provides that no state pass a law impairing the obligation of contracts. But she said the purpose of the bill is to do just that; it reaches into a 40-year-old contract to rewrite one provision — to the benefit of one party and detriment of other parties.

“This bill will send chills down the spine of any business,” Olsen said.

In discussing the bill, though, Rep. Derek Skees, R-Kalispell, also said the owners headquartered in the “Left Coast” were getting pressure to “do a certain thing to Colstrip.” And he said the attorney general should defend the interests of Montanans against regulated monopolies.

As amended, the bill notes all legal actions will be brought in the county where the generation facility is located. The House voted 71-27 to approve the bill Tuesday on third reading.

“This is a power plant that’s in Montana,” Skees said. “Montana should determine if it survives or not. That’s exactly what this bill does.”

Tuesday, the House also approved Senate Bill 265, this one on a 63-35 vote. The bill is sponsored by Sens. Fitzpatrick, Duane Ankney, R-Colstrip, and Jason Small, R-Busby.

Rep. Bob Phalen, R-Lindsay, said the bill would mean that if there’s a dispute about an electrical generation facility in Montana that requires arbitration, the arbitration would take place in the state. Also, it increases the number of arbiters from one to three. Lindsay said he believes having just one arbiter in Spokane (as would currently be the case) selected by a district judge increases the likelihood a selected arbiter is biased against Colstrip.

Rep. Denise Hayman, D-Bozeman, opposed the bill, noting it sought to overturn an established contract between private parties. Decades after the deal, she said one party is seeking to rewrite the contract in violation of the contracts clause of the U.S. and Montana constitutions.

“Montana taxpayers shouldn’t have to pay to defend that lawsuit just so one owner can change the rules of the game after 40 years,” Hayman said. “If a company wants to rewrite a contract, it should do so through the normal channels available to it.”