Energy Reinvestments in the Intermountain West Can Save Ratepayers Hundreds of Millions

Montana’s Colstrip Generating Station, one of the nation’s largest remaining coal-fired power plants, is at a watershed moment. A managed phaseout of the coal-fired power units to a portfolio of low-cost, carbon-free resources would significantly benefit Montana ratepayers. Analysis from RMI demonstrates that such a portfolio can effectively ensure reliable power supply while saving ratepayers $500 million to $1.17 billion over the next 30 years. Regulators and utilities can act quickly to maximize the benefits for Montana ratepayers. The most ideal time to deliver the cost savings and economic growth of reinvesting in the Colstrip plant is now.

Northwestern Energy and the Montana Public Service Commission are responsible for maximizing benefits to ratepayers. Acting soon will help secure a reliable, affordable, and clean electricity supply for Montana ratepayers while creating economic opportunities for local communities.

Recommended actions for Northwestern Energy:

• In the current rate case, prioritize engaging with stakeholders to identify and leverage available policy and financial incentives that support a coal-to-clean reinvestment. This proactive approach ensures investments align with the long-term interests of Montana’s ratepayers.
• In the upcoming integrated resource plan (IRP), thoroughly assess the impacts of managed phaseout of the coal-fired power units and reinvesting in more affordable energy technologies. Develop portfolio scenarios that include renewable energy and storage solutions and consider Energy Infrastructure Reinvestment (EIR) financing to inform optimal resource selection.

Recommended actions for the Montana Public Service Commission:

• • In its decisions on Northwestern Energy’s rate case, emphasize the need to evaluate retiring the coal-fired power units and reinvesting in more affordable energy technologies. Direct the utility to explicitly incorporate EIR financing and/or securitization strategies in its IRP modeling process.
  • Look to the precedent set by other public service commissions, such as in North Carolina and South Carolina, which ordered the utilities to assess federal funding opportunities such as EIR in the upcoming IRP.

Additional technical and editorial support was provided by RMI colleagues Aaron Schwartz and Joseph Daniel.