Colstrip owners beg U.S. Supreme Court to halt Biden pollution rules

For now, one man – U.S.Supreme Court Chief Justice John G. Roberts – may hold the fate of the Colstrip, Montana, coal-fired power plant in his hands.

Lawyers for Talen Montana and NorthWestern Energy, the owners of the aging power plant, the largest coal-fired plant west of the Mississippi River, have asked the chief justice of the Supreme Court for a temporary stay of two rules that owners of the plant say leave them with two terrible choices: Either invest $350 million in immediate upgrades to the pollution controls, or shutter the plant, leaving power customers in Montana facing high energy rates or unreliable power.

In their 38-page emergency appeal to the U.S. Supreme Court, attorneys for Colstrip’s owners say the Biden-era pollution rules unfairly target the Colstrip plant, which has routinely been targeted as one of the dirtiest power generation stations still in operation in the U.S.

Moreover, they contend that the U.S.Environmental Protection Agency has adopted stricter pollution rules without proper justification, making the new rules that govern particulate matter toxins released by burning coal as well as a rule that governs greenhouse gas emissions arbitrary.

Colstrip’s owners warn that without an immediate halt to the EPA’s rules, Colstrip will not have enough time to comply with the law; and, that even if Colstrip does agree to foot the $350 million in estimated upgrades, the company won’t have enough time to recoup the costs before the plant eventually ceases operation.

What hangs in the balance, the lawsuit said, is the future of Montana’s energy landscape, and comes at a time when NorthWestern Energy, the state’s largest public utility, is embracing fossil fuel generation as other companies increase renewables, some even building facilities in Montana to power homes and businesses several states away.

“The Colstrip Power Plant in Montana is uniquely impacted,” the lawsuit states. “Almost half of the final rule’s regulatory costs are imposed on Colstrip, even though EPA failed to show that additional emission reductions are necessary to achieve any measurable health benefits … additional reductions amount to statistical noise.”

The EPA acknowledges that nearly half - 42% - of the regulatory burden would fall on Colstrip. Other environmental groups, however, have previously said that the various owners of the Colstrip plant have intentionally not upgraded and invested in the plant in order to increase profitability.

The owners of Colstrip argue that if the new rules are allowed to go into force, the plant will be forced to shutter in 2031. They also argue that the plant cannot implement carbon capture and sequestration, or co-generate electricity with natural gas turbines on site, which it said will limit the life of the plant. That would mean “devastating risks to the Montana economy and electric reliability.”

“Approximately 3,000 jobs, $200 million in disposable, after-tax income, and over a billion dollars in economic output to Montana hinge on Colstrip,” the suit said. “So long as investments continue to be made for maintenance, Colstrip could operate for at least another 20 years.”

The emergency appeal says that the new pollution rules coupled with the greenhouse gases rules make it impossible to operate the plant long-term because it would have to make the upgrades only to shutter it because it has no plan for co-firing with natural gas or sequestering or storing carbon emitted. In other words, the Biden administration is requiring the owners to make upgrades to the plant costing $350 million, but it would only extend the operational life by 4½ years.

“With at most 4½ years for the plant to recover those costs by selling power, the capital costs of controls are economically irrational for the facility,” the suit said.

The legal maneuver and appeal to the nation’s highest court is a long shot.

Earlier this summer, the Talen owners asked the D.C. Circuit Court of Appeals to stay the rule, but the appeals court denied the request on Aug. 6.

Meanwhile, Montana Attorney General Austin Knudsen and a handful of other states have challenged the Biden administration, saying the administration is unfairly targeting coal-fired plants, jeopardizing the reliability of electric supply throughout the nation.

They said the lower courts have failed to consider that while the EPA rules will affect less than 2% of the nation’s power-generating capacity, they will affect an entire state because so much of Montana’s power relies on Colstrip.

“At any given time Colstrip supplies up to 1,480 megawatts of net generating capacity,” it said. “Montana’s demand (and regional demand) is supplied by renewable sources that are vulnerable to seasonal and weather variability.”

While the 1,480 MW is the capacity of Colstrip, the aging plant has been vulnerable to criticism, too, including that at some of the peak cold and hot weather episodes, it has been generating at much lower than capacity.

“Absent a stay, Colstrip’s fate will already be sealed by the time that this litigation runs its ordinary course,” the filing said.

“Even if NorthWestern could successfully recover those rates after an unpredictable rate recovery hearing, those costs will then fall on Montana’s electricity customers.

“Opponents may trivialize $350 million as minuscule for a nation rule, but these costs impose real consequences when concentrated on a sparsely populated state.”

NorthWestern also claims that it cannot replace Colstrip’s capacity and there are no other sources, even as it is building a controversial natural-gas fired power plant in Laurel.

“There are no near-term feasible means to replace Colstrip’s capacity with other existing NorthWestern capacity or market purchases from other sources,” the suit said.