{"id":260324,"date":"2026-01-15T09:56:57","date_gmt":"2026-01-15T16:56:57","guid":{"rendered":"https:\/\/montanafreepress.org\/?p=260324"},"modified":"2026-01-15T09:57:08","modified_gmt":"2026-01-15T16:57:08","slug":"northwestern-energy-now-owns-an-extra-592-megawatts-of-colstrip-whats-its-plan-for-doubling-down-on-coal","status":"publish","type":"post","link":"https:\/\/montanafreepress.org\/2026\/01\/15\/northwestern-energy-now-owns-an-extra-592-megawatts-of-colstrip-whats-its-plan-for-doubling-down-on-coal\/","title":{"rendered":"NorthWestern Energy now owns an extra 592 megawatts of Colstrip. What\u2019s its plan for doubling down on coal?"},"content":{"rendered":"\n

NorthWestern Energy, the utility giant that serves nearly half of Montana\u2019s electricity customers, took official ownership of a majority stake in the remaining operational units of Montana\u2019s Colstrip coal power plant Jan. 1. As a result, the shareholder-owned utility has <\/strong>the ability to generate more electricity than ever before to power Montanans\u2019 homes and businesses \u2014 or to sell to new customers.<\/p>\n\n\n\n

Energy watchdogs, among them environmental groups that have long hoped to see Colstrip shut down, want to know more about the monopoly utility\u2019s plans for all that extra power, which NorthWestern has touted as a \u201ccritical\u201d resource to keep Montana\u2019s grid stable for its 400,000 residential electric customers. Among the questions in circulation are whether the utility will instead use it to serve energy-hungry data centers and how long it plans to keep Colstrip running.<\/p>\n\n\n\n

To the chagrin of NorthWestern\u2019s critics and regulators, the company hasn\u2019t been particularly forthcoming about its plans for using its newly acquired Colstrip power, some of which could be used to serve new data centers or sold out of state. The company maintains that existing customers won\u2019t end up paying more as a result of the acquisition.<\/p>\n\n\n\n

Montana Free Press parsed regulatory filings and spoke with utility experts to learn more about NorthWestern\u2019s plan to sell power on the open market and how regulators are approaching the issue, which one former Montana utility commissioner described to MTFP as rife with risk for NorthWestern\u2019s ratepayers.<\/p>\n\n\n\n

This is what we know.<\/p>\n\n\n\n

WHY IS NORTHWESTERN GETTING MORE COAL POWER?<\/strong><\/h4>\n\n\n\n

Washington state lawmakers passed a bill to fight climate change<\/a> in 2019 that bars utilities in that state from having coal-fired power in their portfolio after the end of last year. The law, aimed at reducing atmosphere-warming emissions of carbon dioxide, affects two of the utilities that had major stakes in Colstrip: Avista and Puget Sound Energy.<\/p>\n\n\n\n

Avista announced its exit plan in 2023: transferring its 222-megawatt share of Colstrip to NorthWestern<\/a> when the Washington law took effect. A year and a half later, Puget reached a similar agreement<\/a> for its 370-megawatt share of the plant. In both cases, NorthWestern agreed to pay \u201czero dollars\u201d for the transfer, which John Hines, NorthWestern\u2019s vice president of energy supply and government affairs, described at the time as being \u201cabsolutely critical for the community, for the state, and allowing us to have sufficient, adequate power in Montana.\u201d<\/p>\n\n\n\n

Put together, the shares are capable of generating enough energy to meet the annual electricity needs of approximately 475,000 homes. When combined with the 222 megawatts of Colstrip NorthWestern has owned for years, the acquisitions also give the company a 55% majority ownership stake in the plant, which has historically been jointly managed by an array of utilities in Montana, Washington and Oregon. That expanded stake is enough, NorthWestern hopes<\/a>, to steer the aging plant\u2019s future amid conflicting views among owners about when it should be shut down \u2014 and how much money it\u2019s smart to funnel into operating and maintaining it in the interim.<\/p>\n\n\n\n

In a Jan. 1 statement about the share transfer<\/a>, current NorthWestern CEO Brian Bird described the company\u2019s Colstrip strategy as \u201cresponsible progress\u201d that will ensure the company has access to enough generation capacity to keep Montana\u2019s power supply stable when grid-straining cold snaps overlap low-production periods for wind and solar facilities.<\/p>\n\n\n\n

\u201cBy securing the Colstrip Plant\u2019s capacity today, we\u2019re safeguarding reliability during the harshest weather \u2014 and creating space for tomorrow\u2019s opportunities,\u201d Bird wrote.<\/p>\n\n\n\t\n\t\t

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NorthWestern anticipates spending $18 million annually on operation and maintenance for Avista\u2019s share of Colstrip<\/a><\/h3>\t\t\t\t\t\t

NorthWestern Energy is asking the Montana Public Service Commission to approve a new regulatory mechanism for its expanded share of the Colstrip coal-fired power plant. <\/p>\n\t\t\t\t

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WHAT ARE NORTHWESTERN WATCHDOGS WORRIED ABOUT<\/strong>?<\/h4>\n\n\n\n

Even before NorthWestern publicly disclosed its courtship with data centers, longtime NorthWestern critic Montana Environmental Information Center<\/a> expressed concerns about the utility\u2019s plans for Colstrip.<\/p>\n\n\n\n

Along with the Sierra Club, MEIC has argued<\/a> that the \u201cfree\u201d price of the extra Colstrip shares obscures very real costs of owning and operating the 40-year-old plant: coal to fuel it, personnel to run it, a hefty annual property tax bill, and expensive equipment maintenance<\/a>.\u00a0<\/p>\n\n\n\n

MEIC maintains that it\u2019s foolish for NorthWestern to double down on coal power when other generating options such as solar and wind are cleaner and often cheaper on a per-megawatt-hour basis<\/a>. The environmental group has also argued for years that the plant is not as reliable as NorthWestern would have its customers believe.<\/p>\n\n\n\n

WHAT ABOUT THOSE DATA CENTERS?<\/strong><\/h4>\n\n\n\n

MEIC\u2019s concerns escalated<\/a> last year when NorthWestern announced that it has reached tentative agreements with proposed data centers that would require enormous amounts of electricity. Sabey Data Centers is planning a development outside of Butte<\/a> that could require up to 250 megawatts and an existing facility in Butte, operated by Atlas Power<\/a>, is seeking another 150 megawatts of NorthWestern-supplied power. A recently-formed company called Quantica anticipates using an eye-popping 1,000 megawatts of power by 2030 <\/a>for a \u201chyperscale\u201d facility for artificial intelligence and other tech applications located in the Billings area. If all three of those projects come to fruition as proposed, their electrical demand will combine to more than double the amount of power NorthWestern currently supplies to Montana customers<\/a>.<\/p>\n\n\n\n

That extra electricity would need to be generated somewhere. It could also need new transmission lines to move it around. While the company has said that new customers will pay \u201ctheir fair share of service and integration costs,\u201d MEIC and other skeptical observers worry that existing customers will end up on the hook for the costs of retooling the electric grid to serve a handful of massive data centers.

Jenny Harbine, an Earthjustice attorney representing MEIC in energy-related litigation, described the NorthWestern\u2019s Colstrip expansion as \u201cexceptionally costly for ratepayers on Day One\u201d of the transfer. She\u2019s also critical of NorthWestern\u2019s lack of transparency regarding its plans for the facility.<\/p>\n\n\n\n

Ken Toole, a former member of Montana\u2019s elected utility regulation board, the Public Service Commission, argued that the combination of \u201cspeculative investment\u201d and aging coal infrastructure could set up a dynamic similar to the energy fiasco the state saw in the late 1990s. Back then, the state\u2019s dominant utility company, Montana Power, went all-in for telecommunications<\/a>, overextended itself and declared bankruptcy. In a 2003 expos\u00e9<\/a> titled \u201cWho Killed Montana Power?\u201d CBS News said the debacle \u201cexemplified the worst of American capitalism.\u201d<\/p>\n\n\n\n

\u201cWell, here we are again,\u201d Toole said. \u201cAt that time, the big, shiny object was telecom and the rate of return you do in telecom. At this point in time, I think the big, shiny object is data centers. Nobody knows what they are, nobody knows how they operate, nobody knows how stable they are as a business.\u201d<\/p>\n\n\n\n

Where the dynamic could get \u201csticky,\u201d Toole said, is if a data center venture fails, leaving NorthWestern on the hook for the cost of transmission lines and substations built to serve it. The utility could end up paying off the debt it incurred for the undertaking with revenue from its most reliable revenue stream: small business and residential ratepayers.<\/p>\n\n\n\n

\u201cConsumers are at risk unless it\u2019s done right, and I\u2019m not sure how easy it is to do it right,\u201d Toole said.<\/p>\n\n\n\t\n\t\t

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Groups push back on Montana\u2019s \u2018data center boom\u2019 in petition before utility commission<\/a><\/h3>\t\t\t\t\t\t

In a petition before the Public Service Commission, a coalition of groups working on energy, climate and social justice issues argued that hundreds of thousands of Montanans will face higher bills unless the state\u2019s utility regulator provides stricter oversight of NorthWestern Energy, the state\u2019s largest utility. NorthWestern has inked agreements with at least three data centers that will, if built, require every megawatt of energy the company can currently generate, and then some. <\/p>\n\t\t\t\t

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WHO\u2019S RESPONSIBLE FOR PROTECTING CONSUMERS?<\/strong><\/h4>\n\n\n\n

State and federal energy regulators have complementary, but distinct, roles to play.<\/p>\n\n\n\n

The state-level utility regulator, the PSC, is generally responsible for balancing the financial health of the shareholder-owned utilities with the interests of their customers, who can\u2019t shop around for service from other companies.<\/p>\n\n\n\n

In contrast, the PSC\u2019s federal counterpart, the Federal Energy Regulatory Commission, acts as a referee when companies sell and move power on the open market to ensure that the rates they charge are \u201cjust and reasonable.\u201d <\/p>\n\n\n\n

MEIC is pushing both state and federal regulators to scrutinize NorthWestern\u2019s plans for any new power-generating capacity it uses to serve new customers, including data centers. But government officials aren\u2019t necessarily on the same page about the best path forward and neither regulatory agency appears to be finished reviewing NorthWestern\u2019s plans for the extra Colstrip shares despite the fact that the transfers have already occurred.<\/p>\n\n\n\n

Let\u2019s start with FERC \u2014 the federal regulator. In mid-October, NorthWestern formed a wholly-owned, non-utility subsidiary called NorthWestern Colstrip and asked FERC<\/a> to approve a plan for that subsidiary to sell the electricity from the part of Colstrip previously held by Puget to customers on the open market (as distinct from the homes and companies it currently serves that are part of its PSC-regulated business). In order to do that, the company has pitched the federal regulators on a tariff structure it could use to sell electricity to an international power broker called Mercuria.<\/p>\n\n\n\n

MEIC weighed in in opposition to that request<\/a> before FERC in November, arguing that existing Montana customers are at risk of \u201ccross-subsidization\u201d \u2014 a utility no-no where one group of customers pays for another group\u2019s service needs. MEIC also argued that NorthWestern should have sought approval in advance for picking up the shares in Colstrip \u2014 something the company didn\u2019t do because it says the zero-dollar purchase price was below a threshold requiring federal scrutiny of power generation asset transactions valued at $10 million or more.<\/p>\n\n\n

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\"Lauren
Public Service Commissioner Brad Molnar listens during a Public Service Commission meeting on Dec. 9, 2025, in Helena. Credit:<\/span> Lauren Miller, Montana Free Press, CatchLight Local\/Report for America<\/span><\/figcaption><\/figure>\n<\/div>\n\n\n

In December, Public Service Commissioner Brad Molnar convinced the state regulatory agency to intervene in the matter<\/a>. He said in an interview that he wants Montana regulators to be part of the conversation because he thinks the new-to-NorthWestern Colstrip power will be cheaper to generate than the power from other NorthWestern-owned assets such as the Yellowstone County Generating Station, $247 million of which is being incorporated into customers\u2019 bills<\/a>. He\u2019s also critical of the \u201cshell company\u201d NorthWestern created to facilitate the sales.<\/p>\n\n\n\n

To Molnar\u2019s chagrin, a majority of his fellow commissioners ultimately decided to reverse course, with one writing in a letter to FERC<\/a> that the PSC \u201ccan assess the prudency of the transactions\u201d on its own and would open its own investigation.<\/p>\n\n\n\n

\u201cWe have pulled ourselves out of the biggest energy fight that I\u2019m aware of,\u201d Molnar said of the development, going on to accuse his colleagues at the PSC of \u201cpretending to lower rates by nibbling around the edge of what NorthWestern wants.\u201d<\/p>\n\n\n\n

WHAT IS THE PUBLIC SERVICE COMMISSION LOOKING INTO?<\/strong><\/h4>\n\n\n\n

MTFP reviewed the filings that have been made as part of the PSC\u2019s investigation into NorthWestern\u2019s \u201cacquisition and subsequent treatment of\u201d new Colstrip capacity<\/a>. So far, the only filings submitted as part of the investigation are a letter from the PSC<\/a> asking if NorthWestern plans to seek regulatory approval for taking on a bigger share of the coal plant \u2014 and a reply letter from the company<\/a> saying no. Both came before the PSC\u2019s aborted attempt to involve itself in the federal regulatory proceedings.<\/p>\n\n\n\n

NorthWestern wrote in its response letter that since the Puget shares would be transferred directly to its new subsidiary, NorthWestern Colstrip, the transaction falls outside the PSC\u2019s jurisdiction. NorthWestern\u2019s attorney, Michael Green, wrote that the arrangement \u201cprovides maximum flexibility to deploy this resource in a way that assists existing large loads and facilitates economic development without impacting current utility customers.\u201d <\/p>\n\n\n\n

That argument is similar to one Green made last month when he defended the company\u2019s proposal to establish power purchase agreements with a handful of Montana companies for some of the Colstrip power previously owned by Avista. That agreement, tentatively approved by the PSC on Tuesday, makes accommodations for plant maintenance and coal costs and will, according to NorthWestern, protect its existing customers from shouldering those costs.<\/p>\n\n\n\t\n\t\t

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NorthWestern Energy announces deal to acquire larger share of Colstrip power plant<\/a><\/h3>\t\t\t\t\t\t

NorthWestern Energy announced that it will acquire a large share of the Colstrip power plant from Puget Sound Energy, a Washington-based utility facing a mandate to stop using coal-generated power by 2025. <\/p>\n\t\t\t\t

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WHAT ARE FEDERAL REGULATORS DOING?<\/strong><\/h4>\n\n\n\n

On Dec. 23, FERC asked NorthWestern for more information<\/a> about Colstrip\u2019s value \u2014 presumably to assess compliance with the $10 million threshold for regulatory review \u2014 and for more detail about how disagreements between plant owners are handled. <\/p>\n\n\n\n

More specifically, FERC asked to know the \u201coriginal cost undepreciated\u201d or the \u201coriginal book value\u201d of Puget\u2019s shares of the Colstrip plant. It also wanted to know more about the timing and logistics of the transfer between Puget to NorthWestern. Finally, it asked for more detail on the ownership agreement that governs the plant\u2019s future. FERC wants to know, for example, if any of the plant\u2019s co-owners have rights or veto powers that are \u201cdisproportionate\u201d to other owners. <\/p>\n\n\n\n

Why the latter information matters to FERC is hard to decipher. The agency declined multiple requests by MTFP for an interview.<\/p>\n\n\n\n

Last week, NorthWestern submitted a suite of materials<\/a> maintaining that, while the former owner estimated the value of its stake in the plant at $542 million in the mid-1980s, it is now appropriately valued at $0 and will be recorded on its books as such.<\/p>\n\n\n\n

William Booth, an attorney who specializes in FERC law, told MTFP that NorthWestern\u2019s response restarted a 60-day timer. That means the plant\u2019s future \u2014 at least as it relates to the Puget shares now under NorthWestern\u2019s possession \u2014 should come into sharper focus during the first half of April.<\/p>\n\n\n\n

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