HELENA – In Montana’s hard-fought U.S. Senate race between Jon Tester and Denny Rehberg, the fate of a coal-fired power plant in Billings has become a flash point, with Rehberg blaming Tester and the Obama administration for the plant’s likely closure in 2015.

Rehberg, his fellow Republicans and the plant’s owner – PPL Montana – are pointing to a 2011 federal air-quality regulation as a primary reason for the recently announced “mothballing” of the 154-megawatt Corette power plant.

“Senator Tester was warned that, if he voted a certain way, it would put plants at risk,” Rehberg said at a campaign stop this week. “And the Corette plant has just announced that they will be closing their doors in 2015, costing 35 jobs and $10 million out of our economy.

“That is the wrong thing to do, at a time when you’re trying to rebuild your economy.”

What goes unmentioned, however, is that the 2011 rules regulating certain power-plant emissions have been delayed for nearly 20 years – and stem in part from a 2008 federal court order, which said the U.S. Environmental Protection Agency illegally exempted power plants from clean air regulations passed by Congress in 1990.

Tester’s vote, to which Rehberg refers, was against a Republican-led effort in Congress this summer to block and delay the rules yet again. The effort failed.

Several Montana business groups, as well as the power and coal industry, supported the delay, and the groups asked Tester, D-Mont., and Sen. Max Baucus, D-Mont., to vote for it. Both men voted against it.

Tester thought the delay effort was a “red herring” proposal designed to be a campaign issue, and supports the new EPA rule, his spokesman Aaron Murphy said this week.

“Jon believes in responsible measures that protect Montana’s clean air and water without destroying our traditional energy resources, and these rules fit that bill,” Murphy said.

PPL Montana acknowledges that while the EPA rules played a role in the company’s decision to mothball Corette, regional power markets also are a key factor, as the long-range forecast shows prices far below what PPL considers profitable for the plant.

***

The explosion of natural gas production in America has helped push the cost of generating electricity to historic lows, depressing the wholesale power market – and making many coal-fired power plants unprofitable, according to industry observers.

Environmental groups and Tester also note that PPL remains hugely profitable and is investing in power plants overseas, and say it could afford to upgrade the Corette plant to meet the new 2011 regulation by 2015, but chose not to.

“The cost to control these pollutants is a drop in the bucket of PPL’s annual profits,” Anne Hedges, program director for the Montana Environmental Information Center, wrote this week. “Yet PPL decided that Corette wasn’t worth a small investment.”

That “small investment,” according to PPL, is $38 million, to install filters that would capture enough heavy metals and acid gases from coal burning at Corette to comply with the new EPA regulations.

PPL Montana spokesman David Hoffman said it would take two years to build the “bag house” containing the filters, and the company decided that with power markets expected to stay low, the cost didn’t pencil out.

The company announced Sept. 20 it would mothball the plant in 2015, when the EPA regulations take effect. Hoffman says PPL wanted to give the 35 workers and the Billings community time to plan for the closure.

The plant has a $2.9 million annual payroll, pays $5 million a year to outside vendors for maintenance and other services, and pays $1.8 million a year in property taxes, Hoffman said.

Two of PPL Montana’s coal-fired power plants at Colstrip already meet the new EPA standards, because they have newer pollution control equipment, and the two other Colstrip plants should be able to with an upgrade, he said.

“We’re still examining the technology right now,” Hoffman said of the Colstrip plants. “You have the economy of scale at Colstrip, as well.”

Colstrip has 2,000 megawatts of generating capacity, or nearly 13 times that of the 44-year-old Corette plant.

Dave Klemp, chief of the state Air Resources Management Bureau, said the new EPA rules regulate mercury and numerous “air toxics” produced by coal-fired power plants. The state is the primary enforcer of the EPA rules.

Montana already has its own, relatively strict mercury standard, so plants here have only the air toxics to worry about. EPA gives plants three years to comply with the rule, and plants can ask for a one-year extension, until 2015.

Klemp said no Montana plant owner, including PPL, has spoken yet to state regulators about complying with the rule.

“Some may not have to do anything in order to comply,” he said. “They may have existing controls that are adequate. … Generally speaking, the companies come in and talk to us about what their requirements are and their obligations.”

***

The standards stem from a 1990 amendment to the Clean Air Act, in which Congress listed 189 air pollutants that must be controlled. EPA began imposing regulations for these pollutants for many industries, but the utility industry successfully resisted and escaped them for many years.

A 1999 EPA report to Congress said power plants are significant emitters of these pollutants. But under President George W. Bush, the EPA exempted power plants from the congressional regulations and devised new ones of its own.

Fifteen states – Montana wasn’t one of them – sued to invalidate EPA’s actions. In February 2008, the U.S. Circuit Court of Appeals in Washington, D.C., said EPA had illegally exempted power plants from the 1990 amendments.

Under President Barack Obama, the EPA began working on rules for power plants and released them in November 2011.

When asked this week which air pollution rules he would support for power plants, Rehberg wasn’t specific, but said the EPA should back off on its current rule and consider ones that might be more flexible for different types and ages of plants.

Hedges, of MEIC, said the rules are long overdue, and that the utility industry has avoided them purely on “raw political power.”

“These regulations have been on the books for so long; industry has known about them,” she says. “This (controversy) has nothing to do with politicians today. It has to do with a history of wanting to clean up the air and protect the public.”

Missoulian State Bureau reporter Mike Dennison can be reached at 1-800-525-4920 or at mike.dennison@lee.net.

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(7) comments

detonate

If Tester loses it will be because of Obamacare. Our household insurance is through my wife who works for a large national company. Our situation is the same as many years past. We're going up 25% on January 1. I'm sure it's no coincidence these announcements are ahead of the election. This is by far best Rehberg's best play in the election.

George W Hayduke
George W Hayduke

The earth is not a mechanism but an organism, a being with its own life and its own reasons, where the support and sustenance of the human animal is incidental. If man in his new found power and vanity persists in the attempt to remake the planet in his own image, he will succeed only in destroying himself — not the planet. The earth will survive our most ingenious folly.

Scoop

I love how the press constantly comes to the defense of liberals like Tester, Bullock and Obama, parsing the data to present that they are somehow mainstream. A friend sat next to him at an event and he ranted about every liberal hair-brained idea until he found out the table was full of business people- then he changed his tune. Anyone thinking that Tester supports the use of coal is kidding themselves. He is bought and paid for my the extremes environmentalist movement. His whole seven years was a series of votes against main street businesses and for big government control.

bigdady

As Jon would say JOB JOBS JOBS, DENNYsays need more ice and Hey watch where your driveing my boat

montanamuralist
montanamuralist

Oh gosh, why protect the public?? And if power wholesale is so cheap my question for Rehberg is when is that going to translate to lower energy bills for the consumer??? My energy bill. Oh and Rehberg opposed Heating Assistance for seniors last year??? Again!!! Hmmmmm Denny can't tell you what rules he wants changed cause he probably does not know the rules. Long overdue protection against carbon emissions and clean air seems reasonable to me since I breath air. I am sure the right wing teabaggers will hate it and use this as an example of how we need more jobs, even though it might kill some people. Good thinking loons... Must be why that Bachmann clone Rehberg is your choice!

badair

Please don't forget to pressure the Montana Land Board to vote "NO" on the Arch coal export proposal whenever it comes up again. Shipping coal to China is seriously lame.

science is cool, global warming isn't

Roger
Roger

Your profundity is simply astounding (sarcasm alert). Obviously you have no clue as to how science works, and you write as if you're addressing, say, sixth-graders.

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