- Associated Press - Thursday, October 29, 2020

SEATTLE (AP) - A deal to sell Puget Sound Energy’s stake in one of the four generating units in Montana’s Colstrip coal plan has fallen through.

In announcing the deal in December, PSE said the sale of generating capacity in Colstrip Unit 4 to NorthWestern Energy and Talen Montana would help them meet a 2025 deadline to have a coal-free energy supply.

But the transaction, which also included the sale of PSE’s interest in a Montana transmission line, needed the approval of the Washington Utilities and Transportation Commission. And its staff this month recommended the sale be rejected because PSE had not shown this was the lowest, reasonable cost option for meeting the requirements of the Washington law to have a coal-free energy supply by 2025, The Seattle Times reported.

Colstrip’s two older, smaller units - 1 and 2 - owned by PSE and Talen Montana shut down earlier this year.

Under the terms of the sale, PSE would have sold its ownership in Unit 4 and then bought back some power from the unit until 2025, while continuing to hold a stake in Colstrip’s Unit 3.

PSE and the other companies must develop a new plan for what happens after 2025.

“It became increasingly evident that there was enough opposition or misplaced opposition to this transaction that it necessitated withdrawing the application at this time,” said Janet Kim, a PSE spokeswoman. “PSE wants a solution and we want to get off coal as quickly as possible. We remain no less committed to this and will immediately return to the negotiating table to explore options with the other owners.”

NorthWestern, which provides electricity in Montana, said that the sale would have addressed a “critical capacity shortage” when power demand is high and called the cancelation a “huge loss for Montana and our customers.”

Colstrip, in southeast Montana, has strong political support in the state, and in the community of Colstrip, which has relied on the plant’s jobs.

But the facility has been buffeted by changing energy markets as natural gas, wind and solar power have ramped up generation.

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