Avista Corporation agreed this week to trade its interest in the Colstrip coal-fired power plant in Montana to NorthWestern Energy on Dec. 31, 2025, granting the latter ownership of the 222 MW generating capacity therein and all its equipment, rights, and obligations.
In its most recent integrated resource plan (IRP), Avista determined that Colstrip would no longer be an economic investment for its Washington and Idaho customers after 2025. Avista Utilities – an operating division for electric services under Avista Corp. – provides services to 403,000 customers and natural gas to 369,000 more in Washington, Idaho, and Oregon. Instead, its parent corporation will pivot to more reliable and cost-effective resources, particularly ones allowed under Washington’s Clean Energy Transformation Act. Avista will retain rights to the Colstrip transmission system, though, so it will be able to leverage capacity from it for future renewables projects.
“This transaction is the result of several years of work and discussions among all owners of Colstrip, through which we have looked for commercial solutions that would allow Avista and others to exit Colstrip by the end of 2025 while also meeting the needs of other owners and stakeholders, including NorthWestern and the state of Montana,” Jason Thackston, Avista’s senior vice president and Chief Strategy & Clean Energy Officer, said. “Avista has been in Montana for decades and will be in Montana long after its exit from Colstrip is completed; thus, it was important to us that any agreement regarding Colstrip address the needs of Montanans in addition to the needs of our customers and the interests of the states we serve.”
Under the new arrangement, Avista will still have remediation obligations to Colstrip and undertake a vote-sharing agreement with NorthWestern to maintain any voting rights regarding decisions linked to remediation activities. In return, NorthWestern will be able to utilize Avista’s vote for capital expenditures made between now and 2025. However, Avista’s contribution to any related expenditures would be limited to its pro rata share in the interim and the least-cost alternative available.
While the agreement has been reached between NorthWestern and Avista, it’s not yet guaranteed. Under the Colstrip Ownership and Operating Agreement, each site owner will have 90 days during which they can evaluate the agreement and opt to allow or refuse a portion of generation given to NorthWestern.
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