Colstrip owners sign 6-year supply agreement with Rosebud coal mine

“This new coal supply agreement will allow Colstrip to continue to provide safe, reliable and affordable energy to meet critical peak demand for NorthWestern Energy’s Montana customers,” NorthWestern officials said in a news release. (MTN News)

The owners of the Colstrip power plant have reached a new coal supply agreement with the owners of a nearby mine, which recently emerged from bankruptcy.

NorthWestern Energy, one of six owners of the plant’s 3 & 4 units, announced Thursday that it had reached a six-year deal with the owners of the Rosebud Mine to continue selling coal to burn at the plant just across the street.

That new deal will take effect Jan. 1 and run through the end of 2025.

“This new coal supply agreement will allow Colstrip to continue to provide safe, reliable and affordable energy to meet critical peak demand for NorthWestern Energy’s Montana customers,” NorthWestern officials said in a news release.

While the new agreement will keep the plant running next year, its long-term future remains unclear. One co-owner, Avista Corp., announced last month it would cut off investments at Colstrip in 2025. Two other owners, PacifiCorp and Puget Sound Energy, have targeted 2027 for exiting the plant.

NorthWestern has been the most bullish about the plant’s stating it could run through 2042.

The remaining co-owners, Portland General Electric and Talen Energy, have not publicly targeted an exit date. The plant’s two older units, 1&2, are slated to close by the end of this month.

The Rosebud Mine has supplied Colstrip with coal for decades, but its future became cloudy when mine owner, Westmoreland Coal, declared chapter 11 bankruptcy in late 2018. The company emerged from bankruptcy in March run by a group of creditors under the name Westmoreland Rosebud Mining.