The impact of the premature closure of Colstrip Plants 3 and 4 is of just as much consequence to everyone in the state as it is to the citizens of Colstrip, finds a study regarding the economic impact of the coal-fire electrical plants.
During a press conference in the Montana Capital on June 25, the Montana Chamber Foundation announced the results of a commissioned study on the impact of the early retirement of Colstrip’s units performed by Dr. Patrick Barkey from the Bureau of Business and Economic Research (BBER) at the University of Montana.
The study finds that communities across the state have been heavily reliant on the “outsized tax contributions of the coal industry to the revenue base of state government,” and the entire state has a stake in the outcomes affecting Colstrip. During the study, BBER evaluated the implications for the state economy if circumstances caused the premature closure of Units 3 and 4 at the Colstrip Steam Electric Station, as well as the adjacent Rosebud Mine. Specifically, the report examined the consequences for jobs, income, population, economic output and other measures of economic activity to the state economy in the event that Units 3 and 4 were to shut down in 2027.
Some of the findings included:
* Estimated statewide loss of 3,300 jobs, wages considerably above the state average
* Anticipated income loss of between $250 million and $350 million per year or $5.2 billion over the 16-year period covered by the research
* Decline in annual gross sales and economic output of between $700 and $800 million or $12.5 billion over the same 16 year period
* Expected loss of $80 million in state tax and non-tax revenues per year, or $1.2 billion over the same 16-year period
BBER estimates that Montana’s special taxes on energy and natural resources make the tax impact of Colstrip and the mine’s early closure at least a third larger than they would be on a non-energy related business.
“The goal of the analysis is to provide information regarding the contributions of Colstrip and the Rosebud coal mine to the state of Montana and the associated impacts to the state’s economy if the power plant was to be prematurely retired,” said Barkey. “The data clearly demonstrates that there would be a considerable economic cost in terms of jobs, income, spending, and tax revenues.”
The study also examined the impact to individual consumers and businesses in Montana. The data shows that there would be an increased cost to Northwestern rate payers, as well as to large commercial and industrial customers due to the elimination of price discounts currently available to Montana based commercial businesses.
“While it’s widely known that coal plays a key role in our economy, what stands out in this study in the broad economic impact that the closure of Colstrip Units 3 & 4 would have outside of coal country,” said Chuck Denowh, spokesperson for Count on Coal Montana. “The revenue generated from coal helps people in every corner of our state by helping to fund local infrastructure, schools, and critical services. We need to do everything we can as a state to support the continued development of our abundant coal resources and Colstrip Units 3 & 4”
Said Richard Dunbar, Chair of the Montana Association of Oil, Gas, & Coal Counties. “Oil, gas, and coal revenue all play a critical role in ensuring local governments have sufficient funding to support our schools and critical services for our communities. This study confirms what many already knew–that coal is critical to the lives of many Montanans and without it many counties will be left with to deal with large budget shortfalls. long into our future.”
“Montana can’t afford to lose 3300 jobs. Keeping Colstrip open is vital to the public interest. We’ve applied that standard in past cases concerning Colstrip, and this study bears that out. I’m personally committed to making sure Montana gets the maximum useful life out of Colstrip units 3 & 4,” said Public Service Commission Chairman Brad Johnson.