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A Blow to Big Coal in Montana

This week’s announcement that plans for the coal-fired Highwood Generation Project in Great Falls, Montana were being deferred was good news for the environment. Coincidentally, it came on the very same day that Montana’s Nobel Laureate, University of Montana climate scientist Steven Running, was addressing the Montana Legislature on global climate change. What’s puzzling is why certain Republicans continue to deny science, direct evidence and economic realities in their endless quest to blame environmentalists and burn more coal.

The Highwood project was, in many ways, doomed from the start. First, it was a coal-fired plant trying to come online during a period of significant concern over the effect emissions from such plants were having on atmospheric concentrations of carbon dioxide (CO2), a so-called “greenhouse gas,” and their relationship to global climate change. Since coal-fired power plants are one of the largest contributors to atmospheric CO2, it’s not surprising that any proposed new plant would receive considerably more scrutiny than similar operations garnered in the past.

The options for dealing with large CO2 emitters have been debated for years now. Cap and trade schemes, for instance, would “cap” emissions at current levels and require industrial facilities that wanted to emit more CO2 to trade with less-polluting facilities. Then there’s the direct carbon tax, where a per ton fee for emitting CO2 would be assessed to facilities that produce the pollution in hopes that economic forces would eventually turn toward cleaner energy sources. Considering coal-fired plants typically emit millions of tons of CO2 during their operational life, even a small fee would obviously constitute a significant economic incentive.

The problem, at least for Highwood’s backers, is that none of the CO2 control options have been adopted into law. Hence, uncertainty plagues the coal-fired energy sector and particularly those seeking new loans to build and operate such facilities. In Highwood’s case, the project’s first death knell sounded when the Rural Utility Service (RUS), a federal agency that makes large loans to fund utility projects, rejected Highwood’s application for nearly $600 million to build the plant. Adding another nail in Highwood’s coffin was the skyrocketing cost of construction materials that eventually doubled the estimated project total from $456 to $900 million.

But that wasn’t the only problem. Highwood’s huckster-in-chief, Tim Gregori, tried to talk several Montana municipalities into jumping on the coal-fired bus, promising lower rates for the electricity it was supposed to eventually produce. Those promises, as it turned out, were based on the original cost estimates of the plant and the expected RUS loan, and didn’t factor in any potential additional costs associated with new carbon taxes or pollution control measures. Missoula, much to its credit, did not fall for the scheme and rejected the offer, as did Helena and Bozeman. While cost uncertainties played a major part in the decision, the concern over the increasing impacts of global climate change-and the plant’s considerable input to same-proved a motivating factor in the rejection by municipal officials.

As the economic collapse picked up steam last year, Highwood’s backers, a collection of smaller utility co-ops who joined together to develop the project, began to jump ship. The rapidly mounting costs had already drained millions of dollars from the co-ops to achieve basically nothing and the future looked to hold more of the same. Yellowstone Valley Electric Cooperative estimated it spent between $7 and $8 million on the project before it decided to pull out of the venture and was eventually forced to turn to the courts for relief, seeking not only recompense for its investment and damages, but also a return of the cheaper power the co-op had enjoyed from the Western Area Power Administration. That lawsuit, and its effect upon the future of the Highwood venture, remains a burden going forward.

Finally, there were numerous other problems with the Highwood project. A group of local Great Falls residents formed Citizens for Clean Energy to oppose the plant and, with tremendous help from the Montana Environmental Information Center, fought hard at every turn to ensure that the plant’s operating permits contained the most advanced technical pollution control measures available. One of those, the control of very tiny particulates that constitute significant human health hazards because they can be inhaled directly into the lungs, marked the first time such regulation was required of any power plant in Montana. Plus, the Army Corps of Engineers withdrew a key federal building permit because of the plant’s proximity to the trail Lewis and Clark used to portage around the Missouri River waterfalls-a National Historic Landmark.

Highwood’s developers say they will now seek to build a smaller, 250-megawatt natural gas-fired plant augmented with six megawatts of wind power. But even this proposal, while considerably cleaner than a coal-fired plant, remains uncertain. Funding for large construction projects has been very difficult to obtain since the financial collapse. Plus, natural gas prices tend to fluctuate rapidly and often radically. How those costs will accrue to the co-ops has yet to be revealed. But recent rate increases are already raising the hackles of the co-ops’ ratepayers.

Given the well-documented series of events that led to Highwood’s apparent demise, what’s puzzling is why certain key Republicans in the Legislature seem intent on blaming environmentalists and what they call a “flawed permitting process.” Protecting Montana’s environment, after all, is what every legislator promises to do when they take office and swear to uphold Montana’s Constitution. Article IX, Section 1 states: “The state and each person shall maintain and improve a clean and healthful environment in Montana for present and future generations.”

Maybe, instead of trying to trash what’s left of our environmental laws, these throwbacks to the past should read our Constitution, remember their oath of office, and put the blame for failed industrial projects like Highwood right where it belongs-on those who tried to sell us a poorly planned, poorly conducted, dirty energy project and then failed through their own incompetence.

GEORGE OCHENSKI writes from Helena, Montana. He may be contacted at: ochenski@mt.net.

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George Ochenski is a columnist for the Missoulian, where this essay originally appeared.

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