CAMPAIGN 2012:

Mothballing of coal plant could boost Rehberg in tight Mont. Senate race

BILLINGS, Mont. -- A small coal plant on the banks of the Yellowstone River here has become a political grenade in the increasingly testy race between Democratic Sen. Jon Tester and his Republican challenger, Rep. Denny Rehberg, who yesterday launched a fresh round of ads blaming the incumbent for supporting pollution controls that could lead to the plant's demise.

The new ads could resonate in Billings, a major energy hub serving eastern Montana's Bakken oil boom and coal from the Powder River Basin. And for the vote-starved candidates, Billings -- the state's most populous city -- offers a political treasure trove.

There are roughly 94,500 registered voters in Yellowstone County, more than any other in the state, according to the Montana secretary of State. In 2006, about 57 percent of those who voted for a major party here picked then-Sen. Conrad Burns (R) over Tester.

"I think the Rehberg ads are unusually effective in eastern Montana, including Billings," said former Rep. Pat Williams (D-Mont.), who is an emeritus professor at the University of Montana in Missoula.

For decades, the city has ridden the booms and busts of oil, natural gas and coal development, Williams said. It currently finds itself riding high.

"When times are good, they're very good and when times are bad, they're really difficult," he said. "I suspect Tester is getting hurt real bad there right now."

It's hard not to think about energy in this town, where an average of 15 trains pass through downtown each day, about one-third of which are coming from or going to the Powder River Basin, according to the Billings Gazette.

From the barbed wire fence surrounding PPL Montana's J.E. Corette plant, the whir of a ConocoPhillips oil refinery can be heard across Interstate 90.

"This is one of the top issues of the campaign for Billings-area voters," said Chuck Denowh of Count on Coal, a group based in Helena that advocates for railroads to open new markets for Montana coal. "People are pretty upset with Senator Tester for allowing these regulations to move forward."

The coal plant was also featured in a front-page article in yesterday's Billings Gazette.

Rehberg for weeks has hammered Tester for opposing in June a Republican bid to block U.S. EPA regulation of coal plants to curb mercury, a known neurotoxin, and other toxic emissions. PPL Montana in mid-September announced plans to mothball its 154-megawatt plant, citing the cost of complying with the new EPA regulations, known as Utility MACT, which would go into effect in 2015.

"Tester voted for President Obama's job-killing EPA regulations that are causing a coal-fired Billings power plant to close," Rehberg says in a new TV ad that began airing yesterday statewide. "I voted against Obama's regulations, because clean coal means good-paying jobs for Montanans, and millions to our communities, school systems and families."

Rehberg on Tuesday took the message to voters in Great Falls at a campaign event and business roundtable at the Best Western Plus Heritage Inn.

"Voting with the unelected bureaucrats at the EPA on something that he knew was going to cost jobs and shutter a facility -- and just as importantly, it would have, it will, it does create enough electricity for 100,000 households -- that's like all of Great Falls being shut off," Rehberg said. "And so it doesn't make sense."

Tester yesterday fought back against the attacks, blaming Rehberg for supporting a company that made $1.5 billion in profits last year and chose to build power plants overseas instead of paying the $38 million it estimated it would cost to upgrade the plant. In debates, Tester has argued the EPA regulations have been on the books since the early 1990s but were delayed until a federal appeals court in 2008 decided power plants could not be exempt.

"For Dennis Rehberg to be here protecting a company that outsources jobs, where CEOs get huge amounts of money, is a real disservice for Montana," Tester said yesterday following a rally with volunteers at his campaign's Billings field office. "We ought to be fighting for Montana, and he's not doing it at all. In fact, he's empowering the people who want to send jobs out of the state."

Tester's camp also noted that the low price of natural gas has forced the mothballing of coal plants across the country -- an economic pinch PPL has acknowledged -- and that the Corette plant shut down for four months earlier this year due to a lack of demand.

In addition, Tester said the timing of the plant's announcement is suspicious, coming within 50 days of the election and three years before operations at the plant were to cease. A Tester aide said letters from PPL indicate its chief concerns were not mercury rules, but rather regional haze.

An aide to Sen. Max Baucus (D-Mont.) yesterday said the company had been meeting on a weekly basis with the senator for the entire year but had never mentioned its plans to shutter the plant.

A PPL spokesman said suggestions of political timing are "absolutely not true." PPL had to make the decision in September before setting its 2013 budget, because it would have taken two years to build the "bag house" containing the filters needed to comply with the rule, spokesman David Hoffman said. Out of respect for the 35 employees set to lose their jobs, PPL made the announcement early, he said.

"It's unfortunate this has come in the middle of a political debate," he added. "It certainly wasn't the intent."

PPL's People for Good Government political action committee has given $10,000 to Rehberg this political cycle, more than any other Senate candidate, according to the Center for Responsive Politics. The group also gave Tester $6,000.

Energy companies have largely bankrolled Rehberg's campaign with firms including Exxon Mobil Corp., Murray Energy Corp. and Arch Coal Inc. among the congressman's top donors.

The Corette plant's hiatus will be felt throughout the city. It pays employees $2.9 million annually and spends $5 million annually for maintenance and other services, Hoffman said. It provides Montana $200,000 a year in generation taxes and $1.8 million locally in property taxes.

But Williams, the former Democratic congressman, suggested most Montana voters will have little sympathy for the power company.

"Montanans have long understood that our mining, timber and energy economy and companies have tried their best to find a way around two things: energy law and regulations, and property pay and benefits for the workers," he said. "The plant in Billings should have been upgraded a long time ago, but the company did everything they could in the Congress to delay those regulations."

After providing fodder in each of the candidates' past two debates, there is every reason to believe that Corette will prominently feature in the final debate tomorrow in Bozeman.

Tester said yesterday his goal in Bozeman is to dispel what he said amount to "tens of millions of dollars" in attack ads, many of them from third-party groups.

"If you've had a chance to watch much TV, you see what they've got on TV, it's not even remotely accurate of what's going on," he said. "There's a lot of garbage out there, and we just want the facts to get out. If the facts get out, we win."

A survey released Wednesday by Public Policy Polling showed Tester leading Rehberg in the race by 2 points, but other recent polls have put the race at a dead heat.

Tester yesterday took time to rally supporters at his field office in Billings, accusing Rehberg of opposing preventive care and equal pay for women and proposing vast changes to Medicare and Social Security. He poked fun at Rehberg's decision to sue the city of Billings over its response to a fire near his ranch subdivision four years ago, a suit that cost the city $20,000 and which Rehberg last year dropped.

"Montanans appreciate what our emergency services folks do, and when they show up, we could kiss 'em," he said, drawing laughter from about a few dozen in attendance.

Tester last night delivered a brief speech to the Montana Conference on Education Leadership, which included the Montana School Boards Association and Montana Rural Education Association.

The Montana Education Association and the Montana Federation of Teachers, a consolidated labor union, endorsed Tester in January.

Reporter Jennifer Yachnin contributed.

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