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Draft rule reduction: 21.1% (475 lbs CO2 / MWh)

Editor's note: The following summary represents state and utility stances after the Supreme Court stayed the Clean Power Plan in February 2016.

Montana's elected and state officials were united in their disappointment in the final rule, which requires much more of the Big Sky State than the draft version. Under the draft rule, Montana was supposed to cut its carbon emissions rate by 21 percent.

Before the Supreme Court stay was announced, Montana Gov. Steve Bullock (D) called the final rule "unfair to the people of Montana," but he said the state would still develop "a Montana-based solution" and develop a compliance plan to submit to U.S. EPA.

After the stay, Bullock announced the state's Interim Clean Power Plan Advisory Council's work is "on hold." He cancelled its first meeting, originally scheduled for late February. The Montana Legislature's Clean Power Plan Subcommittee also announced it would halt work.

The state relies heavily on coal and hydropower, and it is home to the nation's second-largest coal facility, in Colstrip. It was among a coalition of 24 states that filed a lawsuit challenging the rule when it was published in the Federal Register.

To comply, experts say Montana would either need to retire major coal capacity and replace it with carbon-free or lower-carbon sources or participate in some form of carbon trading.

In a draft letter to EPA, the Legislature's now-disbanded 111(d) subcommittee in January expressed its support for Montana's legal challenge of the rule, adding that "while the EPA claims to give states flexibility in complying with the plan, it may be impossible for states like Montana to reach their goal without depending on credits from other states."

EPA's final rule addressed a number of concerns Montana expressed with the draft rule -- including instituting a reliability safety valve and giving more guidance on how states can trade compliance credits -- according to an analysis by the Montana Public Service Commission.

The PSC noted in its analysis how specific unit retirements might help Montana reach its goal. Montana was still 2.1 million tons of carbon short of its goal when combining across-the-board heat-rate improvements, the planned retirement of the Corette power plant and the retirement of two units of the Colstrip plant.

"Again, these scenarios are illustrative, intended to characterize the magnitude of Montana's compliance challenge, not to suggest a compliance strategy," the analysis states. "Montana, as most states, will probably strive to produce a plan that blends numerous policies and resource decisions over a span of 15 years to comply with the rule, and it's impossible to say at this time how such a plan will affect any particular existing generator."

NorthWestern Corp., the state's largest utility -- which also owns a stake in one of the units in the Colstrip coal-fired plant -- is challenging the Clean Power Plan in court. It commissioned a controversial analysis of it in 2015 that concluded the rule is "the most significant economic event to occur in Montana in more than 30 years."

Montana's environmental groups applaud the plan and are urging the state to ramp up its use of renewable energy to comply.

"Renewable energy resources like wind are a proven, cost-effective solution to reduce carbon emissions," said Jeff Fox, policy manager with Renewable Northwest. "Montana's diverse and energetic wind resources can help the state and region meet new carbon reduction requirements."

Last updated on February 2, 2017 at 11:59 AM

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