A company that pledged at the height of the 2012 election that environmental regulations would shutter its Montana power plant announced Monday it will now invest in pollution upgrades.
In the fall of 2012, PPL Montana claimed it would need to invest $38 million in its coal-fired Billings plant to meet the federal mercury and air toxics standards. The CEO had said they “cannot justify that level of spending.” On Monday, the company announced it will spend $10 million to upgrade emissions controls in an agreement with the state.
Along with other examples in 2012, Republicans used PPL Montana to argue that Democrats pursued a “war on coal.” For instance, then-Senate candidate Denny Rehberg (R-MT) and Sen. James Inhofe (R-OK) highlighted it in campaign stops and ads against incumbent Sen. Jon Tester (D-MT). Rehberg promised to reverse the “job-killing” regulations if elected to the Senate.
Tax credits for wind energy, a booming energy market in Montana, was another target the company cited at the time. But an August SEC filing from the company noted a different narrative: “Current depressed wholesale market prices for electricity and natural gas have resulted from general weak economic conditions and other factors, including the impact of expanded domestic shale gas development.”
As always, economic forces unrelated to regulations have triggered the plant closures. The price of natural gas has dropped dramatically in recent years, meaning that utilities have turned away from coal. With natural gas prices creeping up again, utilities are more willing to keep their coal plants open. Generally, the plants that have closed are also ancient facilities, with an average age of 58 year old.
This plant isn’t evidence of a regulatory “war on coal.” Contrary to conservative wisdom, environmental regulations boost the economy and will translate into up to 135,000 jobs in 2015 alone.
No, this plant is evidence that natural gas is a dubious “bridge” to a low-carbon future. As soon as unsustainably low gas prices started rising, coal generation started rising again, too — from tied with natural gas generation in April 2012 to more than 50% higher than gas generation a year later.
An earlier version of this post indicated this means the company will likely change its decision to close the plant. The company’s government spokesman David Hoffman said it’s highly unlikely this will alter the decision to mothball the plant. “There would have to be some pretty radical changes in the economic environment in order to reverse that mothballing decision,” Hoffman said. “But if it was reversed, this settlement then goes to the S02 emissions in Yellowstone County, and would certainly reduce the amount of S02 put into the atmosphere.” The headline has been changed for accuracy.