Colstrip Unit 4 in Montana expected to be offline at least 6 months

On July 1, Colstrip Unit 4, a 740-MW (net) coal unit in which NorthWestern Corp. d/b/a NorthWestern Energy (NYSE: NWE) owns a 30% share (222 MW), tripped off-line. 

Upon initial inspection, damage to the stator/rotor assembly was evident, consistent with a ground fault, said NorthWestern in a July 15 statement. PPL Montana, the operator of the Colstrip power plant, currently is developing a repair schedule. It is expected the unit will remain under repair for at least six months.

Under NorthWestern’s Reciprocal Sharing Agreement (RSA) with PPL, each party equally shares its allocation of the output, as well as the respective costs required to operate, maintain and repair each unit. Therefore the RSA effectively limits NorthWestern’s share of the repair cost for this outage (and any other outage occurring at Colstrip Units 3 or 4) to 15% of the total cost. Also as a result of the RSA, NorthWestern said it will continue to receive a 15% share of the output of Colstrip Unit 3 (about 111 MW at full capacity). 

The estimate for total repair costs for Unit 4 is around $30m, including the labor costs of installing the spare rotor and rewind kit. It is expected that a majority of these costs will be capital costs. NorthWestern’s share of the total capital expenditures is estimated to be about $4.5m. 

NorthWestern Energy has already purchased power to replace the diminished energy from Unit 4 (which is less than 10% of the company’s peak load); therefore, the company said it has adequate power to meet customer needs over the off-line period. The cost related to the replacement power purchases will be included in the monthly electric tracker for proposed cost recovery with a prudency review by the Montana Public Service Commission at the conclusion of the tracker year in 2014.

PPL is required to maintain property damage insurance coverage on behalf of the Colstrip Unit 3 and 4 owners. PPL has notified the insurance carrier of the potential damage claim. If an insurance claim is made, there is a proportionally allocated $2.5m deductible for such an event.

The Colstrip power plant, located east of Billings, Mont., has four coal-fired units capable of producing a total of up to 2,094 MW. Units 1 and 2 began commercial operation in 1975 and 1976, and Units 3 and 4 started in 1984 and 1986. Units 1 and 2 each have about 307 MW of capacity. Units 3 and 4 each have about 740 MW of capacity. Plant co-owners include PPL Montana, Puget Sound Energy, Portland General ElectricAvista Corp., PacifiCorp and NorthWestern Energy. It mainly gets its coal from an adjacent mine of Westmoreland Coal.

NorthWestern Energy provides electricity and natural gas in the Upper Midwest and Northwest, serving approximately 673,200 customers in Montana, South Dakota and Nebraska.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.