June 11, 2019 / 6:23 PM / 6 months ago

Talen to retire two units at Montana Colstrip coal plant early

June 11 (Reuters) - Talen Energy said it will retire two units at its Colstrip coal-fired power plant in Montana at the end of 2019 for economic reasons.

That planned retirement is about two and a half years earlier than previously expected. In the past, Talen said it planned to shut Colstrip Units 1 and 2 in mid-2022.

The units are two of dozens of coal plants expected to shut this year as cheap natural gas from record shale production has kept electric prices low in recent years, making it uneconomic for some generators to continue operating older, less efficient coal plants.

“We have been unsuccessful in making the units economically viable,” Dale Lebsack, Talen Montana president, said in a release.

“Fuel constitutes the bulk of our operating cost, and our repeated efforts to negotiate lower fuel prices with Westmoreland Rosebud Mining, the plant’s sole and only historically permitted fuel supplier, have been rebuffed,” Lebsack said.

“Rather than working with us to keep Units 1 and 2 open, Westmoreland is proposing to increase the units’ fuel cost going forward,” Lebsack said.

Officials at Westmoreland Coal Co, which emerged from bankruptcy protection earlier this year, were not immediately available for comment.

Privately held Talen owns half of Coldstrip 1 and 2. The other 50% is owned by privately held Puget Energy’s Puget Sound Energy unit.

The total capacity of Units 1 and 2 is 614 megawatts. One megawatt can power about 1,000 U.S. homes.

Talen said the two other units, 3 and 4, at Colstrip will remain in service.

Reporting by Scott DiSavino; Editing by Lisa Shumaker

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