Clean Power Plan Likely to Cost Montana Thousands of Jobs

The impacts of the Obama Administration’s so-called “War on Coal” appear set to hit in Montana unless the state can implement a plan for “clean power” that complies with new EPA rules without closing the Colstrip Power Plants.

The University of Montana Bureau of Business and Economic Research (BBER) released a study yesterday on potential impacts to Montana of the EPA’s Clean Power Plan. According to BBER, Montana is set to lose more than 7,000 jobs by 2025. Eastern Montana is the hardest region hit, losing a full 7 percent of its current jobs. The economic hit is largely due to the likelihood that the rule will force the closure of the Colstrip Power Plants, the largest coal-fired power facility in the state and one of the largest in the Western United States.

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Graphic: UM Bureau of Business and Economic Research

According to the study’s summary of findings:

  • “The state economy suffers a job loss of more than 7,100 jobs, reflecting not only the regular and contractor jobs at all four units of the Colstrip generation facility, but also the neighboring coal mine, as well as the local government jobs supported by the significant property tax bills those facilities pay, and all of the changes elsewhere in the economy that result from those losses;
  • “incurs a loss of over $500 million in annual income received by Montana households, which is made larger by the fact that the jobs lost due to 111(d) pay well in excess of the Montana average;
  • “realizes a loss of more than $1.5 billion in gross output (sales) by Montana businesses and other organizations, as Montana swings from being a state with significant energy exports to a state that must rely on imported power from other states and regions in periods of heavy load or during generation curtailments;
  • “ultimately realizes a decline in population, particularly in working-aged families and their children, as economic opportunities in our state worsen relative to other states.”

BBER also projects that every region of Montana will lose jobs due to the CPP, with Eastern Montana taking the hardest hit if the Colstrip plants cannot be saved. The jobs are also mostly high wage jobs, earning an average of $66,000 a year.

“The more than 4,000 jobs lost in eastern Montana counties as a result of 111(d) comprise almost 7 percent of all jobs in the region, and two thirds of the decline in output that occurs statewide is incurred by businesses and other organizations in the eastern 14-county region of the state,” the study states.

The new carbon emissions regulations on power plants are being implemented under Rule 111(d) of the Clean Air Act, which requires states to create performance standards for carbon dioxide emissions from existing power plants and then submit those plans for approval from the EPA. Montana faces one of the largest required reductions in emissions of any state. Montana must reduce its total carbon output for electrical generation from 17,924,535 short tons in 2012 to 11,956,908 short tons by 2030. The amounts a 33 percent reduction in carbon emissions from power generation.

The carbon intensity of power generation in Montana — measured in pounds of carbon per megawatt hour — would be cut by the final rule from 2,481 lbs/MWh in 2012 to 1,305 lbs/MWh in 2030, a decrease of about 48 percent.

Coal proponents have called BBER’s findings “devastating.”

“​Forcing Colstrip to shut down results in massive job losses for Montana, it would simply be devastating for communities across Montana,” said Bud Clinch of the Montana Coal Council in a statement. “If Governor Bullock’s implementation plan fails to save Colstrip, Montana would lose over 7000 jobs in the next 10 years—Montanans simply can’t afford a hit like that.”

The fate of the Colstrip plant will now depend largely on the state’s implementation plan to bring Montana into compliance with the CPP. Democratic Gov. Steve Bullock announced last week that he was putting together a “Clean Power Plan Advisory Council” that would “gather information and provide recommendations on policies and actions necessary for the State of Montana to keep control over its energy future, protecting Montana’s economy and quality of life,” while still allowing Montana to comply with the CPP.