Judge asks if Colstrip laws pass federal rally | Montana News

What-if questions came from all directions as a roomful of lawyers explained what the Montana Legislature meant when it passed laws rewriting a 40-year-old contract governing two aging Colstrip power plants.

Federal magistrate Kathleen DeSoto rarely let attorneys for Talen Energy, NorthWestern Energy, Montana State Attorney General Austen Knudsen or a phalanx of energy companies in Washington and Oregon get more than a page in their binders. before sorting out their claims.

What if the 1981 contract between six co-owners of Colstrip Units 3 and 4 were changed, so disputes had to be settled in Montana instead of Washington? What if Montana orders private companies to continue supporting a declining coal-fired power plant even though those companies’ states have banned coal-burning investment? What if one attorney general promises not to use powerful new laws favoring Montana, but the next one breaks the deal?

In particular, DeSoto questioned why Talen thought it was possible for the court to rewrite state law to clarify vague but powerful sections giving Montana the power to fine condo owners hundreds of thousands of dollars. of Colstrip for withdrawing from their partnership. She also questioned how Colstrip’s defenders thought a law forcing outside companies to take big business losses to benefit Montana interests was not “economic protectionism” specifically prohibited by the interstate commerce clause of the law. American Constitution.

Majority owners Puget Sound Energy, Avista Corp., PacifiCorp and Portland General Electric have all announced plans to exit Colstrip by the end of 2025. This has made them uninterested in investing in Colstrip’s future.

Power plants have major problems. Boiler damage in Unit 4 cost $20 million in repairs in 2019. And a recent investigation found Units 3 and 4 malfunctioned for 77 days in 2018. Both units were offline again for an in-depth interview in the spring of 2021.

The 2021 Legislature passed two laws, SB 265 and SB 266, that changed the way management disputes are resolved over Colstrip’s operations. SB 265 rewrote the arbitration section of the 1981 contract, requiring the hearings to be held in Montana instead of Washington and changing the types of arbitrators who would decide the hearings. SB 266 gave Montana’s attorney general the power to impose $100,000-a-day fines on any homeowner who blocked attempts to fix Colstrip’s aging power plants or cut its budget.

Talen’s attorney, Robert Sterup, proposed that the easiest solution is for DeSoto to interpret the laws from the bench. So where the law said Montana AG could impose fines for “conduct” injuring Colstrip, the court could clarify that this did not include pleading to stop paying Colstrip’s bills.

“It’s rewriting the law, I would say,” DeSoto replied. The legislature was in a much better position to write down exactly what that meant in law, she said, rather than leaving it up to a judge to define it.

Steup countered that judges are also expected to do whatever they can to resolve cases without ruling on state or federal constitutions. In other words, if there is a simple solution that does not involve the interpretation of a constitutional clause, the judge should take it. He suggested that DeSoto adding his own definition of “driving” would.

Harry Wilson, lead attorney for the owners in the Pacific Northwest, said the lack of clarity made it difficult for the Washington and Oregon utility co-owners to know what the rules of the agreement were. He was particularly critical of the lack of response from Attorney General Knudsen’s office, which did not tell the court how it intends to handle its enforcement power over fines or the arbitration process.

The Colstrip community itself was not part of the contract, but is in the lawsuit as a friend of the court. Colstrip attorney Michelle Sullivan argued the laws were necessary to preserve Montanans’ access to reliable power.

“I represent people that it will have an impact if Colstrip becomes a ghost town,” Sullivan said. “The legislature wasn’t punishing PNOs (Pacific Northwest landowners) – it was guaranteeing access to coal-fired electricity.”

“Isn’t that the definition of economic protectionism? DeSoto shot back. “It’s a really bad deal, but does it help us?”

U.S. District Judge Susan Watters has already imposed a preliminary injunction blocking both Montana laws. DeSoto’s magistrate hearing on Tuesday was intended to flesh out arguments why Watters’ decision should not be permanent and the laws taken off the books.

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