Talen Energy Supply (TES) said it plans to acquire Puget Sound Energy’s stake in the coal-fired Colstrip Power Plant in Montana.

Under terms of the agreement, TES would assume PSE’s 25% share in Colstrip Units 3 and 4, totaling approximately 370 MW, at the end of 2025. The independent power producer already owns 30% of Unit 3 and operates the plant.

PSE would retain its share of environmental remediation and other asset retirement obligations, decommissioning costs and other appropriate costs accrue through December 31, 2025.

The acquisition is part of a larger decarbonization strategy, as Talen plans to develop a utility-scale wind farm nearby. The 600 MW Silverthorn project would be sited in Rosebud and Treasure Counties and interconnect at the Colstrip substation.

The Silverthorn project is part of a joint venture between TES affiliate Cumulus Renewables and Pattern Energy. Pending approval, it could enter service in 2026.

Pattern Energy owns and operates wind projects all over the U.S. In January 2022, the company completed construction of four separate wind farms collectively known as the Western Spirit Wind Project. The 1,050 MW project was built in three Central New Mexico counties and combined becomes the largest in the state.

The transaction involving Colstrip Units 3 and 4 is subject to a 90-day review and approval by the U.S. Bankruptcy Court for the Southern District of Texas. Talen Energy Supply and its affiliates filed for chapter 11 bankruptcy on May 10, 2022.

Colstrip coal-fired units 3 and 4 can produce up to 1,480 MW of electricity combined. Units 1 and 2 were retired in January 2020.

Other owners of the plant include Portland General Electric Company, Avista, PacifiCorp and NorthWestern Energy.

The future of the Colstrip plant is murky. Washington utilities like Puget Sound Energy are expected to exit coal by 2025, based on current state policy. Oregon has no operating coal plants.

Bankruptcy court filings detail a dispute between NorthWestern Energy and the other Pacific Northwest owners of Colstrip – Avista, PacifiCorp, Portland General Electric and Puget Sound Energy, about whether unanimous ownership support is needed to shut down the plant.

According to the filings, the latter four remain committed to closing the facility by 2025 as reiterated in letters from November 2020, December 2020, and January 2021.

According to court documents, representatives for NorthWestern Energy said it “relies upon the operation of the Colstrip units 3 and 4 in order to meet its duties and obligations as a regulated public utility.”

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