RELEASE: The Economic Impact of the Early Retirement of Colstrip Units 3 and 4

Jun 25, 2018|News Alert, Press Release

HELENA–– During a press conference in the Montana Capital on Monday, the Montana Chamber Foundation announced the results of a commissioned study on the impact of the early retirement of Colstrip’s units performed by Dr. Patrick Barkey from the Bureau of Business and Economic Research (BBER) at the University of Montana.

The study finds that communities across the state have been heavily reliant on the “outsized tax contributions of the coal industry to the revenue base of state government,” and the entire state has a stake in the outcomes affecting Colstrip. During the study, BBER evaluated the implications for the
state economy if circumstances caused the premature closure of Units 3 and 4 at the Colstrip Steam Electric Station, as well as the adjacent Rosebud Mine. Specifically, the report examined the consequences for jobs, income, population, economic output and other measures of economic activity
to the state economy in the event that Units 3 and 4 were to shut down in 2027.

Some of the findings included:

  • Estimated statewide loss of 3,300 jobs, wages considerably above the state average
  • Anticipated income loss of between $250 and $350 million per year or $5.2 billion over the 16-
    year period covered by the research
  • Decline in annual gross sales and economic output of between $700 and $800 million or $12.5
    billion over the same 16 year period
  • Expected loss of $80 million in state tax and non-tax revenues per year, or $1.2 billion over the
    same 16-year period

BBER estimates that Montana’s special taxes on energy and natural resources make the tax impact of Colstrip and the mine’s early closure at least a third larger than they would be on a non-energy related business.

“The goal of the analysis is to provide information regarding the contributions of Colstrip and the Rosebud coal mine to the state of Montana and the associated impacts to the state’s economy if the power plant was to be prematurely retired,” said Barkey. “The data clearly demonstrates that there
would be a considerable economic cost in terms of jobs, income, spending, and tax revenues.”

The study also examined the impact to individual consumers and businesses in Montana. The data shows that there would be an increased cost to Northwestern rate payers, as well as to large commercial and industrial customers due to the elimination of price discounts currently available to
Montana based commercial businesses.

This research is intended to provide decision makers measurable data associated with the economic value Colstrip represents for the entire state. This study shows the importance of the continued investment in workforce development, a core objective in the Montana Chamber’s 10-year strategic plan, Envision 2026. For details on the study, you can read the executive summary here and the full study here.

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ABOUT THE MONTANA CHAMBER FOUNDATION
Our mission is to educate Montanans about the fundamentals of business operations, business needs
and responsibilities and contributions of business to society.
The Foundation promotes and improves the economic development opportunities of the state and its
communities b y participating in educational projects and research.
If you are interested in donating to the Chamber Foundation, click here.

June 25, 2018
Media Contact: Communications Director Alexandria Klapmeier
(C) 406-437-4634 or Alexandria@MontanaChamber.com

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