Inside Washington State's Messy Breakup With Montana Coal Country

 

 

 

February 23, 2026 - For over half a century, Puget Sound Energy, Washington state’s largest utility, has been intertwined with this company town. Colstrip, Montana exists as we know it today because of the Pacific Northwest’s need for electricity.

This is the coal town that powered the Seattle and Portland metropolitan areas for decades. But this year, for the first time since the Colstrip generating plant came to life in 1975, that flow of coal-fired electrons between Washington and Montana is no more.

Burned by the Pacific Northwest for its climate policies and wary of relying on shifting presidential administrations, the town of Colstrip is now charting its own path forward, intending to remake itself and find financial security.

Washington’s 2019 Clean Energy Transformation Act requires the state’s utilities — primarily PSE, PacifiCorp and Avista — to stop using coal energy or risk steep fines after 2025. Oregon utilities intend to follow by 2030, eschewing a fossil fuel linked to planet-warming emissions and toxic pollution.

CETA also calls for utilities to become greenhouse gas “neutral” by 2030 and have emission-free electricity by 2045 or risk steep fines. As a result, Avista and PSE announced plans to transfer their shares of Colstrip for free to Montana utility NorthWestern Energy.

Severing coal ties between Montana and Washington has been a rocky divorce. Montana’s governor has accused Washington of being “woke” and Washington utilities of bailing without regard for the workers in Colstrip who powered the Puget Sound region for decades.

 

Meanwhile, environmentalists have criticized Washington utilities for being too generous to Colstrip by not doing more to shut down operations and investing in upgrades to keep the plant running into the future as the world experiences severe effects of climate change.

Further complicating the future of coal power in the U.S., President Donald Trump’s administration has thrown lifelines to the coal industry. In December, the Department of Energy ordered a coal plant in Centralia to stay operational weeks before it was set to be closed, confusing and angering state politicians and environmental advocates.

Jack Rosander, a City Council member and former Rosebud Mine production superintendent, said that while he supports renewable resources like wind farms going up in the area, he isn’t sure how Washington state can pull off its planned transition from coal and fossil fuels. With demand increasing and the variability of renewables, he doesn’t see how coal can be excluded from the conversation.

“The Colstrip community is dedicated to providing power. That’s what we do,” Earline Rosander, a retired teacher, said. “That’s the life of Colstrip, and that always has been.”

The Montana coal town linked to Washington

For five decades, Seattle has gotten coal-fired electricity from Colstrip, a small town around two hours east of Billings, Mont. That changed this year when Washington state laws banning utilities from using coal power kicked in.

 

The future of Colstrip 

Jim Atchison is one of this coal town’s biggest boosters. On paper, his job as executive director of Southeastern Montana Development Corp. is to support local businesses.

But with over a hundred interviews and tours with news media in the last five years, he’s been trying out the unofficial job title of Colstrip’s media handler.

These tours show off the amenities that the town’s around 2,100 residents enjoy: 20 miles of bike paths, about 30 parks and a recreational center that boasts pickleball courts, a swimming pool, a basketball court and spin classes. These are all spoils of the property taxes from the coal plant and mine, which have boosted the town’s median income to around $80,000, Atchison said.

It’s not a story often portrayed when outsiders hear about coal, he sighed. Outcompeted by cheaper and newer natural gas plants, and solar and wind resources, coal use has fallen from its late-aughts peak. What has remained instead has been a steady drumbeat of criticism of coal’s climate-warming impacts and pollution of air and water.

Colstrip hasn’t been free of that. Among electricity plants, Colstrip is one of the largest emitters of carbon dioxide in the West and of fine particulate matter in the country, according to data from the U.S. Energy Information Administration and Environmental Protection Agency. In 2008, a group of local residents won $25 million from the plant after they alleged their aquifers had been contaminated by leaking coal ash ponds, which kicked off more regulations. 

In town, the existential anxiety started in 2015, when the Obama administration announced the Clean Power Plan, which threatened the end for the coal plant, Atchison said. Two of the plant’s four units closed in 2020, two years ahead of schedule, which brought property values down. It didn’t help either, of course, when the Pacific Northwest pledged to stop using coal.

 

Despite the tough road, Atchison says the message in Colstrip is one of economic hope — and that’s not just because Trump has pledged to save the coal industry and made moves that have benefited Colstrip.

Since 2017, Atchison and other leaders have been trying to expand the town’s revenue and jobs beyond the coal industry. A large component of the strategy is to refashion the town into a general energy hub, he said.

“We have the workforce, and we have the transmission infrastructure to share that electricity with the rest of the world, or the U.S. anyway,” he said.

Perhaps most exciting has been the plan to build 415 miles of electricity transmission line between Colstrip and North Dakota, which could be one of the first high-voltage power lines to connect the western and eastern electricity grids, according to the Montana Free Press. The new lines could be in operation in 2032 and usher in further development of wind and solar farms, battery storage and small modular nuclear reactors in the area, Atchison said.

Spearheading the nuclear effort is Montana Rep. Gary Parry, who worked in lands, leases and landowner relations at Colstrip’s coal mine before retiring into politics. Parry wears a golden coal pin to meetings across the world, reflecting his belief that with enough maintenance, the Colstrip plant could last long after he’s gone. 

“Everybody knows I’m not giving up on coal,” he said.

However, due to concerns over human-accelerated climate change, (which Parry said he believes is overblown), a declining global appetite for coal and a possible future Democratic president, Colstrip needs a backup plan, he said. That’s why Parry has been trying to get all the paperwork, studies and applications finished to open a nuclear plant in Colstrip as fast as possible.

“I don’t look at the state as being in (a position) where we can be held hostage by the Western states,” he said. 

Is anyone happy about Colstrip?

Washington’s exit from Montana coal country has been all but simple.

The remaining two units of the Colstrip plant were originally owned by six utilities, spread across Washington, Oregon and Montana. Their differences started to come to a head as Pacific Northwest lawmakers contemplated phasing out coal, and the owners faced steep costs to keep Colstrip running.

In a particularly dramatic move, Montana lawmakers passed two bills in 2021 aimed at weakening Pacific Northwest utilities’ control over Colstrip, according to the Billings Gazette. When Montana Gov. Greg Gianforte signed them, he called Washington regulators “woke” with an “anti-coal agenda.” 

While those laws were eventually struck down, a Republican lawmaker remarked at the time that Colstrip was in a bad divorce and Pacific Northwest utilities were “trashing the house and keying up the car on the way out the door.” 

“I don’t know that it was a messy divorce as much as it was a messy marriage,” said PSE spokesperson Matt Steuerwalt in a recent interview.

When the six owners first started their business relationship in the 1970s as the plant was built, the governing documents never anticipated how much their interests would change, he said. The utilities, which have different shares of ownership, specifically disagreed about what it would take to close the plant, according to news reports.

Meanwhile, since 2020, PSE has endured two failed attempts to give away its ownership in Colstrip for virtually free, arguing that Colstrip was a “value-negative asset” due to potential environmental regulations. One attempt was scuttled by Washington regulators and another fell through after one of the Montana owners could not obtain bankruptcy court approval for the deal.

Montana Environmental Information Center Executive Director Anne Hedges is still upset about the deal PSE ultimately struck in 2024 — to give away its shares to NorthWestern Energy, which intends to run the plant until at least 2042, she said. To Hedges, the Pacific Northwest’s legacy will always be the fact that Colstrip is still left running, belching out climate-warming emissions and other pollution. 

“Puget and Avista had the opportunity to close that plant, and they failed. They just flat out failed. They didn’t put the energy into it that it needed,” she said. 

Hedges said the plant is old and more prone to unexpected outages than advertised, and coal workers would be left in a lurch if the plant suddenly closes. It’s also not clear how NorthWestern Energy will use the extra power from Colstrip. The utility wants to put that power toward data centers, according to the Montana Free Press, but Hedges said she is concerned Montana customers will ultimately subsidize the costs.

Parry doesn’t think too kindly of PSE or the folks against coal in Seattle and Portland either. After nearly 50 years of providing power to Western Washington, the utility is bailing as cheaply as possible without regard for those who helped keep air conditioning units humming and electric vehicles charged, he said. 

The $10 million PSE donated in 2019 toward the Colstrip Impacts Foundation, which seeks to help residents transition and spur development, was a “poke in the eye” and only an attempt to look good in the press, he said. 

Conversely, consumer advocates in Washington have argued in regulatory filings that Avista and PSE spent too much on upgrades at Colstrip, which extended the life of the plant past 2025, when Washington customers will no longer be using coal energy. During proceedings, advocates also raised concerns that the deal to transfer shares of Colstrip to the Montana utility was not reviewed by the state regulators.

PSE has argued that giving the shares away was the only deal possible given the looming coal deadline and that investments in Colstrip were part of its obligations as a minority owner.

A crucial reservoir

In Colstrip, even the town’s drinking water is linked to the coal plant. 

At dusk, swallows flitted between trees around Castle Rock Lake, or what locals call “the surge pond,” lined with cattails and bulrush. The lake is also a wildlife and recreational hub for residents. From its southern shore, visitors can see the nearly 700-foot-tall smokestacks of the Colstrip plant rising into the horizon over eastern cottonwood trees and a patchwork field of grasses. It’s the tallest human-made structure in Montana, according to Atchison.

This reservoir was built to hold water for the steam plant, but also the town’s drinking water. If the plant were to close, the owners of Colstrip wouldn’t have an obligation to maintain the 30-mile pipe from the Yellowstone River that fills the reservoir, Parry said. (Parry has recently helped pass legislation that will set aside money to address this issue.)

It’s one of his concerns for the town, along with the outsiders who have taken photos of the clouds billowing from the coal plant without mentioning most of it is steam that is condensing against cold air.

“This industry does a good job. We’re not hiding anything out here,” he said. 

Mulling over his nearly five decades living and raising a family in the town, Jack Rosander doesn’t see how the environmental impacts of the plant could be so bad that they justify its closure. Rosander said he wouldn’t have raised his family here if that was the case, adding that he eats the fish he catches out of Castle Rock Lake.

“We’re lucky to live here. Like I said, it’s a wonderful place, and we hope you keep taking the power. We hope they overturn your rules,” he said.