Puget Sound Energy sells remaining ownership stake in Montana coal power plant

Washington State-based regulated utility Puget Sound Energy (PSE) is selling its 25-percent ownership share in a Colstrip, Mont., coal-fired power plant to a co-owner that plans to utilize some of the nearby space to construct a wind farm that will generate additional electricity.

The transfer of PSE’s share, slated to become effective Dec. 31, 2025, coincides with PSE’s deadline under a 2019 state law to end its delivery of coal-fired electricity to Washington customers. 

“PSE customers want clean energy and we are committed to providing it as we plan for our future in accordance with Washington laws and our aspirational Beyond Net Zero Carbon goal,” Mary Kipp, PSE’s chief executive officer, said Monday. 

Talen Energy Supply LLC affiliate, Talen Montana LLC — which currently owns a 30-percent share of Colstrip unit 3 and serves as the plant operator — will assume PSE’s ownership share in plant units 3 and 4 on Dec. 31, 2025, according to a joint statement the companies released on Monday. 

As part of the deal, PSE will retain its share of environmental remediation and other asset retirement obligations, as well as decommissioning costs and related costs that accrue through that date, associated with cleaning up the site around units 3 and 4, the statement says. 

Combined, the units generate about 1,480 megawatts (MW) of electricity. The two older Colstrip generating units — also co-owned by Talen Energy and Bellevue, Wash.-based PSE — shut down in 2020.

“I am pleased to complete this strategic transaction with Mary Kipp and Puget Sound Energy, which allows Talen to begin implementing its energy transition vision for Colstrip while also helping to preserve energy security and jobs in Montana,” said TES Chief Executive Officer Alejandro “Alex” Hernandez. 

Talen’s Colstrip energy transition plan centers on the development of the 600-MW Silverthorn Wind project located in Rosebud and Treasure counties in Montana that is expected to interconnect at the Colstrip substation.

The Silverthorn project is part of a joint venture between TES affiliate Cumulus Renewables and Pattern Energy Group LP and, pending approvals, is scheduled to be commercially available beginning in 2026, according to Talen. 

When complete, Silverthorn will complement, not replace, Talen Montana’s share of Colstrip units 3 and 4 by reducing the overall carbon intensity of its parent company’s Montana electric generation.

Pattern Energy and Talen are expected to invest up to $1 billion in this energy transition plan and the Silverthorn project to serve customers.

“I would also like to thank Governor Greg Gianforte for his continuing support of Colstrip and for working with the Colstrip co-owners as an advocate that Colstrip operate for its full, useful life,” Hernandez said. “This strategic transaction is a tangible example of energy transition, balancing the interests of our various stakeholders and communities, while creating an attractive renewable energy investment opportunity for infrastructure capital partners.”

The PSE and Talen transaction for units 3 and 4 is subject to a 90-day review period that allows other Colstrip co-owners to exercise their right of first refusal to join the transaction and acquire an interest in the ownership share being transferred.

The transaction is also subject to approval by the U.S. Bankruptcy Court for the Southern District of Texas, which is currently presiding over Talen Energy Supply’s recapitalization.