PPL Montana – the biggest power generator in the state – is trying to sell its 16 electric power plants in Montana, according to industry trade publications and sources close to the industry.
PPL officials won’t comment on what they call “market rumors,” but have acknowledged that falling market prices for electricity have greatly reduced profits from non-regulated plants that sell electricity on the wholesale market – like those in Montana.
Most often mentioned as a potential buyer is NorthWestern Energy, the successor to Montana Power Co., which sold PPL Montana the plants in 1999.
NorthWestern, the largest electric utility in Montana, is “actively looking” to buy or build power-generation assets when it makes sense for ratepayers, says company spokeswoman Claudia Rapkoch.
NorthWestern has been slowly rebuilding itself as a utility that owns power-production plants or contracts to supply its customers, as it was before Montana Power sold off those assets in the wake of utility deregulation 15 years ago.
But Rapkoch gave no indication whether NorthWestern is interested in buying the PPL plants, saying “we never comment on those kinds of activities.”
PPL Montana still has contracts to sell substantial amounts of electricity from its plants to NorthWestern, but the last of those contracts expire in 2014.
PPL Montana, a unit of Pennsylvania-based PPL Corp., bought 11 hydroelectric plants from Montana Power, the Corette coal-fired power plant in Billings, and shares of the four coal-fired plants in Colstrip.
Clearing Up, an industry publication, reported earlier this month that PPL Montana has hired investment bank UBS to help sell all or part of PPL’s Montana power-plant interests.
It also said PPL is negotiating with the Confederated Salish and Kootenai Tribes to sell them Kerr Dam, a 194-megawatt power plant on the Flathead River and Flathead Indian Reservation.
Other trade publications have written similar reports in recent months.
PPL Montana’s power plants are “merchant” plants that sell into the unregulated wholesale market, which is at its lowest price point in 15 years.
PPL Montana spokesman David Hoffman says its coal-fired plants at Colstrip and Billings have shut down periodically this year when they couldn’t sell power at a profit, because of extremely low prices.
PPL Corp.’s chairman, William Spence, has been saying PPL is shifting its power-producing portfolio toward regulated plants, rather than merchant plants, because of lower market prices for electricity.
While PPL Montana owns and operates the four coal-fired plants at Colstrip in southeast Montana, it does not own all of their power output. NorthWestern owns some, as do four other Pacific Northwest utilities based in Oregon and Washington.
Representative of two of those utilities, Avista Corp. in Spokane, Wash., and Rocky Mountain Power in Salt Lake City, wouldn’t comment on the possible sale of Colstrip. However, they said coal-fired power will continue to be part of their electricity sources for years to come.
Rocky Mountain Power is part of PacifiCorp., which is headquartered in Portland, Ore.