The operator of a coal-fired power plant in Colstrip is merging with a private investment firm.
Talen Energy announced Friday it has entered into a merger agreement with Riverstone Holdings for $1.8 billion in acquisition costs.
It's too early to say what the sale means for Colstrip, which is run by Talen. Last month the company told the plant's five owners they would need to find a new operator by 2018, if not earlier.
Talen owns half of two of the older units at Colstrip and 30 percent of a third unit. The other owners include Washington utilities Avista Corp., and Puget Sound Energy; Oregon utilities Portland General Electric and PacifiCorp; and NorthWestern Energy, a South Dakota company that is Montana’s largest gas and electric utility.
Todd Martin, spokesman for Talen, said Friday morning he couldn't speculate on what the sale means for the plant's future.
"Right now our mission is a very simple one, which is to continue to grow value for this company and the way we do that is carefully operate these plants," he said. "We want to deliver reliable energy to our customers knowing that over the next several months there are going to be a lot of processes that are taking place."
Talen has been continuing to communicate with Gov. Steve Bullock and other stakeholders as well as employees, Martin said. Representatives from Talen will also attend an interim legislative committee in July to discuss its role in Colstrip.
"It would be premature to speculate about the future because we don't know," Martin said. "When we do we will do that in a transparent and forthright way, but what we don't want to do is speculate. When we have facts and information we will discuss them."
Earlier this year Talen CEO Paul Farr said his company “will lose millions in terms of operating Colstrip through the balance of the year.” Cheaper natural gas and states and the federal government pushing toward other power sources has significantly hurt the coal industry.
Martin said what happens next is a long process to get regulatory and shareholder approval. Riverstone, which already had a 35 percent stake in Talen, developed the merger plan and took it to the board of directors.
A spokeswoman for Bullock said Friday that Talen called to inform the governor about the news before the release went out.
“That’s the extent of communication we’ve had with them about this particular acquisition,” she said.
The Energy and Telecommunications interim committee has invited Talen and Puget Sound Energy to its July meeting to discuss the future of Colstrip.
In May, Kimberly Harris, CEO of Puget Sound Energy in Washington; Paul Farr, CEO of Pennsylvania-based Talen Energy; and Bob Rowe, CEO of NorthWestern Energy sat down with Bullock to discuss the future of the plant.
Any Talen stock not already owned by Riverstone will be sold for $14 a share.
The agreement provides for a "go-shop" period, during which Talen can enter into negotiations with parties that offer alternative proposals. The go-shop period is 40 days. The parties currently expect the transaction to be completed by the end of 2016.