Emergency Application — Westmoreland Mining Holdings LLC, et al., Applicants v. Environmental Protection Agency, et al.

TABLE OF CONTENTS

APPENDIX A

Order Denying Stay, State of North Dakota v. EPA,

No. 24-1119 (D.C. Circuit, August 6, 2024) ………………………………… App.1

APPENDIX B

42 U.S.C. § 7412 ………………………………………………………………… App.3

APPENDIX C

National Emission Standards for Hazardous Air Pollutants:

Coal- and Oil-Fired Electric Utility Steam Generating Units

Review of the Residual Risk and Technology Review,

89 Fed. Reg. 38508 (May 7, 2024) ……………………………………….…..App.34

APPENDIX D

Comments of Westmoreland Mining Holdings LLC,

EPA-HQ-OAR-2018-0794-5935………………………………………..…… App.120

APPENDIX E

Comments of Northwestern Energy,

EPA-HQ-OAR-2018-0794-5980……………………………………………...App.226

APPENDIX F

Comments of National Mining Association,

EPA-HQ-OAR-2009-0234-20531…………………………………………….App.251

APPENDIX G

Comments of Talen Montana,

EPA-HQ-OAR-2018-0794-5987……………………………………………...App.443

APPENDIX H

Declarations:

Exhibit 1 – Declaration of Patrick Barkey ………………………. App.484

Exhibit 2 – Declaration of Jeremy Cottrell …………………...…. App.518

APPENDIX E

APPENDIX

June 23, 2023

Via Federal eRulemaking Portal [regulations.gov]

Via Email [benish.sarah@epa.gov]

Ms. Sarah Benish

Sector Policies and Programs Division

Office of Air Quality Planning and Standards

U.S. Environmental Protection Agency

Research Triangle Park, NC 27711

Re: NorthWestern Corporation Comments re: Proposal on National Emissions Standards

for Hazardous Air Pollutants: Coal and Oil-Fired Electric Utility Steam Generating Units

Review of the Residual Risk and Technology Review

Docket ID No. EPA–HQ–OAR–2018–0794

Dear Ms. Benish:

On behalf of NorthWestern Corporation d/b/a NorthWestern Energy (“NorthWestern”), I

am commenting on the U.S. Environmental Protection Agency’s (“EPA’s”) proposed

changes to the National Emissions Standard for Hazardous Air Pollutants (“NESHAP”)

for the Coal- and Oil-fired Electric Utility Steam Electric Generating Units (“EGUs”),

commonly known as the Mercury and Air Toxics Standard (“MATS”). The proposed

changes were published in the Federal Register on April 24, 2023, at 88 Fed. Reg. 24,854

(“Proposed Rule”). As discussed herein, the Proposed Rule poses significant challenges

for NorthWestern and its rate-paying customers in Montana, will likely have

environmental and Environmental Justice impacts that are contrary to Administration

policies, and is likely unlawful.

NorthWestern agrees with and incorporates by reference the concurrent comments

submitted by Talen Montana, LLC (“Talen”) as part owner and based on its knowledge

as operator of Units 3 and 4 of the Colstrip Steam Electric Station (“Colstrip”).

NorthWestern. NorthWestern endeavors to minimize duplication of the Talen comments.

These comments are organized into the following sections:

x

x

x

x

Summary of Comments;

NorthWestern’s commitment to environmental and climate responsibility;

NorthWestern’s commitment to Environmental Justice;

NorthWestern’s energy portfolio and role in serving Montana electricity

customers;

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x Transmission limitations on the ability to import power;

x Inability to close Colstrip prior to 2035 without constructing replacement thermal

baseload capacity;

x Costs of installing additional controls on Colstrip;

x Colstrip and NorthWestern portfolio scenarios;

x Cost and safety hazards of closing Colstrip prior to 2036 without constructing

replacement thermal baseload capacity;

x Consequences of diverting capital from other beneficial projects to comply with

the Proposed Rule

x Prejudice to NorthWestern of the Proposed Rule;

x Statutory and Administrative Procedure Act deficiencies with the Proposed Rule;

and,

x Requests.

Each of these subjects is addressed below.

1.

Summary of Comments

The Proposed Rule, if finalized in its current form, is deeply harmful to the residents of

Montana and will work in contradiction to the President’s environmental objectives in

Executive Order 13990, and Executive Order 12898, as most recently amended by the

President on April 23, 2023. This is a result of the specific history and current electrical

generation and grid limitations of NorthWestern and Montana.

As EPA is aware, Colstrip is in full compliance with the current MATS standards, which

EPA does not dispute meet the statutory objectives of the Clean Air Act. However, as

EPA also acknowledges and Talen explains in detail, Colstrip cannot come into

compliance with either of the candidate standards set forth the Proposed Rule without

extensive supplementation of existing pollution controls – the venturi wet scrubbers

currently in use cannot meet the proposed standards. As detailed by Talen, upgrading

Colstrip to comply with the Proposed Rule is cost-prohibitive, resulting in at least

$350,000,000 in capital costs, plus an additional $15 million annual operating costs. See

Talen Comments, Attachment C. NorthWestern and residents of Montana would bear the

majority of these costs. Colstrip is the only facility identified by EPA as facing this

predicament.

In addition, if Colstrip is closed in the near term, NorthWestern cannot provide adequate

and reliable electrical service for its Montana customers without new replacement

baseload capacity. Colstrip currently plays an essential role in baseload capacity for

NorthWestern, and there are no near-term feasible means to replace Colstrip’s capacity

with other existing NorthWestern capacity or market purchases from in-state or out-of-

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App.227

state sources. Imported power is further constrained by significant transmission

limitations.

NorthWestern has modeled and evaluated scenarios for closure of Colstrip in 2025, 2030,

and 2035, and 2042 in its May 2023 Integrated Resource Plan. The 2025 and 2030

closure scenarios expose NorthWestern to extreme degrees of market risk, resulting high

probabilities of ruinous market electricity purchases and grid instability.

If the Proposed Rule is finalized in its current form, NorthWestern will therefore be faced

with an array of costly and environmentally unsound choices. Renewables are not a

viable option because NorthWestern’s portfolio is already renewable-heavy, and

additional renewable capacity will not solve the problem of variable generation deficits

NorthWestern currently experiences.

On the one hand, if NorthWestern participates in upgrades to Colstrip, it will either need

to materially increase electricity rates for Montana customers, or redirect funding

previously earmarked for other projects. Projects that may be abandoned to fund Colstrip

upgrades include transmission improvements, planned upgrades to facilities that are in

excess of maintenance requirements, or other non-required beneficial capital projects.

The vast majority of these have direct environmental benefits, deferral of which would

undermine or even fully negate the environmental benefits of the Proposed Rule.

Alternatively, the only baseload capacity that can conceivably be constructed within the

statutory compliance deadlines is new natural gas generation capacity. Carbon-free

baseload alternatives are either unproven, or require significantly longer development

times. The net result would be a substantial investment in a new, large, long-lived fossil

fuel based generation assets. This outcome would clearly contradict the objectives of

E.O. 13990.

NorthWestern has been substantially and uniquely prejudiced by EPA’s course of action.

The 2020 Residual Risk Technology Review (“RTR”) confirmed that Colstrip’s pollution

controls satisfy the requirements of the Clean Air Act, and there have been no significant

technological or implementation advancements since the 2020 RTR that would change

that conclusion. Had NorthWestern known that EPA would undertake a complete reversal

of the conclusions of the 2020 RTR just three years later, NorthWestern could have

factored compliance costs earlier and more robustly into NorthWestern’s Integrated

Resource Planning process.

The combination of prejudice to NorthWestern and the ratepayers of Montana, coupled

with mis-application of the technology review provisions of Clean Air Act Section

112(d)(6), places EPA at significant risk of having the Proposed Rule declared as

arbitrary and capricious and contrary to law.

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Consequently, NorthWestern respectfully urges EPA to use its discretion under the Clean

Air Act and E.O.s 13990 and 12898 to take the following actions:

(1).

Withdraw the Proposed Rule, revisiting the subject closer to the eight year

timeframe provided in Clean Air Act Section 112(d)(6), or earlier if and

when actual technological advancements occurring since the 2020 RTR

satisfy the conditions for revisitation of standards set forth in Section

112(d)(6);

(2).

If the Proposed Rule is not withdrawn, create a source subcategory that

exempts those facilities presently employing wet scrubber technology

without ESP or fabric filter add-ons until the next RTR; and/or

(3).

Create a retirement subcategory allowing units to continue to meet the

existing 0.03 lb/MMBtu fPM standard so long as they opt-in to the

retirement subcategory within 18 months after finalization of the rule, with

a retirement date no later than December 31, 2035 (and where continued

operation after 2035 would later be permitted if (i) the unit is essential to

maintain regional grid reliability, as determined by the Western Regional

Adequacy Program, Regional Transmission Organizations, Independent

System Operators, North American Electric Reliability Corporation, or

other similar system reliability authorities; or (ii) or if EPA determines that

additional time is required to allow the unit to transition to renewable or

clean energy generation).

The foregoing courses of action are the only options that comply with the statutory

requirements of the Clean Air and Administrative Procedure Acts, and are consistent with

the objectives of E.O.s 13990 and 12898.

2.

NorthWestern’s commitment to environmental and climate responsibility

NorthWestern is a strong proponent of environmental protection, consistent with its

responsibilities to deliver reliable, cost-efficient electrical service to its customers. To

that end, NorthWestern has a corporate objective to achieve net zero emissions by 2050

(“Net Zero 2050”). A copy is attached as Exhibit A. NorthWestern already has one of the

highest percentages of carbon-free generation in the United States, and has significant

additional carbon and other emissions-reducing projects in development. Although

NorthWestern disagrees strongly with the Proposed Rule, this should not be confused

with opposition to environmental protection or the objectives of E.O. 13990.

4

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3.

NorthWestern’s commitment to Environmental Justice

NorthWestern shares the Administration’s commitment to Environmental Justice.

NorthWestern has extensive programs to support critically needed affordable and reliable

energy to low income and tribal communities within NorthWestern’s service area. It is

not clear from the Proposed Rule and supporting documentation that EPA has fully

considered the Environmental Justice consequences of the Proposed Rule, especially as

related to Montana and the Environmental Justice communities in Montana. For example,

25% of NorthWestern’s service base is low income, with approximately half of those

below poverty standards. The costs of the Proposed Rule will fall in important ways on

those who are least able to afford it, and as detailed further in Sections 4 and 5, the grid

reliability dangers posed by Proposed Rule also threaten the most vulnerable in Montana.

In addition to the essential services NorthWestern provides, Colstrip and the Rosebud

Mine supplying Colstrip directly employ 82 people of tribal affiliation, or 14% of the

facilities’ total employment. Premature closure of Colstrip would devastate these families

and the Colstrip community as a whole.

Consistent with the Administration’s updates and revisions to Executive Order 12898

(Executive Order on Revitalizing Our Nation’s Commitment to Environmental Justice,

April 21, 2023), EPA must evaluate these Environmental Justice effects in comparison

with the claimed health benefits of the Proposed Rule. This is an acute issue where the

environmental benefits claimed from the rule are extremely incremental (from 99.6%

fPM existing removal efficiency to 99.8% efficiency under the Proposed Rule), and start

from a baseline level of performance that is highly protective of human health and in

compliance with Clean Air Act objectives.

4.

NorthWestern’s energy portfolio and role in serving Montana electricity

customers

NorthWestern provides energy and capacity to customers in Montana, South Dakota, and

Nebraska. For transmission interconnection reasons explained later, Colstrip is

principally relevant and important to electrical supply in Montana. NorthWestern

provides electricity to customers in its service areas in Montana and also serves as a

“Balancing Authority,” which means that NorthWestern is responsible for ensuring that

the supply of and demand for electricity within our Balancing Authority Area are in

equilibrium or balanced.

The Montana Public Service Commission (“MPSC”) oversees NorthWestern’s resource

planning activities and the recovery of costs of generation and power purchase

agreements. At all times relevant to this matter, the MPSC had set forth the following

objectives that Montana utilities should meet: (a) reliability; (b) affordability; (c)

environmental responsibility; (d) optimality; and (e) transparency. See MCA 69-3-1202.

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App.230

NorthWestern thus has legal obligations to reliably and affordably supply electricity to its

customers in Montana and to do so cost-effectively while seeking to reduce adverse

environmental impacts. In addition to those legal obligations, NorthWestern recognizes

that as a practical matter its customers count on NorthWestern to provide the cost

effective electricity used to power their homes and businesses and the critical

infrastructure upon which they rely.

Under Montana law, NorthWestern, as a regulated public utility, is required to prepare

and file a plan every 3 years for meeting the requirements of its customers in the most

cost-effective manner consistent with its obligation to serve under the law. MCA § 69-31204(1)(a).

The plan must include:

a. an evaluation of the full range of cost-effective means for the public utility

to meet the service requirements of its Montana customers, including

conservation or similar improvements in the efficiency by which services

are used and including demand-side management programs in accordance

with 69-3-1209;

b. an annual electric demand and energy forecast developed pursuant to

commission rules that includes energy and demand forecasts for each year

within the planning period and historical data, as required by commission

rule;

c. assessment of planning reserve margins and contingency plans for the

acquisition of additional resources developed pursuant to commission rules;

d. an assessment of the need for additional resources and the utility's plan for

acquiring resources;

e. the proposed process the utility intends to use to solicit bids for energy and

capacity resources to be acquired through a competitive solicitation process

in accordance with 69-3-1207; and

f. descriptions of at least two alternate scenarios that can be used to represent

the costs and benefits from increasing amounts of renewable energy

resources and demand-side management programs, based on rules

developed by the commission.

Planning for reliable service requires NorthWestern to ensure that it has enough

electricity generation resources to meet its customer demands every hour of the year,

even with changing weather and demands. As a matter of physics, for the electric grid to

operate reliably, the amount of energy generated (“generation”) and the consumption of

that energy (“load”) must be equal or in balance. Generation and load must be in balance

year-to-year, month-to-month, day-to-day, hour-by-hour, and minute-by minute for the

electric grid to remain stable. Because of the long lead times needed to build or acquire

new electrical generation or transmission assets or negotiate power purchase contracts,

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App.231

NorthWestern, like other electric utilities, makes plans for the supply of electricity years

in advance. This long-term planning is also required by law. In Montana, NorthWestern

prepares formal, written plans that are filed with the MPSC. Attached as Exhibits B-1 and

B-2 to these comments is a copy of Volume 1 of NorthWestern’s 2019 Electricity

Resource Procurement Plan (“ERPP”), which was filed at the MPSC in Docket No.

N2018.11.78. 1 Attached as Exhibit C is the 2020 Supplement to the 2019 Plan. Attached

as Exhibits D and E are the two volumes of NorthWestern’s May 2023 Integrated

Resource Plan (“2023 IRP”).

NorthWestern began to serve customers in Montana when it purchased the transmission

and distribution assets of the Montana Power Company in 2002. Initially, NorthWestern

did not own any generation assets to serve Montana customers. This situation was not

ideal as it required NorthWestern to purchase all the electricity needed to serve

customers. These purchases were and continue to be from a market that experiences

volatile pricing and increasing supply shortages.

Since then, NorthWestern has acquired various types of electricity supply resources.

Most notably, in 2014 NorthWestern purchased a portfolio of hydroelectric facilities in

Montana. NorthWestern has also made significant investments in wind power.

NorthWestern currently owns approximately 1,271 megawatts (“MW”) of generation

capacity and has long-term contracts for another 680 MWs.

NorthWestern’s generation portfolio now is a diverse mix of resources, the majority of

which are renewable. The portfolio includes 497-MW of hydroelectric maximum

delivered capacity, 455-MW of maximum delivered wind capacity, 222-MW of coal

capacity, 202-MW of natural gas capacity, 87-MW of waste coal capacity, and 187-MW

of solar capacity. The Company also has market capacity contracts for 460 MWs which

have price or market exposure. In summary, NorthWestern’s current portfolio has 202

MW of natural gas capacity, 309 MW of coal and waste coal based capacity, and 1,129

MW of renewable fueled generation.

The table below lists NorthWestern’s existing owned generation facilities and contracted

generation resources along with some additional resources that the Company expects to

bring online, including the Yellowstone County Generating Station, which is currently

under construction.

Volume 2, which includes underlying hourly data among other material, is so voluminous that

NorthWestern usually only provides it in electronic form. Given the size of Volume 2 and the

number of additional files that would require submission, it is not provided with these comments.

NorthWestern will certainly provide it if desired or needed for EPA’s evaluation.

1

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App.232

MT Portfolio Resources

Hydro Generation – Online

Thompson Falls

Cochrane

Ryan

Rainbow

Holter

Morony

Black Eagle

Hauser

Mystic

Madison

Turnbull Hydro LLC

State of MT DNRC (Broadwater Dam)

Tiber Montana LLC

+ QF Hydro Resources

Thermal/Natural Gas Generation – Online

Basin Creek

DGGS 1 -3

Thermal/Natural Gas Generation – Contracted

Yellowstone County Generating Station (Laurel)

Thermal/Coal Generation – Online

Colstrip 30% U4

Yellowstone Energy Limited Partnership (BGI) (QF)

Colstrip Energy Limited Partnership (QF)

Wind Generation – Online

Judith Gap Energy LLC

Spion Kop Wind

Two Dot Wind Farm

+QF Wind Resources

Solar Generation – Online

+QF Solar Resources

Solar Generation – Contacted

Clenera Apex I (QF)

Short Term Contracts – Max

Morgan Stanley (3 yr) On Peak Only, Q1, Q3, Q4 - expires

10/31/2023

Morgan Stanley (3 yr) ATC, Q1, Q3, Q4 - expires 10/31/2023

Powerex (3 yr) Contingency Reserves - expires 12/31/2023

Powerex (5 yr) - expires 12/31/2027

Heartland (10 yr) - (150 MW to 200 MW) - expires 12/31/2031

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NorthWestern currently has over 200 percent more wind generation than its Colstrip

generation. In terms of generation asset nameplate capacity, the two largest, by far, are

hydroelectric assets and the fleet of wind farms, both of which are carbon free.

NorthWestern’s portfolio of solar generating facilities has also been increasing in recent

years. At the same time, it is important to note the difference between “nameplate” and

“accredited” capacity. Nameplate capacity refers to the maximum electrical generating

output (in MW) that a generator can sustain over a specified period of time when not

restricted by seasonal or other “deratings” (events that reduce effective output), as

measured in accordance with the United States Department of Energy standards. In

contrast, accredited capacity means the electrical rating given to generating equipment

that meets the Utility’s criteria for uniform rating of equipment. These criteria include but

are not limited to reliability, availability, type of equipment and the degree of

coordination between the Distributed Generation and the Utility. Wind and solar

accredited capacities are much lower than their nameplate capacities, because of the

seasonal and weather variability of those generation sources. Hydroelectric generation

also has a gap between nameplate and accredited capacity, reflecting periods when

generation is restricted by stream flows. All this is reflected in the table below:

MT Portfolio Resource

Hydro Generation - Online

Total

Thermal/Natural Gas Generation - Online

Total

Thermal/Coal Generation - Online

Total

Wind Generation - Online

Total

Solar Generation - Online

Total

Short Term Contracts - Max

Total

Nameplate

Capacity

Accredited

(MW)

Capacity (MW)

497

298

255

195

309

288

455

59

97

1

460

2073

460

1301

In fact, while news coverage of NorthWestern often discusses the coal or natural gas

facilities, the proportion of NorthWestern’s generation resources that are renewable

compares highly favorable to other utilities. In 2022, 59% of NorthWestern’s electric

generation was from carbon-free resources, which compares to 40% of megawatt hours

generated by the U.S. electric power industry as a whole.

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App.234

Despite the significant improvement in NorthWestern’s generation capacity, including

acquisitions of hydroelectric plants and wind farms, NorthWestern’s resource portfolio is

not yet sufficient or “reliable”, as defined by regional planning organizations.

In periods of peak loads, NorthWestern often does not have sufficient capacity, meaning

that NorthWestern must make market purchases of electricity to meet customers’ needs.

Periods of peak load are those times when customer demand for electricity is particularly

high. This tends to occur during periods of extreme weather, during the coldest winter

days (below 10 degrees Fahrenheit) when more electricity is used for heating purposes

and during the hottest summer days (above 90 degrees Fahrenheit) when more electricity

is used for cooling. The availability or unavailability of other resources can also be a

significant factor. For example, the amount of rain during a season or snow during a

preceding winter impacts the generation of our hydroelectric facilities. Similarly, there

are periods when more or less wind power is generated. Unfortunately, critical weather in

Montana typically occurs with high pressure, meaning wind generation more frequently

than not generates very little power during these critical conditions. Those instances

when there is both high demand for electricity and less available renewable generation

can be particularly challenging from both a reliability and customer affordability

perspective.

The chart below, which is drawn from NorthWestern’s 2019 Electricity Supply Resource

Procurement Plan filed at the MPSC, illustrates the difference between NorthWestern’s

available capacity and that of its regional peers.

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App.235

As the chart shows, NorthWestern relies more heavily on market purchases to meet its

electric needs during peak periods than any other utility in the Pacific Northwest. There

are significant disadvantages to being reliant on market purchases to manage peak

demand periods.

As an initial matter, prices for electricity tend to increase when there is greater demand.

Typically, NorthWestern’s periods of peak demand coincide with those of other utilities

in the region. At the same time market prices are increasing during the critical weather

events, especially winter, the available wind and solar generation frequently diminishes,

sometimes to near zero. The same weather patterns that impact Montana also frequently

impact other states in the region. As a result, the demand for electricity is high during

such periods, which drives up the prices. Those higher prices increase our costs and

ultimately lead to higher bills for our customers, which impacts their household and

business finances and the broader Montana economy. Importantly the costs of electricity

obtained through power purchase contracts are substantially passed directly through to

consumers. NorthWestern’s lower income and smaller business customers tend to be

most sensitive to the impacts of increased electric costs.

In addition to pricing, there is also the question of availability. Simply put, it is not

prudent to assume that there will always be sufficient out-of-state power that can be both

purchased and transmitted to Montana. The limitations of the transmission system and

how those impact NorthWestern’s ability to bring electricity into Montana to serve

customers are discussed in more detail in Section 5. This section further discusses the

availability of electricity to purchase, setting aside the increasing uncertainty of whether

it can be transmitted to Montana.

In recent years, several large power plants in Montana and adjacent states have closed.

J.E. Corette, with a nameplate capacity of 163 megawatts (MWs), was closed in 2015.

Colstrip Units 1 and 2, each with nameplate capacities of 307 MWs, ceased operation in

early 2020. That same year, the Boardman plant in Oregon, 601 MWs, and Unit 1 of the

Centralia plant in Washington, 730 MWs, both closed. Idaho Power ended its

participation in Unit 1 of the Valmy facility, 254 MWs, in 2019 and the operations there

completely halted in 2021.

In addition to those significant retirements that have already taken place, more

retirements are anticipated in the near future. In particular, Unit 2 of the Centralia plant,

670 MWs, is scheduled to cease operation in 2025, as is North Valmy Unit 2, which is

289 MWs.

In summary, there is much less reliable electrical generation available in Montana and the

Pacific Northwest (the market) than in the past, and the closures scheduled for 2025 are

expected to result in the loss of an additional 959 MWs of nameplate capacity by the end

of that year. Importantly, these losses of nameplate capacity are all for facilities for which

11

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their accredited capacity is very close to their nameplate capacity. As a result, the

regional portfolio is shifting away from high-accredited to low-accredited generation

sources. A difficult situation is expected to get worse and grave reliability concerns are

no longer just the province of states like California and Texas that have had well

publicized blackouts.

Equally importantly in terms of timing and supply, 185 MW of NorthWestern’s current

market contract capacity will be expiring by mid-2024. Given the retirements of facilities

throughout the region, NorthWestern does not have confidence it will be able to renew or

replace these contracts when they expire, especially under as favorable of terms. To the

extent any can be replaced, market conditions indicate that they will be at much higher

costs, which will be passed directly on to customers.

Montana’s decision to deregulate its electricity sector, and the concurrent decision by

Montana Power Company to sell all of its electricity generation portfolio, coupled with

subsequent plant closures, has placed NorthWestern in a critically tenuous position of not

being able to reliably serve its customers’ needs during periods of peak loads, such as hot

summer and most critically, cold winter days. This is in spite of NorthWestern acquiring

a substantial amount of generation since 2011, none of which has been carbon-emitting.

In NorthWestern’s 2017 and 2019 Electricity Supply Resource Plan (and in the 2020

supplement), NorthWestern identified significant deficiencies and risks to customers due

to our portfolio’s reliance on market purchases, much of which originates from out of

state, plus a lack of reserve margin to reliably serve our customers. These Plans

empirically and analytically set forth particular capacity vulnerabilities that need to be

addressed in order to continue to provide reliable service to our customers. In particular,

NorthWestern identified a need to have resources available to serve 20-hour, 10-hour,

and 5-hour periods in the future when there will be capacity portfolio deficits.

Notably, NorthWestern at that time did not identify a need for new baseload capacity. As

stated in the 2019 ERPP, “NorthWestern’s resource portfolio generally generates enough

energy to serve average load, but is significantly short both peaking and flexible

capacity.” A key reason that NorthWestern did not plan for new baseload capacity was

that it had made substantial investments in Colstrip to comply with the 2012 MATS Rule

and regional haze requirements. NorthWestern knew that Colstrip would be able to

achieve Clean Air Act statutory and health-based standards over the medium-to-long

term. NorthWestern had contemporaneous public assurances from EPA to that effect.

And NorthWestern knew that there were no significant pollution control technology

advancements in the offing that would change control performance. Consequently, the

2019 ERPP and 2020 Supplement focused investment on the identified peaking and

flexible capacity needs, as well as improving transmission capabilities.

Based on those identified needs, NorthWestern issued a Request for Proposals (RFP) in

January 2020. This RFP was explicitly for any type of generation that was able to provide

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App.237

capacity for those three distinct shorter-duration categories. This RFP was conducted by

an independent and respected third party. NorthWestern was not directly involved in the

evaluation process. After receiving the identified short-list from the evaluator,

NorthWestern in conjunction with the evaluator selected three proposals: the Yellowstone

Generating Station to address the 20-hour need and a portion of the 10-hour capacity

need, a 5-year power purchase agreement with Powerex Corp., the marketing partner of

BC Hydro System, to address the remaining portion of the 10-hour duration need and part

of the 5-hour need, and a contract with Beartooth Energy Storage, LLC for a 50 MW, 4hour battery facility to be located near Billings for the remaining portion of the 5-hour

duration need. No RFP was issued to upgrade or replace Colstrip capacity, because no

need had been identified.

5.

Transmission limitations on the ability to import power

The United States electric grid has an Eastern Interconnection, a Western

Interconnection, and a separate Texas interconnection, which each operate largely

independently with limited transfers of power between them. NorthWestern’s Montana

electric transmission system is located in the Western Interconnection of the United

States grid. NorthWestern also has an electric transmission system in South Dakota;

however, that is in the Eastern Interconnection and there is no effective means to transfer

electricity from NorthWestern’s South Dakota generation sources to Montana. In

addition, those generation sources are fully subscribed.

NorthWestern manages its transmission system in Montana as a Balancing Authority

Area (“BAA”) operator, with responsibility for ensuring that system supply and demand

are in constant balance. To support the continuous flow of electricity, NorthWestern is

also responsible to provide ancillary services such as scheduling, system control, and

dispatch; regulation and frequency response; and contingency reserves. When demand

and supply are not in balance, equipment damages, cascading outages, or blackouts can

result. As a BAA operator, NorthWestern must meet and operate within the reliability

standards established by NERC.

NorthWestern’s Montana electric transmission system covers over 97,000 square miles.

This integrated system includes about 7,000 miles of transmission lines. The system

includes over 280 circuit segments, 79 transmission or transmission/distribution

substations, and over 100,000 poles and towers. The transmission system integrates

resources and loads through 500 kilovolt (kV), 230 kV, 161 kV, 115 kV, 100 kV, 69 kV,

and 50 kV lines to deliver power to the various load centers dispersed throughout

NorthWestern’s service territory.

Montana was traditionally an exporter of power. However, following the 2015 closure of

the J.E. Corette plant (163 MW) and the 2020 closure of Colstrip units 1 and 2 (614

MW), the NorthWestern BAA has transitioned from being a net exporter of energy to a

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App.238

net importer. During the most critical periods, times of peak energy demand,

NorthWestern now relies heavily on imports, and frequently on non-firm transmission, to

meet customer needs. “Firm” transmission is transmission capacity reserved for the full

duration of the transmission service agreement. In contrast, “non-firm” is transmission

capacity that can be used only on an as-available basis when unreserved capacity is

available on the transmission system. The existing NorthWestern transmission system

was not designed to transmit imports, serving such a large portion of customer load.

NorthWestern’s transmission system and its connections to utilities in other states were

not designed to import significant additional amounts of electricity. While there are

existing lines and interconnections, there is limited capacity available on those facilities

and further complications and congestion outside of Montana, making it imprudent for

NorthWestern to assume it can import additional power when needed. Redundancy in the

reliable transmission of energy is also extremely important because an outage on one

transmission line can cause overloads to another. Relying on transmission lines and

interconnections to import the electricity needed to serve such a large portion of our

Montana load inherently increases the risk of outages and the resulting failure to serve

customers during times of greatest electricity demand.

NorthWestern’s transmission system has interconnections to six major transmission

utilities – Idaho Power Company, Avista Corporation (“Avista”), BPA, Western Area

Power Administration (“WAPA”), PacifiCorp, and the Alberta Electric System Operator

as noted in Figure 1 below. NorthWestern transfers power in and out of Montana through

Western Electricity Coordinating Council (“WECC”) rated “Paths”, each consisting of

transmission lines crossing Montana’s borders. To the west and south are Paths 8, 18,

and 80, and to the north is Path 83, on the Montana Alberta Tie Line (“MATL”), and

these are shown in the figure below. Note MATL is not owned or operated by

NorthWestern. Figure 1 shows the Total Transmission Capability amounts, or TTCs.

However, TTC represents the total designed and approved transmission capacity, not the

amount of additional available capacity above the capacity already in use.

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Figure

g

1: WECC Paths and Total Transfer Capability

p

y (TTC in MW)

As can be seen, the largest single path to the Pacific Northwest and other Western

Interconnection markets is Path 8, which consists of the interconnections with BPA and

Avista. As the figure indicates, Path 8 is made up of multiple lines and has a

significantly higher TTC than the other paths.

However, there is very little Available Transmission Capacity (“ATC”), which is the

difference between the TTC and the amount of capacity already reserved by existing

transmission commitments, that could be used to import additional electricity to

NorthWestern’s system via Path 8 for the foreseeable future. In short, Path 8 is a

significant and convenient interstate transmission path, but its capacity has already

largely been reserved.

Path 80, located in the southeastern portion of Montana, theoretically has more ATC.

However, it is a very complex path that experiences significant congestion and

curtailments due to reliability issues. Path 80 is greatly impacted by what is going on in

other transmission owners’ transmission systems outside of Montana. Path 80 is affected

by loads and generation in Wyoming, Colorado, and Utah as well as other potential

impacts. Moreover, Path 80 is far from the Pacific Northwest market, causing greater

potential congestion if it is used to import power from that area. As one example of the

problems with Path 80, during the significant cold weather of February 2021, there were

curtailments of transmission on Path 80 at the worst possible time. Path 80 very

commonly has non-firm transmission curtailed (and sometimes even firm transmission)

as a result of congestion on the transmission system in Wyoming and further south. This

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most commonly happens during peak events, but also during non-peak events. That is the

reason NorthWestern currently has no remaining firm import ATC posted on Path 80.

Path 83 provides transmission capacity between Montana and Canada. Path 83 consists

of a single 230 kV line – the Montana Alberta Tie Line, which is not owned by

NorthWestern. Most of the activity on the Path is related to wind projects located in north

central Montana, also not owned or controlled by NorthWestern. Additionally, Path 83 is

a very complex path that routinely must be curtailed to manage generation and loads.

This path also contributes significantly to our challenges and limitations across an

internal path we refer to as “South of Great Falls”. The South of Great Falls path

frequently must be curtailed and has impacts on the Great Falls, Billings, Helena and

Butte areas.

Path 18 has relatively smaller overall capacity and is highly utilized today with little

import capacity remaining. As described in Paragraph 23 below, for several years ending

in 2012 NorthWestern attempted to permit an upgrade to the transmission capacity of

Path 18 through the proposed Mountain States Transmission Intertie (“MSTI”).

Ultimately, that effort failed. Consequently, Path 18 offers little potential for increased

imports at this time.

In summary, ATC is quite limited for import into the NorthWestern BAA. Figure 2 below

is a snapshot as of February 23, 2023 of long-term firm ATC that is posted on

NorthWestern’s Open Access Same-time Information System (“OASIS”) for each year

displayed. The OASIS provides real-time, up-to-date information and access to

transmission system capacity for all customers. Figure 2 clearly indicates that there is

very little to zero firm ATC to import from any Path of import.

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Figure 2: Import Available Transfer Capability (ATC in MW)

Even when there is available capacity on a path, NorthWestern has to compete with other

transmission customers/users. The operation of NorthWestern’s transmission system is

subject to regulation by FERC in accordance with NorthWestern’s FERC-jurisdictional

Open Access Transmission Tariff (“OATT”). As a result, NorthWestern is required to

provide transmission service to several types of customers on a first come first serve

basis, which means that there is competition for ATC among many potential users of the

transmission system. NorthWestern’s transmission system serves four types of customers

– retail, network, interconnection, and point to point (“PTP”). In addition to

NorthWestern’s retail customers, our FERC customers include electric cooperatives,

federal marketing agencies (e.g. BPA and WAPA), and “choice” customers, who are all

customers that do not receive their electric supply service from NorthWestern. This

means that there are many non-NorthWestern entities within the NorthWestern BAA that

are competing for available transmission, constraining transmission of power at critical

peak times when customers need that power the most. Critically, this transmission

competition is becoming much greater as in-state generation shuts down. As noted above,

transmission capacity is awarded on a first-come, first-served basis. Of critical

importance is that NorthWestern’s own “native” load does not receive any preference

over other eligible customers. In addition, there are rules governing what is a valid

transmission service request or network service designation. For example, long-term

network transmission service designation requests must be tied to legitimate network

resources with valid contracts for service in place. Figure 3 displays the current firm

transmission imports that are reserved on a long-term basis by parties. Many of these

reservations are not for service to NorthWestern’s customers. This transmission capacity

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is reserved under NorthWestern’s FERC OATT, which includes point-to-point customer

wheeling into and out of NorthWestern’s system, and Network customers, including

some reservations by NorthWestern, importing energy from outside of Montana and into

NorthWestern’s transmission system to serve load.

Figure 3: Long-term Firm Reservations by Customer Type

Long Term Firm Reservations from Import Interface Paths

(as of 01/27/2023)

Path 8 Imports

Network

690

Point to Point

342

Total

1032

Path 83 Imports

225

0

225

Path 80 Imports

37

31

68

1325

While NorthWestern faces challenges resulting from limited transmission capacity, it

might seem the obvious solution would be to build new transmission lines. However, that

is only a solution in theory; in reality, it is not currently a practical option. As an initial

matter, increased transmission is only useful in addressing capacity constraints if it

connects to a generation resource willing and able to sell capacity to NorthWestern, and

as explained in Section 3, there is significant uncertainty on that point going forward

given recent and planned power plant closures.

Even if an additional generation resource is located, attempting to build the transmission

lines to that resource is a difficult, time-consuming, and expensive endeavor that might

not succeed. NorthWestern would have to gain approval from the Montana Department

of Environmental Quality (“DEQ”) to permit, site, and construct new transmission

infrastructure by obtaining a certificate of compliance under the Montana Major Facility

Siting Act (“MFSA”) and gain rights-of-way over the proposed transmission path.

Securing easements across land owned privately or by state or federal agencies can be

extremely challenging. Permitting approval would likely be required from other state or

federal agencies as well. The transmission infrastructure would also have to be designed

to satisfy regulatory requirements enforced by FERC, NERC, and WECC. The

combination of all these factors means that actually obtaining authority to construct a

transmission line would take several years, if it is achievable at all.

Increasing transmission capacity, if it could be accomplished, would require upgrades to

not only NorthWestern’s system, but potentially other transmission systems outside of

Montana. Of course, work in other states would require satisfying the regulatory

requirements in those jurisdictions. The need to cooperate with more than one utility and

perform work in multiple jurisdictions makes transmission upgrades even more difficult

as a solution.

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As an example, in 2012, after spending four years and approximately $24 million,

NorthWestern indefinitely postponed its attempts to secure permits for the proposed

500kV Mountain States Transmission Intertie (“MSTI”), which would have provided an

additional connection outside of Montana. This transmission line would have extended

from southwestern Montana to southcentral Idaho and would have been capable of

transmitting approximately 1000 MW of power. The abandonment of the project was due

to continued permitting issues including never-ending process, analysis and movement of

goalposts, as well as difficulty in getting all agencies to timely act and cooperate to define

a reasonable end to the permitting process. Although the Inflation Reduction Act has

made available some resources for such projects, the regulatory environment in terms of

approval timelines has not improved since 2012.

There are no presently proposed interstate transmission lines or upgrades that would

facilitate added import capability into Montana. Given the MSTI experience, if a project

was proposed tomorrow, it could require 7-10 years to design, permit, construct, and

bring into operation, if that was even possible.

6.

Costs of installing additional controls on Colstrip

The options and anticipated costs of installing additional controls on Colstrip to comply

with the Proposed Rule are set forth in detail in Talen’s comments, accompanied by a

supporting analysis prepared by Burns & McDonnell. NorthWestern joins the Talen

comments and will not reiterate them here. NorthWestern’s comments assume capital

costs of at least $350,000,000, and annualized costs of $57,000,000, based on the

working assumption that Reheat Fabric Filter is the most viable technology Colstrip

would deploy to comply with the Proposed Rule. (“Proposed Rule Costs”).

7.

Colstrip and NorthWestern portfolio scenarios

NorthWestern has not planned for the Proposed Rule or the Proposed Rule Costs.

Because the Proposed Rule reflects a reversal or prior EPA analyses and conclusions, and

is not based on new information, there was no reason for NorthWestern to anticipate the

Proposed Rule or the Proposed Rule Costs in the 2019 ERPP or 2020 Supplement, and

neither the Proposed Rule or the Proposed Rule Costs were factored into the recently

completed 2023 IRP. 2

As explained in Sections 4 and 5, Colstrip is central to NorthWestern’s generation

portfolio, and purchasing additional market capacity from existing generation sources to

replace Colstrip’s capacity carries high costs and risks from a generation resource or

Although the 2023 IRP was released shortly after the publication of the Proposed Rule, the

Proposed Rule was released far too close to the finalization of the 2023 IRP to be factored into

the analyses and planning.

2

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transmission perspective. Faced with hundreds of millions of dollars in unanticipated

costs, NorthWestern therefore has three principal options: (a) close Colstrip in the

immediate future and engage in an emergency program to construct additional baseload

capacity; (b) install the controls required by the Proposed Rule and attempt to recoup the

Proposed Rule Costs through rate increases; or (c) postpone or abandon existing planned

capital projects to free up resources to address the unanticipated Proposed Rule Costs

without raising rates. These scenarios are discussed in the following sections.

8.

Cost and safety hazards of closing Colstrip prior to 2036 without constructing

replacement thermal baseload capacity

Although the Proposed Rule came as a surprise to NorthWestern, NorthWestern closely

examined Colstrip closure scenarios as part of the 2023 IRP process. This included

scenarios involving closures in 2025, 2030, and 2035. The 2025 and 2030 closure

scenarios resulted in materially higher total costs, amounting to $1.1 billion in higher

costs (25% increase over the base case) for a 2025 closure, and $540 million higher costs

(12.1% increase over the base case) for a 2035 closure. See 2023 IRP, Exhibit B-1,

Section 8.9. Moreover, these scenarios rely on substantial purchases of power at market

rates, in excess of $50 million each year commencing with Colstrip’s closure. Id. As

explained in Sections 4 and 5, there is substantial uncertainty whether such large market

purchases can even be consistently executed and delivered, especially during peak load

events. Consequently, the 2025 and 2035 closure scenarios are accompanied by

worrisome grid stability and service interruption hazards.

These risks are sufficiently high that NorthWestern would need to closely examine

embarking on an emergency program to construct replacement thermal capacity. On the

timeframes contemplated by the Proposed Rule, the only thermal capacity that could

feasibly implemented is natural gas fired capacity. The net effect would be to replace

relatively short-lived (approx. 10-20 year life) coal-fired thermal capacity with new,

long-lived (30+ year) natural gas capacity. Although natural gas has a lower carbon and

MATS profile than coal, this tradeoff would clearly appear to be inconsistent with the

long term objectives of E.O. 13990.

9.

Rate consequences of the Proposed Rule Costs and impracticality of rate

recovery

NorthWestern currently plans to invest over $2.4 billion in capital outlays over the next

five years. Many of these investments are required by law. Others are intended to

improve system reliability, better utilization of renewables, or other projects (e.g.,

wildfire mitigation) with demonstrable and significant environmental benefits.

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Proposed Rule Costs would constitute significant increase in capital commitments,

weighted toward the earlier part of the five years and could imperil NorthWestern’s

ability to make those critical investments.

Any rate increases to cover Proposed Rule Costs would be on top of other recent rate

increases funding the existing capital and operational budgets. Presently pending before

the MPSC is a 28% residential electricity rate settlement, driven in material part by

NorthWestern’s investments in carbon free and reduced-emissions projects. Proposed

Rule Costs did not factor into the settlement. NorthWestern believes it is uncertain that

the MPSC would approve cost recovery for such a large new increase on top of other

recent increases, and may not approve any portion of it.

As a result, the most likely outcome of the Proposed Rule and Proposed Rule Costs

would be to force NorthWestern to evaluate postponing or abandoning previously

approved capital projects.

10.

Consequences of diverting capital to comply with the Proposed Rule

As should be clear from the preceding discussion, it is unlikely that NorthWestern could

feasibly comply with the Proposed Rule by either building replacement thermal capacity

or by attempting to recoup the Proposed Rule Costs through rate increases, and early

closure of Colstrip likely poses unacceptably high market and grid stability risks. This

leaves a re-allocation of previously committed capital outlays as the most likely

compliance scenario.

As discussed, a large fraction of the planned investments are focused on improving grid

reliability, and upgrading existing renewables. Other projects (e.g. wildfire mitigation)

have clear environmental benefits. NorthWestern had intended to perform a more detailed

examination of potential capital program consequences of the Proposed Rule, had it been

granted the requested extension of time to comment. Because that request was denied,

NorthWestern can only hypothesize in more general terms.

The adverse net environmental consequences of capital reallocations from the subjects

identified above should be obvious. The collective effect would be reduced utilization of

renewables, slowing NorthWestern’s progress toward its Net Zero 2050 objectives.

Perversely, a very plausible scenario under the Proposed Rule, if implemented in its

current form, would be to extend the life of Colstrip, and result in NorthWestern utilizing

Colstrip more heavily than in the absence of the Proposed Rule. NorthWestern has not

had the opportunity to fully calculate the emissions consequences, but there is a

significant likelihood that, as applied to Colstrip, the Proposed Rule would have the

effect of increasing net carbon and HAPS emissions over Colstrip’s remaining life than if

Colstrip is exempted from the Proposed Rule. Such a result would certainly be contrary

to the objectives of E.O. 13990.

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11.

Prejudice to NorthWestern of the Proposed Rule

NorthWestern has been materially and uniquely prejudiced by the Proposed Rule. The

2023 RTR acknowledges that Colstrip will require far more extensive and expensive

capital investments than any other facility subject to the Rule. RTR at 9. Indeed, the

entire rationale for the Proposed Rule – that existing EGUs can attain additional

emissions reductions at minimal cost – does not apply to Colstrip.

As revealed in the 2017 and 2019 ERPP’s and 2020 ERPP supplement, NorthWestern did

not plan for the Proposed Rule and Proposed Rule Costs, because it had no reason to

anticipate them. As a result, NorthWestern made major capital commitments to improve

integration of renewables, grid reliability, and transmission capacity. These all advance

NorthWestern’s progress toward Net Zero 2050. But these investments depended

critically on the assumption that Colstrip would remain an essential component of

NorthWestern’s portfolio through approximately 2042, and that major new emissions

controls to address mercury and HAPS would not be necessary given Colstrip’s

compliance with the performance objectives of the original MATS rule, the regional haze

rule, and the statutory standards in the Clean Air Act. The Proposed Rule (as well as

other regulatory initiatives detailed by Talen) would upend these assumptions.

NorthWestern also notes that the Proposed Rule, in combination with the other proposed

rules, disincentivizes superior performance. As detailed by Talen, the venturi scrubbers

control both sulfur dioxide and fPM. Colstrip has been a high performer in SO2 emission

reduction for years because of that system, but under the Proposed Rule Colstrip would

be punished for having “wrong” system to control fPM, in comparison to other facilities.

No other utility bears anywhere close to the burden that NorthWestern would bear under

the Proposed Rule. And, because Colstrip essentially serves only Montana, no other State

would bear anywhere close to the burden that Montana electricity customers would bear.

12.

Statutory and Administrative Procedure Act deficiencies with the Proposed Rule

The Proposed Rule is unlawful under Clean Air Act Section 112(d)(6). That Section

provides that EPA must take into account “developments in practices, standards, and

control technologies” in determining whether a revision in standards is necessary. EPA

purports to satisfy this requirement by citing to performance data from 2017 to 2021, and

opining that facilities have performed better and at lower costs than anticipated when the

MATS Rule was promulgated in 2012. But this dataset is selective and misleading. All

the performance and cost metrics EPA now relies on were known to EPA when it

released the 2020 RTR. EPA has withdrawn its prior “Appropriate and Necessary”

determination, but it has not withdrawn the 2020 RTR. As a result, the 2023 RTR is not

based on “developments in practices, standards, and control technologies” since the prior

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RTR, but rather only a change in policy regarding the same practices, standards, and

control technologies.

Basing revised standards simply on a policy reversal is contrary to the text and structure

of Section 112(d)(6), especially when coupled with the tight statutory compliance

deadlines provided in Section 112. The Clean Air Act envisions that both EPA and the

regulated community would be able to monitor evolving trends in emission control

technologies and practices, such that regulated could see and plan for potential upgrades

that might be needed on the horizon. But when EPA reverses course based on policy, not

technological changes, regulated entities do not have similar advance notice when

planning capital programs. This is contrary to the statute.

The Proposed Rule’s statutory deficiencies are compounded by its proxy-on-proxy

structure, where PM (a pollutant independently regulated under the NAAQS program) is

used as a stand-in for HAPS. NorthWestern understands the technical rationale for

focusing on PM rather than attempting to measure HAPS directly, but the indirectness of

the regulation is problematic given the history of the Rule. Moreover, it will not be lost

on a reviewing court that the Proposed Rule is a transparent attempt to indirectly regulate

greenhouse gas emissions in the immediate wake of West Virginia v. EPA, 142 S.Ct.

2857 (2022). For that reason, and because of its severe impacts to Montana and the

reliability of the Western Interconnection, there is a significant likelihood that a court will

subject the Rule to scrutiny under the Major Questions Doctrine. It is doubtful that EPA’s

departures from the text and purposes of Section 112(d)(6) would survive such scrutiny.

Independently of statutory and constitutional infirmities, the Proposed Rule is also

arbitrary and capricious under the Administrative Procedure Act. In addition to the

reasons articulated by Talen, the Proposed Rule and 2023 RTR takes the same practices,

standards, and control technologies as were examined in the 2020 RTR, and reaches a

polar opposite conclusion. This is textbook arbitrariness. At a minimum, the fact that

EPA has reversed course so completely in such a short timeframe likely deprives EPA of

any judicial deference it might otherwise have enjoyed. Given the unprecedented

methods deployed in the Proposed Rule to determine that the Rule would result in

positive net benefits, there is a significant likelihood that the Proposed Rule, if finalized,

would be invalidated under the APA.

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13.

Requests

As a result of the foregoing general deficiencies in the Proposed Rule and specific

injuries to NorthWestern, NorthWestern respectfully requests the following actions.

These are consistent with the concurrent requests by Talen.

(A).

EPA should abandon the Proposed Rule until technological

developments that warrant a new RTR have occurred

As explained above, the Proposed Rule is unlawful. As a result, and because of the

significant prejudice and injury NorthWestern will suffer, EPA should withdraw the

Proposed Rule until such time as a revised form of the Rule can be justified, if at all, by

advancements in practices, processes, or control technologies, as envisioned by Section

112(d)(6).

(B).

If rulemaking proceeds, EPA should create a subcategory exempting

facilities with wet scrubbers only

In the event the Proposed Rule is finalized, at a minimum the Final Rule should create a

subcategory for those facilities that employ wet scrubber control technologies without

additional ESP or fabric filter controls, and exempt them from the Proposed Rule. The

rationale of the Proposed Rule is that significant performance improvements can be

obtained through minimal equipment upgrades and costs, and that is plainly not true of

facilities that only employ wet scrubbers without additional controls. Therefore such

facilities should be subject to subcategory treatment and exempted.

(C).

If rulemaking proceeds, EPA should also create an opt-out option for

facilities that decide, within one year of the publication of the Final

Rule, to enforceably commit to closure by December 31, 2035.

If the Final Rule does not create an exempt subcategory for facilities with wet scrubbers

alone, EPA should create a retirement subcategory allowing units to continue to meet the

existing 0.03 lb/MMBtu fPM standard so long as they opt-in to the retirement

subcategory within 18 months after finalization of the rule, with a retirement date no later

than December 31, 2035 (and where continued operation after 2035 would later be

permitted if (i) the unit is essential to maintain regional grid reliability, as determined by

the Western Regional Adequacy Program, Regional Transmission Organizations,

Independent System Operators, North American Electric Reliability Corporation, or other

similar system reliability authorities; or (ii) or if EPA determines that additional time is

required to allow the unit to transition to renewable or clean energy generation). This

would provide units another compliance option and needed flexibility.

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This timeline is also necessary in NorthWestern’s case because of the prejudice

NorthWestern has experienced in the development of the Proposed Rule, and the longlead time needed for closure and planning and construction of replacement baseload

capacity. Such a timeline will also maximize the likelihood that replacement capacity will

be carbon-free rather than fossil fuel-based. In its deliberations, EPA must consider net

environmental and environmental justice consequences over all time scales, rather than

only short term objectives. This is both consistent with the law and the objectives of

Executive Orders 12898 (as updated) and13990.

Conclusion

NorthWestern is disappointed that the Proposed Rule in its current form does not achieve

its intended objectives, and that NorthWestern was deprived of the opportunity to submit

additional useful information by EPA’s denial of NorthWestern’s extension request.

Nevertheless, NorthWestern’s strong carbon-free portfolio performance and Net Zero

2050 commitments demonstrate that it shares many of the Administration’s long term

environmental objectives. NorthWestern is available to further discuss the consequences

of the Proposed Rule and potential solutions to the problems it poses. If you have any

questions regarding these comments, or would like to further engage on the subject,

please contact me at 406-443-7969 or shannon.heim@northwestern.com.

Sincerely,

Shannon M. Heim

Vice President and General Counsel

NorthWestern Energy

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