Montana Supreme Court hears arguments on permit for Laurel power plant

HELENA — Wednesday in Helena, advocates made their case on whether the state correctly granted NorthWestern Energy a permit for their planned power plant near Laurel.

The Montana Supreme Court met before a full audience Wednesday morning, to hear oral arguments in a case that centers on whether the Montana Department of Environmental Quality did sufficient environmental analysis when approving an air quality permit for the Yellowstone County Generation Station – a 175-megawatt natural-gas-fired plant.

Last year, a state district judge in Billings vacated the permit. It came after environmental groups challenged DEQ’s decision, saying the agency hadn’t taken the required “hard look” at issues like the plant’s greenhouse gas emissions and the impact of its lighting and noise on nearby residents.

During Wednesday’s arguments, DEQ and NorthWestern defended the permitting decision and called on the Supreme Court to reverse the district court ruling.

Shannon Heim, NorthWestern’s general counsel and vice president of federal government affairs, said greenhouse gases aren’t regulated the same way as other pollutants, so DEQ didn’t have authority to regulate them. Therefore, she argued the permit can’t be vacated simply because the department didn’t review their impacts.

“The DEQ could not, in the exercise of its lawful authority, deny the permit based on greenhouse gas emissions, because there are no legal standards for greenhouse gas emissions,” she said.

Jonathon Ambarian

Jenny Harbine, an attorney for Earthjustice, represented the plaintiffs – Montana Environmental Information Center and the Sierra Club. She argued DEQ is required to look more broadly at the possible impacts of a project, and that the emissions from the Laurel plant had to be considered in the context of the potential effects of climate change in Montana.

“Plaintiffs here are not criticizing the analysis that DEQ did do,” she said. “Our point is that there’s analysis that DEQ omitted.”

Harbine said plaintiffs are also concerned that, because the district court put a stay on its decision and NorthWestern was able to resume construction, they could begin operations without having had the full review plaintiffs believe is necessary.

Both sides in this case noted that the issues raised here overlap with those in Held v. Montana, the prominent climate change lawsuit that is also now before the Montana Supreme Court. In Held, a state district judge ruled that a law preventing regulators from considering greenhouse gas emissions in environmental reviews was unconstitutional. The 2023 Montana Legislature passed that law in response to the judge’s decision that vacated the permit for the Laurel plant.

Jonathon Ambarian

Jeremiah Langston, an attorney for DEQ, said the department had been planning to update its review in light of that law when it was blocked. He encouraged the Supreme Court to make its decision in Held and this case at the same time or somehow tie them together.

“It would be immensely helpful to DEQ to know what laws apply to its MEPA analysis for a project,” he said.

Harbine said Held gave an example of the broad impacts of the state’s policies on climate reviews, and this case provided a specific example.

“I would just urge that whether the issue is resolved in this case or in Held – or in both, which we think is most appropriate – that it be done in a manner that prevents the constitutional infringement that would be caused when that plant begins operating and emitting greenhouse gas emissions before those emissions have been studied by DEQ,” she said.

The Supreme Court generally takes no immediate action after an oral argument, and that was again the case Wednesday.

Jonathon Ambarian

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After the hearing, the conservation group Northern Plains Resource Council held a rally at the State Capitol, saying the possible impacts of the Laurel plant’s emissions need to be taken into account.

Those in attendance chanted “Clean and healthful; it’s our right!” – referring to the Montana Constitution’s guarantee of a “clean and healthful environment.”

Mary Fitzpatrick, a Northern Plains member, said people in Laurel and downwind of the plant in Billings have concerns about the potential health effects. MTN asked her what she thought would have changed if DEQ had taken a closer look at the plant’s greenhouse gas emissions.

“It’s hard to say – you know, just listening to the arguments, I got the impression that, possibly, nothing – except that we would know,” she said. “You can’t manage or change what you don’t measure.”

John Hines, NorthWestern’s vice president of supply and Montana government affairs, said the company sees the capacity of the Yellowstone County Generating Station as critical to make sure they can keep serving customers when other resources aren’t available. He said solar and wind production tends to be more unreliable during extreme weather, and that the company will be forced to pay more to purchase power on the open market if it doesn’t have a on-demand generation facility like this.

“The bottom line is we have to have enough electrons and enough gas on our system to meet our customers’ needs when it’s critical weather – and, you know, we saw that in January when it was -45,” he said. “That’s our first obligation. And none of the groups who are throwing out alternative proposals have that responsibility.”

Hines said, if YCGS had been in operation during the January cold snap, it could have saved customers about $12 million over six days. He said renewables are a significant part of NorthWestern’s portfolio, and that it’s unfair for opponents to accuse the company of building the plant for profit because they could make more profit by building the same capacity in renewable projects.

Hines said YCGS could be fully operational within the next month and a half. He said NorthWestern has taken steps to address some of the concerns neighbors have raised about lighting and noise.

“We’ve been operating Yellowstone now in a test mode for quite some time, and local people have been asking us when are we going to start the engines,” he said. “So obviously the noise issue has been abated.”