Portland, Ore., — Portland General Electric Company (NYSE: POR) along with other Pacific Northwest owners of the Colstrip Generating Station, located in Colstrip, Montana, expanded a federal lawsuit challenging the constitutionality of two bills signed into law earlier in May by Montana’s governor, both of which attempt to impair long-standing contractual agreements amongst the co-owners of the Colstrip plant.
“We believe the courts will agree that these laws are unconstitutional on multiple levels,” said Lisa Kaner, PGE vice president and general counsel.
Montana Senate Bill 266 attempts to penalize and restrain the Colstrip plant co-owners from exercising their contract rights to make decisions under the existing ownership and operations agreement by giving Montana’s Attorney General the authority to levy punitive fines and to seek injunctions against the co-owners.
The amended lawsuit seeks an injunction prohibiting Montana’s Attorney General Austin Knudsen from enforcing Senate Bill 266, as well as a declaration that Senate Bill 266 violates the Commerce, Contract, and Due Process Clauses of the United States Constitution.
Along with PGE, plant co-owners Avista Corp., PacifiCorp, and Puget Sound Energy, Inc., filed the initial lawsuit on May 4, 2021, over Senate Bill 265, which threatens the contractual rights of the Colstrip plant co-owners by attempting to void parts of the arbitration process outlined under their existing ownership and operations agreement. Both the U.S. and Montana constitutions prohibit any law that substantially impairs the obligations of existing contracts. NorthWestern Corporation and Talen Montana, LLC are also co-owners. The amended lawsuit names NorthWestern, Talen and the Montana Attorney General as defendants. Talen and NorthWestern lobbied in favor of both laws. All six co-owners are involved in an arbitration that NorthWestern initiated earlier this year.
“We believe there is a path to protecting our customers, the community of Colstrip, electric customers in Montana, and the rule of law,” said Kaner. “We hope to be involved in Montana for many years to come, just as we have for past decades. This lawsuit should help to ensure companies of all types feel confident in continuing to build businesses in Montana.”