Colstrip Plant Settlement: Layoffs, Grants, and County Impact

The 2016 Colstrip plant settlement between the Sierra Club, the Montana Environmental Information Center, and plant owners Puget Sound Energy and Talen Energy forced the retirement of the facility’s two oldest generating units and triggered layoffs that Montana estimated at between 233 and 289 jobs at the plant and the adjacent Rosebud coal mine.{¹} More layoffs have followed at the mine since, and workers who lose their jobs may qualify for a one-time Worker Support Grant from the Colstrip Impacts Foundation along with state and federal retraining help.

What the Settlement Required and When Units Closed

The Sierra Club and MEIC sued in U.S. District Court in Missoula in 2013, alleging major Clean Air Act violations at Colstrip. On July 12, 2016, the parties announced a settlement requiring Units 1 and 2, both built in the 1970s, to retire no later than July 2022. In exchange, the Sierra Club dismissed its Clean Air Act claims.{²}{³}

The closures happened well ahead of that deadline. In June 2019, Talen Montana announced it would retire both units in early January 2020, citing market conditions, low natural gas prices, and the cost of complying with environmental regulations. The formal retirement date was January 5, 2020, removing 614 megawatts, roughly 29% of the plant’s total output.{⁴}{⁵} Units 3 and 4 were not covered by the settlement and continue to operate.

How Many Workers Lost Their Jobs

Before the Units 1 and 2 shutdowns, the Colstrip plant and the Rosebud mine together employed about 803 full-time equivalent workers. Montana estimated the retirement of Units 1 and 2 alone would eliminate between 233 and 289 jobs across the plant and mine.{¹} Some employees transferred to Units 3 and 4; others retired or left the area. The departures reached into the school district, which lost educators whose spouses had worked at the plant.{⁶}

The Rosebud mine, which supplies coal exclusively to Colstrip, held near 400 workers from 2005 to 2016 before dropping to 320 in late 2017.{⁵} By May 2026 the workforce had fallen to 223. Westmoreland Mining, the operator, laid off more than 60 workers in the spring of 2026: 27 in March and 36 in April, after a mild winter cut electricity demand and coal sales. The company said it hoped to bring those workers back by the end of July 2026, pointing to the chance that low snowpack would reduce summer hydropower output and raise coal demand.{⁷}

The job picture could worsen significantly if Units 3 and 4 ever close. A 2018 study by the University of Montana’s Bureau of Business and Economic Research projected an average loss of nearly 3,300 jobs per year across the state over 2028 through 2043, at wages averaging roughly $79,000 — well above the state average. Eastern Montana would absorb the heaviest hit, with about 2,300 lost jobs in 2031 alone, representing roughly 4.2% of regional employment. The study projected a population decline of more than 7,000 by 2043, including nearly 2,200 school-aged children.{⁸}

Who Qualifies for the Worker Support Grant

The Colstrip Impacts Foundation launched a Worker Support Grant effective January 1, 2021. It pays a one-time amount to direct employees of the power plant, the Rosebud mine, or Rosebud Operating Service who are laid off. To qualify, you must have been employed at one of those entities on or before June 11, 2019, and you must apply within three months of your layoff date. Workers who retired, resigned, or received a severance payment exceeding 50% of their annual income are not eligible.{⁹}

The foundation also set aside a separate $10,000 grant for anyone who loses a coal job to downsizing. As of April 2022, no one had applied, reportedly because the money was tied to a broader shutdown event rather than individual layoffs.{⁶}

Other Transition Funds and Retraining Programs

Several utility settlements feed money into the Colstrip region, though most of it is not paid directly to workers. Puget Sound Energy committed $10 million for community transition planning under a 2017 Washington rate-case settlement: $7.5 million for grants and short-term loans covering worker assistance, economic diversification, and tax base replacement, and $2.5 million for an endowment. Shareholders and Washington electricity customers split the cost equally.{⁵}{¹⁰}

Avista Corporation, in a separate rate-case settlement that accelerated its exit from Colstrip, pledged $3 million to a community transition fund shared among the town of Colstrip, Rosebud County, and the Northern Cheyenne Tribe, with ratepayers and shareholders each funding half.{¹¹}

On the retraining side, the Montana Department of Labor and Industry received a $4.6 million federal POWER grant in 2017 for workforce planning and coal worker retraining.{¹²} In 2019, Senator Steve Daines announced $300,000 in Economic Development Administration grants to Rosebud County: $250,000 to provide financing to coal-impacted industries and $50,000 to develop an economic development strategy.{¹³} Between 2001 and 2018, the federal government provided roughly $4 million to the region through EDA and USDA programs.{⁵}

The Montana Coal Board, funded by the state coal severance tax, awarded more than $7 million to Rosebud County government entities between 2009 and 2020. Only about $130,000 of that, roughly 1.9%, went to explicit economic development.{} The Montana Legislature passed the Coal-Fired Generating Unit Remediation Act in 2017, requiring plant operators to submit environmental remediation plans, and in 2019 added prevailing wage standards for cleanup workers.{⁵} A proposal from Senator Duane Ankney to create a company-funded trust protecting local residents from property value loss and pension shortfalls failed to pass.{⁶}

What the Closures Did to Colstrip and Rosebud County

The plant’s role in the local economy made the layoffs especially hard on workers who wanted to stay in the area. In 2017, roughly 80% of Rosebud County’s $95 million taxable property value came from the power plant, the mine, and associated property. The retirement of Units 1 and 2 erased approximately 24% of that tax base. The state estimated annual losses of $460,000 in federal mineral royalties and $900,000 in state coal taxes from reduced production, partially offset by a projected increase of more than $750,000 in federal Payments in Lieu of Taxes.{⁵}

Researchers have described the community’s situation as “double isolation,” meaning geographic distance from any metropolitan area with a diversified economy, which limits where displaced coal workers can find comparable jobs.{¹}

What Comes Next for the Remaining Workforce

Ownership of the surviving Units 3 and 4 has consolidated quickly, which shapes the outlook for the workers still at Colstrip. Puget Sound Energy transferred its 370-megawatt stake to NorthWestern Energy effective January 1, 2026. Avista, originally planning to hold its share until 2034 through 2036, accelerated its departure by a decade after a Washington rate-case settlement and transferred its 222-megawatt stake to NorthWestern on the same date. Both transactions closed at a purchase price of zero dollars, and both departing utilities kept their obligations for environmental and decommissioning costs.{¹⁴}{¹¹} PacifiCorp and Portland General Electric, the remaining minority owners, have signaled plans to exit by 2030.{¹⁵} Talen Montana keeps a 30% stake in Unit 3 and still operates the facility.{¹⁶}

NorthWestern now holds a 55% ownership stake, making it the majority owner, and has described the facility as a “dependable bridge” to future energy resources. The company has said it intends to keep the plant running throughout its useful life, potentially as late as 2042.{¹⁴}{¹⁵} For current workers, that means plant operations continue for now, but mine employment remains tied to coal demand, which the spring 2026 Westmoreland layoffs showed can swing sharply with weather and electricity markets.

1
Western Organization of Resource Councils. Doing It Right Means More Jobs for Colstrip
2
MEIC. Colstrip Settlement Press Release
3
Utility Dive. Puget Sound Energy Agrees to Shutter Two Oldest Units at Colstrip Coal Plant
4
Great Falls Tribune. Colstrip Units 1 and 2 Shutting Down This Week
5
Resources for the Future. Colstrip Case Study
6
Montana Free Press. Shared State: Colstrip’s Next Chapter
7
Miles City Star. Rosebud Coal Mine Has Laid Off More Than 60 Workers After Mild Winter
8
University of Montana Bureau of Business and Economic Research. Economic Impact Analysis: Colstrip Units 3 and 4
9
Montana Community Foundation. Colstrip Impacts Foundation Worker Support Grant
10
MEIC. Beginning of the End for Colstrip Plant
11
KTVQ. Another Colstrip Co-owner Speeds Up Exit of Coal Plant
12
Colstrip Facts. News
13
Sen. Steve Daines. Daines Announces $300,000 to Spur Economic Development for Colstrip Communities
14
NorthWestern Energy. Colstrip Power Plant
15
Global Energy Monitor. Colstrip Steam Plant
16
Talen Energy. Colstrip Steam Electric Station