PPL Montana and Puget Sound Energy, co-owners of the Colstrip Power complex in Montana, said in a statement that it has entered into a long-term agreement with Western Energy Company, a division of Westmoreland Coal.
The output from Rosebud will specifically be shipped to Colstrip’s Units 1 and 2. While the company’s current contract will not expire for another two years, this one will take effect immediately after and will provide 100% of the units’ requirements, approximately 3 million tons annually.
“We are pleased to have reached this agreement with WECO,” said PPL Montana vice-president Brad Spencer.
“This will enable the plant to continue to produce the maximum amount of electricity at the lowest possible cost and in an environmentally sound manner over the long term."
He also said the longstanding agreement could end up being even longer if some elements remained positive.
“Current mining projections indicate that this agreement will cover coal supply through at least 2019,” Spencer said.
“Depending on future mining cost and quality, the total coal reserve at the Rosebud Mine could allow the agreement to extend as long as 2028.”
The current contract between the two companies for the units has existed since the mid-1970s and will expire December 31, 2009.
PPL Montana, with a total capacity of more than 1200 megawatts, also operates a coal-fired facility in Billings as well as 11 hydro-electric plants.