U.S. Won't Finance Montana Coal Plant

By Steven Mufson
Washington Post Staff Writer
Saturday, March 1, 2008

The Agriculture Department's Rural Utilities Service will not provide financing for a controversial coal plant proposed by a Montana electricity cooperative, an agency spokesman said yesterday.

The RUS, which provides low-cost financing to rural electric cooperatives, will not help Southern Montana Electric Generation & Transmission build a 250-megawatt coal-fired plant "because of cost and timing," said RUS spokesman Jay Fletcher. He would not elaborate.

The proposed plant was opposed by environmentalists, who are fighting coal plants nationwide because of their greenhouse gas emissions. But the plant, proposed in 2004, received most of the permits it needs. Co-op members said they would pursue private financing.

The RUS has been under pressure to stop subsidizing the construction of coal plants. Rural electric co-ops get 80 percent of their power from coal.

Rep. Henry A. Waxman (D-Calif.), chairman of the House Committee on Oversight and Government Reform, and Rep. Jim Cooper (D-Tenn.) last month asked the RUS for information about its loans to power plants. They said they were "concerned that financing these huge new sources of greenhouse gas emissions puts taxpayer dollars at risk, as well as undermines the United States government's efforts to address global climate change by reducing greenhouse gas emissions."

The RUS has not provided financing for a new coal plant since fiscal 2006, Fletcher said.

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