Montana Supreme Court Orders Analysis of Climate Impact of Methane Gas Plant

The Montana Supreme Court today affirmed a district court ruling from 2023 that found the Montana Department of Environmental Quality (DEQ) did not conduct an adequate environmental review of NorthWestern Energy’s Yellowstone County Generating Station before issuing an air quality permit. The 175-megawatt methane gas plant was recently completed in Laurel, Montana, on the banks of the Yellowstone River.

MEIC and Sierra Club, represented by Earthjustice, challenged DEQ’s cursory environmental assessment of the gas plant, pointing out DEQ’s failure to disclose and analyze the serious harm that could result from NorthWestern operating the plant. The groups challenged DEQ’s failure to consider impacts from the plant on Montana’s climate as well as the harm to the local community from the plant’s constant noise and light pollution.

The Montana Supreme Court ruled that DEQ unlawfully permitted construction of the plant without first considering its harm to Montana’s environment, including from climate-harming carbon dioxide emissions. The decision comes after the Court ruled in Held v. Montana that the law that had shielded projects like the Yellowstone County Generating Station from scrutiny of their climate-change impacts was unconstitutional. As a result of today’s decision, DEQ must thoroughly consider impacts to Montana’s climate of its permitting decision.

Operation of the plant may proceed even while DEQ undertakes the court-required review of its impacts. Five justices agreed that the gas plant permit was unlawful, but only two of those justices would have invalidated the permit. The three-justice plurality opinion, which is the official decision of the court, determined that it is not appropriate to invalidate the challenged permit.

“This decision is long overdue,” said Anne Hedges with the Montana Environmental Information Center. “The climate crisis has damaged our economy, rivers, and air quality, yet the state and NorthWestern Energy continue to ignore the impacts. This decision doesn’t fix the problem, especially for the neighbors who have to live with a polluting plant on the banks of the Yellowstone River; however, it does force the state to hit the reset button and start considering the harm we are already experiencing from a rapidly changing climate due to the combustion of fossil fuels.”

“Montana’s courts are continuing to protect us from out-of-touch politicians and profit-obsessed  corporations that seek to undermine Montana’s climate and affordability with expensive, polluting energy,” said Caryn Miske, Director of Montana Sierra Club. “We’re pleased with this decision and proud of the community members who have fought this gas plant from day one. But this fight isn’t over — NorthWestern and many legislators will continue their unpopular efforts to undermine and evade environmental laws. The fight to hold NorthWestern Energy accountable and bring clean, affordable electricity for everyone continues.”

“This gas plant has an outsized impact on Montana’s environment and the Laurel community, and will continue to harm Montanans as long as it is permitted to operate,” said Amanda Galvan, senior attorney with Earthjustice’s Northern Rockies Office. “Our laws protect Montanans by requiring agency experts to scrutinize projects proposed by industry and determine whether safer and healthier alternatives are available. We are heartened that our courts continue to affirm that obligation.”

Background

In 2022, the Montana DEQ issued an air pollution permit to NorthWestern, allowing it to build and operate a large gas-fired power plant near the town of Laurel. Neighbors of the plant, MEIC, and Sierra Club raised concerns about the harmful pollution the plant would cause to the community and climate. DEQ conducted a cursory environmental review pursuant to Montana Environmental Policy Act (MEPA) that failed to disclose the potential impacts to neighbors as well as the three-quarters of a million tons of climate altering pollution that will be emitted by the plant each year.

In 2023, a Yellowstone County judge ruled that DEQ failed to consider the plant’s environmental impacts from greenhouse gas emissions within Montana and to fully consider lighting impacts to neighboring residents. The judge invalidated the permit, which temporarily stopped construction that was ongoing at the plant until DEQ complied with its legal obligations to conduct a thorough environmental analysis.

However, the Montana Legislature swiftly passed legislation that prohibited the state from considering climate impacts in MEPA reviews, forcing the district court to allow construction to resume. In another swift turn of events, the district court in Held v. State of Montana found all or part of these new laws to be unconstitutional. The Held ruling was also upheld by the Montana Supreme Court.

NorthWestern continued constructing the plant under the invalid permit and has asked the Montana Public Service Commission to charge customers for its $317-million cost.