One Rural Community’s Uncertain Energy Future, with Kelli Roemer

Notable Quotes

• Energy industries are a major source of government revenue: “When we looked at fiscal dependence in Colstrip and Rosebud County, we first looked at the property taxes in Colstrip’s taxing districts. In Montana, property taxes are the primary source of funding for local governments. After analyzing the share of the property taxes levied on the coal plant, we found that they provide nearly 50 percent of the city’s total revenues … That means $1 in every $2 that is used to fund local government or public services comes directly from that coal plant and coal-fired electricity.” (11:00)
• Revenue loss requires solutions: “Transition assistance and transition support can be organized into a few different categories: You have support for employment and dislocated workers. You have economic-development support. Then, there’s an important piece that is missing, which is revenue replacement. There are not very many options within either policy or assistance that can directly support communities in either replacing the revenue or addressing the specific impact of fiscal decline.” (14:56)
• Dependence on a single industry limits a community’s options: “When I think about the concept of community resilience, the core concern that I have is the ability of agency in the sense of the direction of your community’s future. Fiscal dependence and resource dependence undermine a community’s ability to have agency over where they’re going to go and limits the ability to transition.” (24:41)

Top of the Stack

• “The Energy Transition as Fiscal Rupture: Public Services and Resilience Pathways in a Coal Company Town” by Kelli F. Roemer and Julia H. Haggerty
• “Coal Communities in Transition: A Case Study of Colstrip, Montana” by Kelli Roemer, Daniel Raimi, and Rebecca Glaser
• Richest Hill podcast
• Fireline podcast

The Full Transcript

Daniel Raimi: Hello and welcome to Resources Radio, a weekly podcast from Resources for the Future. I’m your host, Daniel Raimi.

Today we talk with Kelli Roemer, a PhD candidate in earth sciences at Montana State University. Kelli has been working for years to understand the challenges facing rural resource-dependent communities.

In today’s episode, we’ll talk about one particularly interesting town: Colstrip, Montana. Colstrip, as its name implies, was founded to strip-mine coal and has continued to be highly dependent on coal mining and coal-fired power generation for decades. Today, as Colstrip faces an uncertain future, local stakeholders are trying to chart a path forward, but they face numerous challenges. Kelli will help us understand those challenges, as well as the options that community members are considering to diversify the local economy and provide critical public services. Stay with us.

Kelli Roemer from Montana State University, welcome to Resources Radio.

Kelli Roemer: Thank you so much for having me.

Daniel Raimi: Kelli, it’s a pleasure to have you. We are going to talk today about your work on energy-transition issues and focus on a town in Montana called Colstrip. We’re going to learn all about Colstrip today. But before we do that, we always ask our guests about how they got interested in working on energy or environmental topics. What drew you into this line of work?

Kelli Roemer: Thank you for the question. My interest in thinking about community and environmental transitions—specifically in rural resource-dependent communities—set in after undergrad, when I was in AmeriCorps in a small town in southeastern Oregon. It is a small and remote town called Lakeview. For your listeners, this might not be the lush Oregon that initially comes to mind, but it’s located on the east side of the state, near the California-Nevada border. Picture a dry, mixed-conifer forest that meets high-desert sagebrush.

Almost two decades before I got there, Lake County, Oregon, like many communities in the Pacific Northwest, had experienced economic and industrial decline that was associated with a collapse of the timber industry in the early 1990s. They lost their economic base when three out of four of the sawmills in the county closed. They are also confronting a new paradigm with respect to forest management.

In the wake of the economic shock, community members, state partners, and land managers had come together to work towards a new path forward for the community. They dedicated a lot of time, resources, and creativity that focused on community development, as well as on forest management and renewable energy development. By the time I got there in 2014 to work as a renewable energy coordinator, there were already many notable successes that you could point to that are inspiring. They had won a lot of awards for their stewardship and collaborative management approaches.

They had implemented geothermal heating districts in a lot of public buildings to reduce costs of running those buildings. They were actively recruiting a biofuel and biomass facility that aligned with their forest management goals. These were incredibly creative, innovative, and resourceful things to witness as a young person interested in this.

However, there was this persistent sense of precarity that many rural communities face. There are challenges to economic diversification in such a remote place, and there is the persistent challenge of providing and maintaining public services when you have such high costs per capita.

I left this experience as an AmeriCorps member who had only been there for 11 months, and I had a new motivating question: How can rural resource-dependent communities transition into the future, especially with respect to the economic uncertainty and environmental change that we’re experiencing. That is what brought me and motivated me to come work with Julia Haggerty in the Resources and Communities Research Group at Montana State, where I could study these questions in the context of the US coal transition.

Daniel Raimi: That applies perfectly to the subject of our conversation today, which is Colstrip. Colstrip is a rural coal-dependent community in southern Montana. Can you tell us a bit about the history of the town? When was it founded, and how has it changed over time? Why is it called Colstrip?

Kelli Roemer: This is the best question you could ask a PhD student about her case study. Colstrip is a small, remote town in southeastern Montana, has a population of about 2,200 people, and it’s located in the northern part of the Powder River Basin, which is the leading source of thermal coal in the United States. What is unique about Colstrip is that it has a remarkable set of public services and community infrastructure for its size and location: an extensive parks-and-recreation system, a medical clinic, a library. This is all a direct result of its industrial history.

Colstrip got its name from coal, when it was first established in the mid 1920s by the Northern Pacific Railway to provide fuel to steam-powered locomotives. When diesel engines replaced their steam counterparts, coal mining and the equipment idled in Colstrip for decades. It wasn’t until the 1970s, as part of the national push for the development of the West’s coal resources to supply electricity to growing West Coast cities, among other national goals, that the Montana Power Company and its subsidiary, Western Energy, sought to build this “model” company town.

This was a “model” company town aimed at overcoming Colstrip’s geographic isolation with an attractive and functional community and pleasant living conditions. This phrasing is from the plans that were advertised in the Billings Gazette articles in the late 1960s. But the town operated this way; the company built everything from water and sewer infrastructure to parks and the post office, and they maintained these services for nearly 20 years.

Daniel Raimi: The suspicion about Colstrip’s name—why it doesn’t have an a—was that it comes from the old English spelling of coal. Is that right?

Kelli Roemer: I think so. I haven’t heard anything specific about the a, but it makes sense that it was established for coal, and strip-mining is the most common practice of coal mining in that region.

Things changed for Colstrip in the 1990s. In 1997, when Montana deregulated its electricity markets and the Montana Power Company sold its generating assets, the company was effectively removed from the company town. Residents organized and voted to incorporate and extend the coal-plant property, as well as its taxable value, into the city bounds. This allowed a community of its size to take over those costs of providing those services and the infrastructure that had been established by the power plant.

Daniel Raimi: The topic of tax revenue is so important, and we’re going to come back to it. Before we do, can you tell us what are the statuses of the plant and the coal mines that operate nearby, and what are their future prospects, especially in light of the passage of the Inflation Reduction Act and the long term decline of coal in the United States?

Kelli Roemer: The Colstrip Station was built in two phases. Units 1 and 2 were built in the 1970s, and Units 3 and 4 were built in the 1980s. At one point, they had a total nameplate capacity of 2,094 megawatts. Colstrip also is a mine mouth power plant. It’s built right next to the Rosebud Mine, which supplies coal to the station via a conveyor-belt system. It also means that the power plant is that mine’s only customer.

In 2020, the older two units closed two years earlier than their previously stated date. That was a major shock to the community, who had been anticipating more time. There’s a lot of uncertainty about the remaining operational lifespan of Units 3 and 4. A full retirement of the Colstrip Station could mean closure for the Rosebud Mine. That could compound impacts of industrial closure to this small rural community.

Daniel Raimi: Can you give us a sense of how dependent the community is on the plant and the mine? What are some of the implications?

Kelli Roemer: One way to get a sense of how dependent Colstrip and other communities are on power plants and mines is with a fiscal assessment. Coal extraction and electricity generation have generated taxes, royalties, and fees to states and communities where they’re located and have provided stable and substantial revenue for decades. A big concern in many of these places is that the loss of revenue could lead to a fiscal collapse of state budgets.

When we looked at fiscal dependence in Colstrip and Rosebud County, we first looked at the property taxes in Colstrip’s taxing districts. In Montana, property taxes are the primary source of funding for local governments. After analyzing the share of the property taxes levied on the coal plant, we found that they provide nearly 50 percent of the city’s total revenues. This was in 2020. That means $1 in every $2 that is used to fund local government or public services comes directly from that coal plant and coal-fired electricity.

For the county, we did the same thing, but we also included coal extraction payments. These payments include federal mineral royalties, gross receipts, as well as property taxes. Those revenues contribute 40–60 percent of the total revenue to the county in the last 10 years. That means that at the same time communities like Colstrip experience and need to manage impacts of industrial closure, such as the loss of employment, environmental legacy issues, and loss of identity, they’re also undergoing a fiscal transition that could undercut essential resources and capacities that they need to respond.

Daniel Raimi: It’s clear the community is extremely dependent on these facilities.

I should say that a lot of what we’re talking about is coming from a paper that you coauthored with Julia Haggerty that was published recently in Energy Research & Social Science. The name of the paper is “The Energy Transition as Fiscal Rupture: Public Services and Resilience Pathways in a Coal Company Town.” We’ll have the link to that in the show notes so that people can check it out.

One of the things I’ve learned from reading your work is that decisionmaking about the future of this plant and the associated mine is complex. Can you help us understand the mix and the complexity of the stakeholders who all have a say in the plant’s future, and how that mix and complexity create planning challenges for the community?

Kelli Roemer: One of the major factors that adds a sense of complexity and uncertainty about the future of the plant has to do with the complex ownership structure of the power plant. There are six different owners of the remaining two units, and they live in different states that have different regulations and economic incentives to adhere to. Some of those owners are in states like Oregon and Washington, which have passed legislation that require them to get out of coal and exit ownership by either 2025 or 2035.

Others are pushing to keep the plant open for its remaining operational lifespan, and that adds a sense of complexity to those negotiations between those different owners. We don’t know if or when units three and four may close.

One other factor about this is that those decisions are being made out of state in rate-case settlements. That’s where closure dates, as well as potential resources to support transition, are being negotiated.

Daniel Raimi: Can you say a bit more about those resources that can help support a transition? What types of options are under consideration?

Kelli Roemer: Transition assistance and transition support can be organized into a few different categories: You have support for employment and dislocated workers. You have economic-development support. Then, there’s an important piece that is missing, which is revenue replacement. There are not very many options within either policy or assistance that can directly support communities in either replacing the revenue or addressing the specific impact of fiscal decline.

Daniel Raimi: So people know, when you say revenue, you’re referring to revenue that supports schools, local governments, and recreation facilities—stuff like that.

Let’s dig into this issue of fiscal impacts and options. Can you tell us a bit more about how this reliance on the plant and the mine for public revenues affects the decisionmaking that’s happening right now about the plant’s continued operation both today and into the future?

Kelli Roemer: I’d love to. The paper that we were talking about is focused on that relationship between the revenue and public services. By public services, I mean formal services. They’re our schools, libraries, local law enforcement, and public safety and volunteer fire departments. These are these community organizations and public services that support both emergency and day-to-day functions. They’re critical for relationship-building and the ability to organize, come together, and be resilient to change or shocks. That might be the shock of an industrial closure, but it also could be an environmental shock.

These are important components to communities, especially in rural places that have such a hard time with low populations and low population densities. The high cost per capita of providing the services and infrastructure presents a challenge to meeting community needs. When you have a community like Colstrip whose revenue is dependent on the coal plant itself, and the people work there and are connected to it, the loss of that revenue will mean substantial declines in funding for services. This means that you’re losing key resources and capacities that are necessary to respond. You could imagine that there’s a lot of resistance to a transition when you could lose the components that make your community a community.

Daniel Raimi: That makes me wonder about some of the internal dynamics and, for lack of a better word, the politics of the closure. Are the elected officials in Colstrip making efforts to try to keep the plant running as long as possible? Are they planning for a future decline? How are the local officials thinking about their options for the future? What are they doing about it?

Kelli Roemer: It’s great to put this in conversation with your question earlier about that complex ownership structure, because a lot of the decisions about what will happen to the plant when it will close are happening in spaces that are outside of Colstrip and those elected officials’ control. You could imagine the local officials being in a fairly reactive position, responding and grappling with the fiscal dependence as they face it. They’re confronting raising taxes and cutting services, as well as layoffs for public employees.

They’re confronting a lot of serious community-development decisions. At the same time, there’s a lot of uncertainty about how long they have to plan—what types and levels of services will be needed in the future. They’re making a lot of decisions in the midst of a lot of uncertainty.

Daniel Raimi: That sounds really hard. When community leaders are thinking about the future, economic development, and diversifying the local tax base, what are some of the options that are on the table? What are people talking about? Is it mainly focused on keeping the plant open, or are there other economic sectors that local folks think are viable?

Kelli Roemer: First, there are a lot of dedicated community members and stakeholders who are actively working to implement an economic diversification plan. That includes feasibility studies that could include other uses for coal or adding carbon capture and storage. But the key thing that’s still unaddressed is the revenue replacement.

I have a friend and mentor from the University of Wyoming, Roger Coupal, and he’s worked with resource communities for a long time. He likes to say that before you can get to where you want to go, you first have to reckon with how you got here. In this context, I take that to mean there’s a need to situate fiscal dependence, as well as the public service risk, within the historic development context and the policy landscape in which they were made, because that can constrain the set of choices available to local officials.

A key thing to support that transition could include a transition impact assessment that could help communities identify these risks, as well as opportunities for where different stakeholders need to be included to move forward and make decisions. Something specific that we’ve talked about, Daniel, is Colstrip’s interesting water infrastructure.

When they built the power plant in the 1970s, they needed to pipe a lot of water from the Yellowstone River, which is 30 miles from Colstrip. This water conveyance and supply system brings fresh water for the coal plant, but it also is the source of water for the city of Colstrip. All six plant owners are the owners, operators, and funders of that water infrastructure. If the plant closes, what happens to the water? Can the community take on those costs? Those are important aspects that might need other stakeholders from the state and partners to work out those types of transition pieces.

Daniel Raimi: I’d love to ask you one more question about Colstrip, and then I’m going to ask you about something else before we go to our Top of the Stack segment.

I imagine some of our listeners are listening to this conversation and thinking to themselves, “We’re talking about a small town in an out-of-the-way part of Montana. The town only exists because of coal. As we move away from coal, maybe it makes sense for that town to, essentially, fold up shop and for the people who live there to move somewhere else and find something else to do.” What do you think about when you hear views like that, which I know you have in the past?

Kelli Roemer: That is a really important question. A lot of times, when we think about managing transition impacts, we hear debates about people- or place-based strategies. People-based strategies might promote helping people buy out their mortgages and support their ability to move to where their jobs are. However, folks may take those options, but place is important to people, as many of us who might be working remote jobs can appreciate. There’ll be people who will stay in Colstrip, because they love it, and it’s home. They will need to be ensured that there are reasonable services available to them, as well as that the environmental legacies are cleaned up.

When I think about the concept of community resilience, the core concern that I have is the ability of agency in the sense of the direction of your community’s future. Fiscal dependence and resource dependence undermine a community’s ability to have agency over where they’re going to go and limits the ability to transition.

The second important thing to think about when we think about what we can learn about energy transitions from a community like Colstrip is that we’re about to embark on a major national push to build infrastructure, mine critical minerals, and develop renewable energy. We need to consider the entire industrial lifecycle of what that might entail. In Colstrip and many of these coal communities, we see the end of the industrial lifecycle from a national and regional push to develop the West’s energy resources. Ensuring that communities and regions have some agency after that resource is developed is something that I’m interested in continuing to look for solutions for.

Daniel Raimi: That’s a great point. These resource dependency issues are not going to go away because we developed a cleaner energy system. They’re certainly going to change.

One more question, which I’m very interested in, because when you’re not out there researching energy communities like Colstrip, you also do work on communicating wildland fire-incident information in Montana. That sounds fascinating. Can you tell us a bit more about what you do in that role and what fire season has been like this year?

Kelli Roemer: Thank you. As you might be able to appreciate, every graduate student needs a second job at some point. I, for the last few summers, have worked as a public information officer on a wildland fire-incident management team. There are a lot of acronyms that come with that. When a wildfire starts, an incident management team comes in, which is an organization of people and resources that can support local agencies in managing that fire and take that load off. I’m responsible for communicating fire information, facilitating public meetings, and answering those fire info lines while an incident is going on.

We’ve been fairly fortunate. This summer in Montana, we’ve had a much quieter fire season than we had last year, so I’m pretty happy with that.

Daniel Raimi: I feel like that’s true across much of the West. It seems like this year, for whatever reason, hasn’t been quite as bad as the last couple years have.

Day to day, you’re answering phones, planning meetings, and preparing communications outputs? Is that the kind of thing you do?

Kelli Roemer: What happens is that I get a phone call, and I disappear. I drop everything, stop working on my dissertation, and go to where the fire is. We set up an incident command post and work in yards or trailers with internet. That’s when the work starts. You disengage from your real life, and you are there for 15 hours a day for two weeks straight, developing daily press releases and organizing public meetings as they’re needed.

Daniel Raimi: That sounds fascinating—a podcast for another day.

Now, Kelli, before we close out, I’d love to ask you the question we ask all our guests who come on the show, which is to recommend something that they’ve read, watched, or heard that they think is great and would recommend to our listeners. What’s at the top of your literal or your metaphorical reading stack?

Kelli Roemer: I have two podcast recommendations, because they have to rep Montana Public Radio. I would love to recommend Richest Hill, which is a podcast that dives into the story of Butte, Montana. Butte has a rich labor history and rich culture that is organized around its mining history, and the podcast walks through the transition of mining and then the resulting legacy of one of the nation’s largest Superfund sites—the Berkeley Pit—and how the US Environmental Protection Agency came in and handled that. That’s a good insight into resource communities in transition.

The second one is called Fireline, which is a six-part series that focuses on all sorts of wildland fire issues facing the West, from history of suppression and the wildland-urban interface to wildland firefighters’ mental health. Both of those podcasts could make some good commute listens for folks interested in learning more about issues facing Western communities.

Daniel Raimi: Those both sound great. I’ve subscribed to both, now that you’ve recommended them.

One more time, Kelli Roemer, PhD candidate from Montana State University. Thank you so much for coming onto the show and helping us learn about your work on Colstrip and resource-dependent communities. We really appreciate it.

Kelli Roemer: Awesome. Thank you for having me.

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