Coal, Current, and Consequence:

The History of Colstrip, Montana

Origins in the Earth: The Fort Union Formation and Early Indigenous Presence

The story of Colstrip begins not with human settlement but with geology. Tens of millions of years before the first Northern Pacific locomotive crossed the Montana plains, shallow inland seas and forested swamps deposited organic material across what is now southeastern Montana. Over geologic time, these accumulated layers of organic matter compressed and transformed into the coal-bearing strata of the Fort Union Formation, a vast Paleocene-age deposit lying beneath much of the northern Powder River Basin. Within Rosebud County, the Rosebud and McKay coal beds of the Tongue River Member of the Fort Union Formation proved to be among the most accessible and economically significant seams on the continent. The coal is sub-bituminous in character, with a heating value of approximately 8,500 British thermal units per pound, and notably low in sulfur content, which would later make it attractive to utilities facing stricter federal air quality standards (Affolter and Hatch; Federal Register, 30 Nov. 2018).

Long before industrial interests arrived, the land occupied by what would become Colstrip was home to the Crow people. From roughly 1700 onward, this portion of the Yellowstone drainage lay within Crow territorial lands. Crow oral tradition and early cartographic records suggest the area held meaning within the tribe’s geographic and spiritual understanding of the region. The place that would later be named for its industrial function was known among the Crow by two distinct names: “Where the Enemy Camps” and “Where the Colts Died” (Hanson, “Power Source”). The arrival of the Northern Pacific Railway in the late nineteenth century, backed by federal land grants across millions of acres of the northern plains, would eventually displace these Indigenous relationships to the land in favor of extraction. That transition, repeated across the American West, was not an incidental feature of the railroad economy but a condition of it.

The Railroad’s Mine: 1924 to 1959

In 1923, the Northern Pacific Railway entered into preliminary extraction contracts with the Foley brothers for coal lands within its federal grant territory in Rosebud County. The following year, 1924, the railroad formally established Colstrip as a company town, building worker housing, a school, and basic community infrastructure to support the new mining operation (Federal Register, 30 Nov. 2018). The name itself is a compressed description of the industrial method: “col” from coal, “strip” from strip mining, the technique by which overlying earth, or overburden, was removed to expose the shallow coal seams below.

The Rosebud Mine’s coal seam sits beneath an average of roughly one hundred feet of overburden and measures approximately twenty-four feet in thickness (Western Energy Company, “Tour Fact Sheet,” 2007). The flatness of the terrain made strip extraction comparatively efficient, eliminating the costly tunneling required in deeper shaft mines and reducing exposure to the labor disruptions and cave-in risks that plagued underground operations elsewhere. Steam shovels and early mechanical draglines allowed a relatively small workforce to move enormous quantities of material.

Through the 1920s, 1930s, and the wartime years of the 1940s, the Northern Pacific’s Colstrip operation fed coal steadily to the railroad’s steam locomotive fleet. During the Second World War, the mine was identified as a strategically vital supply point for the Northern Pacific’s wartime freight operations (Federal Register, 30 Nov. 2018). Over the initial thirty-four years of operation, the railroad extracted approximately forty-four million tons of coal from the Colstrip deposit (Federal Register, 30 Nov. 2018). By the late 1950s, however, the transition to diesel-powered locomotives had rendered the operation obsolete for the railroad’s purposes. Steam engines disappeared from the Northern Pacific’s mainline runs, and the demand that had built Colstrip evaporated almost entirely. Mining ceased. The town, which had grown to perhaps sixty houses, two churches, a school, and a grain elevator, fell into a period of quietude (Ultimate Montana, “Colstrip”).

In 1959, the Northern Pacific sold its coal leases, mining machinery, and the townsite itself to the Montana Power Company, a Montana-based utility with its own plans for the Powder River Basin’s reserves (Hanson, “Power Source”). The transaction transferred not merely a set of physical assets but the entire logic of the community, one of the more complete examples of a company town structure surviving from the early twentieth century into the postwar era.

The Second Colstrip: Montana Power and the Energy Boom, 1959 to 1980

For nearly a decade after the 1959 sale, the Colstrip mine remained largely dormant. Montana Power, through its subsidiary Western Energy Company, resumed operations in 1968, initially supplying low-sulfur coal to utilities and industrial customers seeking to comply with emerging federal air quality standards (Hanson, “Power Source”; Roemer). As national energy markets tightened in the late 1960s, and as Pacific Northwest utilities began to anticipate the limits of regional hydroelectric capacity, a more ambitious vision for Colstrip took shape.

In the early 1970s, Puget Sound Energy, the largest electric utility in Washington state, joined forces with Montana Power to construct two coal-fired generating units at the mouth of the Rosebud Mine. The design was deliberately mine-to-mouth: coal would travel from the extraction site directly to the generating facility with minimal transportation cost, making electricity generation economically viable at a geographic remove from major population centers. Colstrip Units 1 and 2, each contributing to a combined capacity of 614 megawatts, were commissioned in 1975 and 1976 respectively (NS Energy Business, “Colstrip Power Plant”). The power they generated would flow westward through an extensive transmission corridor to Washington and the Pacific Northwest, crossing nearly 800 miles of mountain and prairie.

Montana Power simultaneously undertook a deliberate reconstruction of Colstrip as a planned community. In advertisements appearing in the Billings Gazette in the late 1960s and early 1970s, the company described an ambitious model company town designed to overcome the geographic isolation of southeastern Montana through attractive housing, community facilities, and modern infrastructure (Roemer). The rebuilt Colstrip featured wide, clean streets, subsidized services including garbage, water, and sewer, a community center with a swimming pool and gymnasium, and a nine-hole golf course, all underwritten by the corporations that owned the generating assets (Montana Living, “Our Towns”). These amenities were not acts of civic generosity in the conventional sense; they were instruments for attracting and retaining a skilled workforce in a remote location.

Resistance and Legal Challenge: The Environmental Decade

The construction of Units 1 and 2 did not proceed without opposition. As early as 1972, eastern Montana ranchers organized in response to what they perceived as a wave of industrial encroachment threatening agricultural land, water, and air quality. That year, a coalition of ranching families formed the Northern Plains Resource Council, a nonprofit organization dedicated to scrutinizing coal development across the region (Northern Plains Resource Council, “Montana Constitution”). Among the Council’s founding concerns was the proposed construction of Colstrip Units 1 and 2 without adequate environmental review. Attorney Leo Graybill, who had served as president of the 1972 Montana Constitutional Convention, later became a significant legal ally of the Northern Plains, pursuing challenges to Colstrip’s expansion on behalf of Rosebud County residents (Northern Plains Resource Council, “Montana Constitution”).

The Council’s initial legal challenges focused on the absence of adequate environmental impact statements under the newly enacted Montana Environmental Policy Act, the state-level analogue to the federal National Environmental Policy Act. A district court issued a permanent injunction, and on appeal, the Montana Supreme Court in 1976 affirmed the lower court’s ruling, giving MEPA substantive legal force for the first time (Public Land and Resources Law Review, University of Montana). The decision did not ultimately halt Units 1 and 2, which proceeded to completion, but it established a legal precedent that would shape the review of all subsequent industrial development in the state.

The far larger Units 3 and 4, each rated at 734 megawatts, faced a protracted approval process running through the mid-1970s. Wally McRae, a rancher and cowboy poet from Rosebud County who became one of the most recognizable voices of the opposition, articulated the core grievance plainly: utility companies in Washington and Oregon would profit from the electricity while Montana communities bore the environmental costs. “Water was always the primary environmental concern,” McRae said. “They were creating a problem and we would bear the brunt of it” (Seattle Times, 6 Mar. 2018). The State of Montana’s Department of Natural Resources and Conservation conducted a 600-day environmental review of the Units 3 and 4 application under the Major Facility Siting Act. The department issued its final environmental impact statement in January 1975, and construction eventually proceeded (Public Land and Resources Law Review, University of Montana). Units 3 and 4 were commissioned in 1983 and 1985 respectively, bringing the plant to its full generating capacity of 2,094 megawatts (NS Energy Business, “Colstrip Power Plant”).

At peak operation, Colstrip became the second-largest coal-fired generating facility west of the Mississippi River, its four stacks rising more than 500 feet above the rolling eastern Montana landscape (Montana PBS, “Coal Mining in Colstrip”). Approximately two-thirds of the electricity generated was exported to the Pacific Northwest via a twin 500-kilovolt transmission corridor connecting eastward Montana to the Bonneville Power Administration’s system in Washington and Idaho (NS Energy Business, “Colstrip Power Plant”). For the residents of Colstrip, the expansion brought population growth, economic stability, and a community identity inseparable from industrial energy production.

Ownership, Economics, and the Long Decline: 1990s to 2020

The corporate structure surrounding Colstrip shifted substantially in 1998, when Montana Power sold the generating units to a consortium led by PPL Corporation, a Pennsylvania-based power company, and Puget Sound Energy. That same year, the Rosebud Mine was sold to Westmoreland Mining LLC, and the City of Colstrip was formally incorporated as a municipality, ending its status as an unincorporated company town (Justapedia, “Colstrip, Montana”). The 1998 restructuring coincided with Montana’s broader experiment with electricity deregulation, a policy that ended badly when Montana Power divested its generating assets, pivoted to a telecommunications venture called Touch America, and collapsed into bankruptcy by 2003.

The environmental liabilities accumulated by decades of coal combustion at Colstrip became increasingly difficult to defer. State environmental officials and environmental organizations had long known that the plant’s coal ash storage ponds, sprawling across 462 acres adjacent to the generating facility, were leaking. Contaminated water from these ponds, carrying sulfates, boron, selenium, and heavy metals, was seeping into groundwater at an estimated rate of 400,000 gallons per day (KTVQ, “Montana DEQ Approves $107M Plan”). In 2008, the plant’s owners at that time paid $25 million to settle a lawsuit brought by fifty-seven Colstrip residents whose groundwater had been contaminated (Montana Environmental Information Center). The settlement did not compel operational changes. It was not until 2012 that the Montana Department of Environmental Quality issued an Administrative Order on Consent requiring investigations and remediation plans for the three distinct contaminated areas at the site (Montana DEQ, “Settlement Agreement,” 2021).

The economic case for Colstrip had also begun to erode. Western energy markets were being reshaped by abundant, cheap natural gas and rapidly falling costs for wind and solar generation. The utilities that had built Colstrip Units 3 and 4 to serve Pacific Northwest ratepayers were under increasing pressure from Washington and Oregon climate legislation requiring divestment from coal. Westmoreland Mining, which operated the Rosebud Mine, filed for bankruptcy in 2019 as coal’s market share continued to contract (Billings Gazette, “Shutdown of Colstrip Units 1 and 2 Is Underway”). In June 2019, Talen Energy, the Pennsylvania-based company then operating the plant, announced that Units 1 and 2 would close permanently. The shutdown was completed in January 2020. With it, more than one hundred plant jobs vanished, and the community of approximately 2,300 people confronted a new and uncertain future (Missoula Current, “Colstrip Power Unit 1 Shuts Down”).

The Remaining Units and an Unresolved Future

As of 2026, Units 3 and 4 continue to operate under a substantially altered ownership structure. By January 2026, NorthWestern Energy, Montana’s largest regulated utility, had acquired the departing ownership stakes of both Puget Sound Energy and Avista Corporation, bringing its total share in Units 3 and 4 to fifty-five percent (NorthWestern Energy, “Colstrip Plant”). NorthWestern has stated its intention to operate the remaining units as baseload generation through approximately 2042, arguing that no equivalent, reliable source of carbon-free electricity is yet commercially available to replace the plant’s output for Montana customers (NorthWestern Energy, “Colstrip Plant”).

Environmental cleanup obligations remain substantial and unresolved. The Montana DEQ has estimated the high-end cost of groundwater remediation at the coal ash pond sites at $700 million, with plant owners required to post bonds totaling $304 million (Montana Standard, “Coal Ash Cleanup Advances”). Cleanup work is expected to require decades of flushing, capture-well operation, and eventual ash excavation and reburial in lined landfills above the water table. Neighboring ranchers, whose livestock depend on groundwater that cannot be replaced by the Yellowstone River pipeline serving the town, remain exposed to contamination that no current remediation timeline has fully addressed (Clean Up Talen).

Colstrip thus occupies a position familiar in Montana history: a community whose existence was created entirely by extractive corporate investment, which was reshaped by successive waves of ownership restructuring, and which now confronts the costs of that history while its future remains contingent on decisions made largely by interests based outside the state. The hundred years between the Northern Pacific’s first steam shovels and NorthWestern Energy’s majority acquisition have produced enormous quantities of electricity, billions of dollars in revenue, and a complicated legacy of contamination, community, and contested obligation. What they have not produced is a settled answer to the question of what Colstrip becomes when the coal runs out or the market finally closes.

Works Cited

Affolter, Ronald H., and Joseph R. Hatch. Chemical Analyses of Coal and Coal-Associated Rock Samples from the Rosebud and McKay Coal Beds, Tongue River Member of the Fort Union Formation, Colstrip Coal Deposit, Rosebud County, Montana. U.S. Geological Survey Open-File Report 79-1098, 1979. https://doi.org/10.3133/ofr791098. Accessed 19 June 2026.

Federal Register. “Notice of Intent to Prepare an Environmental Impact Statement for the Western Energy Company Rosebud Mine Permit Area F.” Vol. 83, No. 231, 30 November 2018, pp. 61671-61674. https://www.govinfo.gov/content/pkg/FR-2018-11-30/pdf/2018-26011.pdf. Accessed 19 June 2026.

Hanson, David T. “Power Source: The View from Colstrip, Montana.” Aperture, vol. 106, Spring 1987. Published online by Places Journal, 14 July 2011, https://placesjournal.org/article/colstrip-montana/. Accessed 19 June 2026.

Montana Department of Environmental Quality. “DEQ Reaches Settlement Agreement for Cleanup of the Units 1&2 Coal Ash Ponds at Colstrip Power Plant.” Montana DEQ Press Release, 19 October 2021. https://deq.mt.gov/News/pressrelease-folder/news-article38. Accessed 19 June 2026.

Montana PBS. “Coal Mining in Colstrip.” The Rundown with Beth Saboe, Montana Public Broadcasting Service, 2016. https://www.montanapbs.org/programs/rundown/101/. Accessed 19 June 2026.

Northern Plains Resource Council. “The Montana Constitution and Northern Plains: Protecting Our State Since 1972.” Northern Plains Resource Council, 26 October 2022. https://northernplains.org/the-montana-constitution-and-northern-plains-protecting-our-state-since-1972/. Accessed 19 June 2026.

NorthWestern Energy. “Colstrip Plant.” NorthWestern Energy, 2026. https://www.northwesternenergy.com/clean-energy/where-does-your-energy-come-from/electric-generation/colstrip-power-plant. Accessed 19 June 2026.

NS Energy Business. “Colstrip Power Plant, Rosebud County, Montana, USA.” NS Energy Business, 27 December 2019. https://www.nsenergybusiness.com/projects/colstrip-power-plant-montana/. Accessed 19 June 2026.

Roemer, Kelli. “One Rural Community’s Uncertain Energy Future.” Resources Radio, Resources for the Future, 22 November 2022. https://www.resources.org/resources-radio/one-rural-communitys-uncertain-energy-future-with-kelli-roemer/. Accessed 19 June 2026.

Siegel, Mike. “As Washington State Looks for Cleaner Power, a Montana Coal Town Faces an Uncertain Future.” The Seattle Times, 6 March 2018. https://www.seattletimes.com/seattle-news/environment/as-washington-state-looks-for-cleaner-power-a-montana-coal-town-faces-an-uncertain-future/. Accessed 19 June 2026.

University of Montana School of Law. “The Montana Environmental Policy Act and the Colstrip Litigation.” Public Land and Resources Law Review, vol. 1, 1980, pp. 1-30. https://scholarworks.umt.edu/cgi/viewcontent.cgi?article=1679&context=plrlr. Accessed 19 June 2026.

Western Energy Company. “Rosebud Mine Tour Fact Sheet.” Presented to the Montana Energy and Telecommunications Interim Committee, 2007. Montana Legislature, https://archive.legmt.gov/content/committees/interim/2007_2008/energy_telecom/meeting_documents/ETICWesternEnergypresent.pdf. Accessed 19 June 2026.