Portland General Electric Co. v. NorthWestern Co.

The federal district court for the District of Montana granted a motion for partial summary judgment by four out-of-state owners of a coal-fired power plant in Colstrip, Montana who intended to transition towards closure of the plant to comply with Oregon and Washington laws requiring electric utilities to eliminate use of coal-fired resources. The out-of-state owners—who owned a 70% interest in the plant and owned and operated the plant pursuant to a 1981 Ownership and Operation Agreement with two companies that each owned 30% interests in generating units—challenged the constitutionality of Montana laws enacted in 2021 that, among other things, require arbitration in a Montana venue under the Montana Uniform Arbitration Act for agreements concerning electrical generation facilities and require consent of all co-owners for the permanent closure of a generating unit at an electrical generation facility. The companies that owned 30% interests testified in support of the bills and were defendants in this action, along with the Montana Attorney General. The court determined that the arbitration law violated the U.S. and Montana Constitutions’ Contract Clauses and was preempted under the Federal Arbitration Act, and that the law requiring consent of all co-owners violated the dormant Commerce Clause and the U.S. Constitution’s Contract Clause.