The Montana Supreme Court ruled Friday that state regulators failed to conduct an adequate environmental review of NorthWestern Energy's Laurel natural gas plant, but the plant is allowed to continue to operate.
The high court's ruling affirmed the 2023 decision of Yellowstone County District Court Judge Michael Moses, who ruled that the Montana Department of Environmental Quality did not properly consider greenhouse gas emissions, which contribute to climate change, caused by the plant.
The state must now move forward with the court-required review of the plant's impacts. While not every project in Montana will be required to undergo such a review, justices felt it appropriate for something as large as the plant along the Yellowstone River in Laurel, which is expected to generate nearly 770,000 tons annually of carbon emissions.
But the court also reversed a part of Moses' decision to revoke the plant's permit— a move cheered by NorthWestern.
"Today’s Montana Supreme Court’s decision reinstating the Yellowstone County Generating Station permit will help ensure reliable energy service and keep bills as low as possible for our customers. This is good news for Montanans already relying on the critical, cost-saving capacity of the 175-megawatt Yellowstone County Generating Station, including for power during this first winter storm of 2025," a NorthWestern Energy spokesperson said in a statement.
The seven-member court was divided in its ruling. Three justices, Beth Baker, Mike McGrath and James Jeremiah, wrote the plurality decision, which stands as the ruling of the court. Justices Dirk Sandefur and Jim Rice agreed that the plant's permit should not be revoked but were not in favor of a more extensive environmental review. Justices Laurie McKinnon and Ingrid Gustafson were in favor of the extended review but argued the utility's permit should be revoked.
The 175-megawatt plant, known as the Yellowstone Generating Station, began generating electricity for the grid in March 2024 after it was tied up in the courts for most of this decade.
Two environmental groups, the Montana Environmental Information Center and the Sierra Club, filed suit in 2021 after the DEQ granted NorthWestern Energy its initial permit.
Those groups praised the justices' decision, noting that another recent decision by the court in the landmark Held v. Montana case
“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.”
The court's decision comes just weeks after its ruling in the landmark Held v. Montana case, where justices decided in favor of a group of youth suing for the right to a clean environment.
The plaintiffs had argued that a 2023 Montana law, House Bill 971, which sought to shield projects such as the Laurel plant from extensive environmental reviews, was at the heart of their case.
