The coal plant's developer, Southern Montana Electric Generation & Transmission Cooperative, has said it is dropping plans for the 250-megawatt project at a site near Great Falls, but is considering development of a natural gas plant.
Commissioners Bill Bronson and John Rosenbaum said the city's investment in the coal plant was safe. They said the money could allow the city to buy electricity generated by the gas-fired plant.
"I don't see it as a loss situation," Bronson said. "All you're doing is you're just transitioning from one type of generation to another."
Rosenbaum said the city expects the SME to acknowledge investments in the project made so far. That might give the city the ability to buy electricity generated by the gas-fired plant, he said.
"They all go into the expenses," Rosenbaum said. "We still should be in a reasonable position."
Construction on the coal plant already had begun when SME announced last month that it was considering the switch to natural gas. SME General Manager Tim Gregori said coal would remain a future option, but that "regulatory uncertainties" related to a coal plant had made raising money for the project harder.
As for the work already done, Gregori compared the situation to building a foundation for a house, then deciding to change the configuration of the rooms inside. He said a large pit dug to hold ash from a coal plant might be used for solid waste disposal by a gas plant.
Gregg Smith, a Great Falls attorney who has questioned whether the city should be in the power business, said it would be "a very fortunate coincidence" if the natural-gas-fired plant could use the concrete foundations already built for the planned coal-fired plant.
Charles Homer, permitting and compliance manager for the state Department of Environmental Quality in Helena, said the agency has had some preliminary discussions with SME representatives about a gas-fired facility, but no application has been filed.
"They've said soon," Homer said.
Gregori said SME is in the process of preparing information that could be used to apply for a state air-quality permit for a gas-fired plant.