Posts Tagged ‘NorthWestern Energy’
MISSOULIAN EDITORIAL: PSC should approve wind power deal
- Published on Sunday, 04 January 2015 13:03
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December 28, 2014 7:00 am
Even as one of the biggest wind energy projects in Montana broke ground near Bridger this month, the state’s Public Service Commission was deciding to deny a contract between NorthWestern Energy and the developers of a new wind power project. That decision, if allowed to stand, bodes ill for new wind development in Montana in the immediate future.
Greenfield Wind is proposing a 25-megawatt wind-power project near Fairfield. The agreement between NorthWestern and Greenfield would allow the energy company to buy power from the wind farm for $54 per megawatt-hour for the next 25 years. That, as reports have pointed out, is less than the cost of power from the 11 hydroelectric dams NorthWestern bought earlier this year.
The PSC approved that purchase, which will provide power at a rate of about $57 to $58 per mWh — even though the deal could cost ratepayers as much as $800 million in excess costs, according to one expert analysis, and will mean a direct rate increase for NorthWestern’s electric customers of more than 5 percent.
With that recent history, it was perplexing to see the PSC get hung up on the wind power agreement on a 3-2 vote. Apparently, the three commissioners who voted against the deal have concerns that NorthWestern was putting itself on the hook to purchase energy it may not need.
NorthWestern, not surprisingly, disagrees with the commissioners’ conclusion. What is somewhat surprising is that the PSC’s own staff, after reviewing the agreement, noted that adding the wind energy from this contract to NorthWestern’s portfolio would actually result in lower costs for consumers.
It’s also worth mentioning that even as the PSC was deciding against this deal, wind power developers across the nation were seizing an opportunity afforded by Congress in the final days of the session through a wind production tax credit. The credit applies only to new projects started this year, and with only a few days left in the year, developers are hurrying to get their shovels in the ground.
The developers of the 120-turbine Mud Springs Wind Ranch in Carbon County were among them. Thanks to the tax credit, the $550 million project stands to recoup 2.3 cents for every kilowatt hour of power it produces.
Meanwhile, U.S. Sen Jon Tester, D-Mont., was among those calling for a long-term extension of wind production tax credits starting in the new year. He seems to understand that such incentives help encourage new wind power development, and that Montana, as one of the places in the nation with the most wind potential, is in a prime position to gain from increased wind development.
This kind of activity at the state and federal level helps point which way the wind is blowing. But even setting all that aside, PSC Commissioners Bob Lake, who represents the region that includes Missoula, and Travis Kavulla found nothing in the duly negotiated contract between NorthWestern and Greenfield worth killing the deal; rather, they found that the mutually beneficial settlement to be in the best interests of NorthWestern’s 340,000 ratepayers in Montana.
Greenfield officials have said they plan to ask the PSC to reconsider its decision. This time, the three commissioners who voted to deny the deal — Roger Koopman, Kirk Bushman and commission chair Bill Gallagher — ought to pay closer attention to the information provided by their own staff and the arguments of their colleagues on the commission.
North American Windpower: Alberta Breaks Wind Power Record, Then Does It Again
- Published on Wednesday, 30 July 2014 03:05
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Alberta Breaks Wind Power Record, Then Does It Againin News Departments > New & Noteworthyby Joseph Bebon Tuesday July 29 2014print the content itemCanadian province Alberta broke its wind generation record not once, but twice, last week. Between 11 a.m. and noon on Thursday, July 24, Alberta produced an average of 1,188 MW of wind power. The province then surpassed that on Friday, July 25, peaking at an average of 1,255 MW between 9 a.m. and 10 a.m. Before last week, the previous record was set on May 29, with an average of 1,134 MW.Angela Anderson, a spokesperson for the Alberta Electric System Operator AESO, explains that the most recent records were due to a combination of very windy days and new wind farms. Specifically, she says the 300 MW Blackspring Ridge project, which went online in Vulcan County in May, “allowed the system to produce more wind than ever before.”According to the Canadian Wind Energy Association CanWEA, Alberta is home to over 1.4 GW of installed wind capacity and ranks third among the country’s provinces. Tim Weis, the association’s Alberta regional director, says the new wind production records are certainly noteworthy.“This is significant, not only because it was just this past April that Alberta broke the 1,000 MW plateau for the first time, but [also because] Alberta’s electricity system is showing that it can integrate large amounts of wind energy seamlessly,” states Weis.He also mentions that the AESO lifted a 900 MW threshold for installed wind capacity in Alberta in 2007, and now wind production has peaked at over 30% more than that original limit.Furthermore, it appears wind power is poised for growth in Alberta. “There is a lot of interest in wind development in the province, and that’s expected to continue over the coming years,” comments Anderson. She says the AESO currently has 15 active wind projects totaling about 2.1 GW in the grid operator’s connection queue.Overall, the AESO anticipates wind capacity to nearly double over the next 20 years from approximately 1.4 GW to 2.7 GW. “In fact, by 2034, we are forecasting Alberta will have more wind power than coal-fired generation on the system.”Nonetheless, Weis says most new power generation in the province will likely come from natural gas, not wind. “Alberta is facing two issues simultaneously,” he explains. “First of all, federal regulations require that coal units retire when they reach their 50th birthday. Alberta’s market is over 60 percent coal, and the first units will start to hit their 50th birthday this decade.“At the same time, Alberta’s system operator is forecasting significant growth in electricity demand over the next two decades, largely as a result of the growing oil sands industry. Several independent forecasts suggest that the vast majority of new electricity supply will come from natural gas to fill this gap.”Weis points out that the price of wind power isn’t the reason, though, as the AESO estimates wind energy within 7% of gas costs. The truth is, natural gas is simply easier to build in Alberta’s electricity market because “it can more easily bid into the market and respond to changes in future costs.”But there’s a problem: Weis says forecasts suggest a big switch to natural gas will eventually undo the environmental benefits gained from closing down coal plants, with greenhouse-gas emissions starting to increase again in just over a decade.Weis argues that although the AESO has proven it can handle more and more renewable energy on its grid, the province still needs “a new policy framework that recognizes the benefits of renewables so that we can continue to see wind grow in Alberta.”
NWE seeks to pay indie power producers far less than it asks consumers to pay for dams
- Published on Monday, 28 July 2014 17:14
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July 27, 2014 12:00 am
HELENA – NorthWestern Energy and its regulator, the Public Service Commission, are rightly getting plenty of press on the company’s proposal to pay $870 million for a dozen hydroelectric dams.
But another energy issue involving both entities is flying well under the radar — and has the clear potential to affect small, independent power projects in many parts of rural Montana.
The issue is how NorthWestern buys power from these small wind and hydro projects, which, by law, are entitled to contracts if they meet certain requirements.
When it buys power from these projects, NorthWestern includes the electricity in the mix it sells to its 340,000 electric customers in Montana.
The project developers say their plants offer power that’s sometimes cheaper than what NorthWestern produces, that provides some competition to NorthWestern’s power-generation, and brings development to rural areas.
If the PSC approves the dam purchase as proposed by NorthWestern, customers will be paying the company about $60 per megawatt hour for power produced by the hydroelectric dams it owns.
But in recent filings before the PSC, NorthWestern is saying it should pay the independent projects only $40 a megawatt hour for their power.
This discrepancy has small project owners hopping mad, and crying discrimination. The power company, they say, knows if such rates are approved by the PSC, the small power projects will never be built, because they can’t be financed at that price.
NorthWestern, which has often resisted such projects, simply wants to own as much generation as possible, which means more profit for the company, and discourage any competing, independent producers, they say.
Small-project developers also point their finger squarely at a majority of the PSC, saying it has repeatedly let NorthWestern get away with undermining federal law that requires small projects to be able to sell their power to the local utility, at a fair price.
They note that the Federal Energy Regulatory Commission ruled in March that the PSC has taken illegal actions making it difficult or impossible for some small power projects to get a contract — and that the PSC has done little or nothing to correct those actions.
PSC Chairman Bill Gallagher, a Republican from Helena, says he hasn’t seen a need to rush into a decision, in response to the FERC ruling, and that the PSC must fully consider how
rates and conditions for the small-project contracts will affect the company and consumers.
He also says he has a problem with how federal law grants “preferred status” to small power projects selling renewable power. Competition among projects should be the determining factor, he says.
FERC, however, disagreed, saying the law requires contracts to be awarded at a rate set by the PSC, tied to what the utility would have to pay to buy or develop similar power elsewhere. It said the PSC cannot arbitrarily limit the amount of wind projects that get condtracts, and cannot require projects to enter into competitive bidding that, in reality, seldom occurs, and which they never win.
Still, the PSC appears finally to be moving forward on the issue, likely holding a work session later this summer to respond to the FERC ruling and related items.
Commissioner Roger Koopman, R-Bozeman, says he expects the PSC to change its rules to comply with the FERC ruling and look for a way to treat both the power company and the small-project developers equitably.
“We do not want to send the message that we want to see NorthWestern’s portfolio include their own hydro (plants) but that it doesn’t have room for (small independent power projects),” he says.
NorthWestern also has acknowledged the FERC ruling, but, at the same time, is asking the PSC to lower the price NorthWestern must pay for a proposed 25-megawatt wind project near Fairfield and other projects, to the $40 per megawatt hour range.
Company spokeswoman Claudia Rapkoch says the dams that NorthWestern wants to buy are more valuable resources than the small power projects, and therefore command higher rates.
The company wants to ensure that any power it buys from small producers is at a price that reflects the current market, and can be reliably delivered, she says.
Yet Commissioner Travis Kavulla, R-Great Falls, says actions by NorthWestern seem discriminatory against the small producers, and that he hopes the PSC will take a hard look at the issue.
“I think we need to consider righting the situation so we can be fair to all players,” he says.
Mike Dennison is a state reporter for Lee newspapers.
NorthWestern says changes would nix $900M dam deal – Bozeman Daily Chronicle: Montana
- Published on Friday, 18 April 2014 11:00
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BILLINGS, Mont. (AP) — A NorthWestern Energy executive says the utility would have to walk away from a $900 million deal to buy 11 hydroelectric dams in Montana if forced to make changes recommended by the state Consumer Counsel.
NorthWestern vice president John Hines said Thursday the company would go to the open market to get more power if the deal with PPL Montana falls through,which could drive up rates.
The Montana Consumer Counsel is a state agency that represents consumers in utility hearings. It says the deal would increase electricity bills more than twice as much as South Dakota-based NorthWestern claims.
The Public Service Commission must approve the dam sale. Commissioners on Thursday in Billings held one of a series of listening sessions on the proposal.
A public hearing is planned in July.