NorthWestern Energy is proposing to buy or build 750 megawatts of new power-generation for Montana customers – twice what it has now – and says it will decide what type after getting bids in a process beginning soon.
The company’s initial power-procurement plan, which has a public hearing before the state Public Service Commission Monday, said new natural gas-fired plants will best meet the state’s electricity needs in the next 20 years.
Critics of the plan have said it’s over-reliant on fossil fuels like natural gas, and that it doesn’t account for the possible future closure of coal-fired plants at Colstrip.
Now, however, NorthWestern officials say they’re open to whatever type of project will meet system needs into the future, at the best price.
“What we’ve called out for in this procurement plan is an all-source, that means any type of generation or energy efficiency, to bid in our competitive solicitation,” said John Hines, NorthWestern’s vice president for supply and government affairs. “We’re now going out for the competitive solicitation to let the market provide the actual data.”
Still, Hines said what’s needed are resources that provide “24-7 power” that can be ramped up quickly, to meet peak consumption on cold winter days or hot days in the summer.
Renewable-energy sources like wind or solar tend to be “intermittent” and may not meet that need, he said.
Critics of the plan are challenging that assumption, saying that new technology, such as solar- or wind-power plants with battery storage, can provide power that’s not only available when needed, but also cheaper.
“It’s pretty clear that they underestimated the costs of new fossil-fuel gas plants (in the initial plan),” said Brian Fadie, clean energy program coordinator for the Montana Environmental Information Center in Helena. “When you burn the gas for electricity, it still produces carbon emissions, which are bad for our climate, and that fuel – there’s a risk that the price will spike for that gas.
“Wind and solar don’t have the same economic risk, because they have no fuel cost.”
In the wake of next week’s hearing on NorthWestern’s plan, the PSC will formulate its own comments on the company’s proposed direction for power development.
However, the PSC has no power to change it or tell NorthWestern what to do. The company will decide which power resources to acquire and then seek approval from the PSC for those individual projects.
“The procurement plan is essentially a first look at the road-map that the utility has put out there,” says Commissioner Roger Koopman, R-Bozeman. “I think we just need to keep an open mind about it and recognize that different parties and different interests have different perspectives on what they’d like to see in terms of our (energy) future.”
NorthWestern’s plan is proposing a dramatic increase of what it owns or controls, in terms of electricity generation – 750 megawatts over the next five years.
Hines told MTN News this week that the company sees a tightening market for power in the region, with planned closures of several coal-fired plants, and that NorthWestern doesn’t want to be buying as much power for customers on the open market as it does now.
At peak-consumption periods, NorthWestern buys about half the power it needs on the open market.
Renewable-power projects can provide electricity, but perhaps not on a consistent basis when it’s most needed, Hines said.
“I need to be able to feel comfortable that we have power available when it’s 40-below zero and people are relying on electricity to heat their homes,” he said. “And, right now, the lowest-cost means of achieving that has been thermal (coal and gas), for those critical time periods.”
While the initial plan said natural-gas plants are the best alternative to fill the need, NorthWestern, in response to public comment, decided to have an open bidding process starting within the next two months, for any type of power.
“The competitive solicitation will be the one that actually determines which resources are chosen,” Hines said.
Yet Fadie said NorthWestern’s plan and its modeling favored natural gas – and he’s worried that the company is predisposed to choose gas plants.
“They might say that any type of plant can bid in, but that (request for proposal) is likely to be heavily shaped by the plan,” he said.
He also noted that NorthWestern continues to insist that a Colstrip plant will operate for the next 20 years, providing power for NorthWestern, and makes no plan to replace that power should Colstrip close or replace it with cheaper power – at the same time other utilities are abandoning Colstrip.
“That’s a risk to consumers to have that blindness to this obvious situation that’s developing,” Fadie said.
Hines, however, insisted that Colstrip-generated power remains cheaper than acquiring an entirely new resource – which is what would have to happen if that 225 megawatts of power goes away.