Great Falls lands $470 million coal-fired power plant – City’s work force, water access hailed

Great Falls will be the site of a new, 250-megawatt coal-fired power plant that will supply municipal operations in Great Falls and 100,000 Montanans beginning in 2008, an electric cooperative board decided here Friday.

"This is bringing public power to Montana in a very special way," said Tim Gregori, general manager for Southern Montana Electric Generation and Transmission Co-op.

By MIKE DENNISON
Tribune Capitol Bureau

http://www.greatfallstribune.com/news/stories/20040619/localnews/679176.html

The plant, planned for a site east of Great Falls, would be the first major coal-fired plant built in Montana in 30 years. It would use Montana-mined coal to provide electricity for Montana consumers, Gregori said.

The co-op that plans to build the $470 million plant includes the city of Great Falls as a member. The plant initially would provide power for city operations such as the water plant, swimming pool and city offices.

Great Falls Mayor Randy Gray, who was in Huntley for the Southern Montana Electric G&T Co-op board meeting and announcement Friday, said it’s his hope that power from the plant eventually could supply Great Falls businesses and residents.

"We’re tremendously excited about being able to create this partnership and carrying it to the next step of actually building a plant here in Montana that uses Montana coal to generate Montana electricity to power Montanans," he said.

Southern Montana is a new co-op formed last year by five rural electric cooperatives in Montana to search for a power source to replace their electricity contracts that begin to expire in 2008.

The co-ops serve 100,000 Montanans, from the Tongue River area along the Montana-Wyoming border to Fergus County in central Montana. They are "member-owned," which means the customers are the owners of the nonprofit co-ops.

The city of Great Falls decided to join the Southern Montana co-op last year, to get in on possible lower-cost power for its operations and city residents.

Southern Montana co-op has been searching the power markets for possible supply contracts, but eventually concluded that building a new plant in Montana would be just as cost-effective, Gregori said.

"We will have stable rates that will not be subject to market whims and market forces," he said.

He said Southern Montana plans to apply for key permits this year. Money for the project will come from co-op financing banks and the city of Great Falls, which plans to issue revenue bonds. Great Falls plans to finance 17 percent of the plant, Gray said. That means the city would have the rights to 30 to 40 megawatts of the power produced by the plant.

Coal for the plant — about 1.1 million tons a year — would come from existing Montana mines, Gregori said.

Co-op board members chose Great Falls over three other possible sites: west of Circle, Hysham and Decker.

Gray said Great Falls was the best site because it had the best access to water, rail links, transmission lines and a work force for the huge construction job. As many as 400 people will be employed during the construction and 65 permanent jobs will be needed to operate the plant.

"It’s a good deal because it’s a reliable, affordable source of power that we need, regardless of where it’s located," Gray said. "But the bonus to us is that a half-billion-dollar construction project is a big deal, in anyone’s back yard."

Gray and other co-op officials also said siting the plant in Great Falls greatly reduced the cost of construction. Original estimates for the plant had been as high as $600 million, but will be lower for the reasons Gray listed.

The plant site is on 195 acres just east of town, on the southern side of the Missouri River. There is enough room to build a companion 250-megawatt power plant on the same site, although that’s not on the drawing board now, co-op officials said. The plant, however, must jump through many environmental hoops before it is approved and built.

Co-op officials said they plan to talk directly with leaders of groups such as the Northern Plains Resource Council and the Montana Environmental Information Center, to convince them that the plant is good for the state and environmentally sound.

The plant will burn sub-bituminous coal and use a "clean coal" technology that uses ground limestone to reduce polluting emissions.

"Our plant will be fully compliant with existing and proposed air-quality standards," Gregori said.

He also said the plant is much different than the failed gas-fired power plant project north of Great Falls. NorthWestern Corp., which is now in bankruptcy, proposed that 250-megawatt plant in 2001, at the height of the Western power-price crunch. It was intended originally to supply Montana industrial customers and other regional buyers of electricity. When regional prices crashed, NorthWestern proposed using power from the plant to supply Montana residential and small-business customers. But the Montana Public Service Commission rejected the initial contract as too expensive and "not in the public interest."

Gregori said the coal-fired plant proposed by the co-ops differs because it has a dedicated "load" or customer base already in place, and is not based on any speculative factors. It also doesn’t have to ship power out of state, and therefore doesn’t face any transmission problems, he said.

Dennison can be reached by e-mail at [email protected], or by phone at (406) 442-9493.