News
PSC OKs wind power plan, but sets rates too low
The Montana Public Service Commission approved a contract Wednesday for a major wind project in Jefferson County but set the price for the electricity so low that the wind-power developer said it isn’t realistic to build the $65 million project at that rate.
By CHARLES S. JOHNSON
Gazette State Bureau
On a 3-2 vote, the PSC approved an order in the application of Whitehall Wind LLC, an affiliate of Navitas Energy Inc., of Minneapolis, to be an independent power producer for NorthWestern Energy. Under the designation, NorthWestern Energy would be required to buy electricity from Whitehall Wind, but at a short-term rate of $10 per megawatt hour, which is about one-third of what Navitas Energy had sought.
Navitas Energy had suggested three price rates to the PSC – $32.75, $31.65 and $28 a megawatt hour, all lower than the rate NorthWestern customers in Montana now pay – but the PSC instead chose the $10 rate. The PSC staff said the $10 per megawatt hour is the appropriate short-term rate under the law from NorthWestern’s power purchase schedule.
"We’re not happy," said Chris Moore, Navitas Energy’s director of development. "We think that the PSC is going against ratepayer interests. We believe they are going against their own rules, state rules, federal rules."
The company is figuring out what its next steps are and where to appeal the ruling, Moore said.
Whitehall Wind has proposed building a 50-megawatt wind farm northeast of Whitehall. Navitas also is considering building a plant in Montana to manufacture wind turbines or turbine blades in Montana.
"If we can do the kind of business that we think we can do in Montana, it would make sense to do something like that," Moore said, but not at $10 per megawatt hour.
Navitas Energy unsuccessfully sought to be part of the default supply portfolio that NorthWestern Energy, which bought Montana Power Co.’s utility business earlier this year, was assembling to supply its 290,000 electricity customers.
Rebuffed on that front, the company tried an alternate route and sought PSC designation as a qualifying facility or independent power producer. Under the controversial 1978 federal law aimed at encouraging alternative energy plants, utilities are forced to buy power from qualifying facilities whether they want or need the power at a rate set by the PSC.
PSC attorney Martin Jacobson told the commission that federal and state laws require NorthWestern as the default suppler to take the power offered by the independent power producer, Whitehall Wind.
"It is essential that our legislative preferences not get in the way of our judicial preferences," Jacobson said.
Voting for the order were Commissioners Bob Rowe, D-Missoula; Bob Anderson, D-Helena, and Gary Feland, R-Shelby. Opponents were Commissioners Matt Brainard, R-Florence, and Jay Stovall, R-Billings.
"If the power is delivered at that short-term rate, that is virtually assured of being good for customers," Rowe said, but he added that it’s not the rate Whitehall Wind wants and may not allow the project to proceed.
Stovall, a strong supporter of developing coal-fired power plants in his Eastern Montana district, said he worries that the order could set a precedent for NorthWestern having to buy more power from several other wind power projects. He said the price is unrealistic because wind power needs a source of more reliable power to firm it up during times when the wind isn’t blowing sufficiently.
Brainard expressed concern that there’s no limit on how many independent power producers could file for contracts with NorthWestern.
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