Co-op may have power offers for Great Falls soon

Within the next month, Great Falls may see some new offers for electricity to power city operations, courtesy of the newly formed electric cooperative that the city joined last year.

A top co-op official said Wednesday a consultant is evaluating the bids from several power generators, and that the co-op may have offers ready for the city’s new municipal utility as soon as mid-February.

By MIKE DENNISON
Tribune Capitol Bureau

http://www.greatfallstribune.com/news/stories/20040129/localnews/312404.html

But Steve Balster, board president for Southern Montana Generation & Transmission Cooperative, said it’s also possible the bids may be too expensive or otherwise unacceptable.

"We have the right to reject all of them and go out for another one, if we don’t like the prices," he said.

The bids are to supply electricity to the city of Great Falls for the next four to five years, starting this year. The power would run city-owned plants and buildings.

Any new supplier would replace NorthWestern Energy, which is providing power to the city at the same rate it sells to its other 300,000 customers in western and central Montana.

City Manager John Lawton said the city wants to find out if an independent supplier would provide power at a more reliable and/or affordable price.

"It’s to test the market and see what’s out there," Lawton said. "Southern Montana will give us an offer … We would have to decide whether to take that."

Lawton said the city also would consult with other possible large consumers, such as the Great Falls School District, to see if they’d like to participate in the contract.

The city joined Southern Montana late last summer, as part of the city’s move to form a municipal utility. At the time, Lawton said the city wondered whether electricity supply from NorthWestern Energy might be unreliable and wanted to explore other options.

NorthWestern Energy is part of NorthWestern Corp., which is in bankruptcy court.

Southern Montana was formed last year by five rural electric cooperatives in central and southeastern Montana, primarily to seek power that member co-ops will need starting in 2008.

Southern Montana also may help finance a new coal-fired generating plant near Circle or Miles City, and Great Falls officials have talked about acquiring power from that plant. The plant, if it goes forward, wouldn’t be up and running until 2008.

Balster, who’s also general manager of Fergus Electric Cooperative in Lewistown, said while Southern Montana asked last month for bids to serve the city of Great Falls, it also sought bids to provide power to the rural co-op members beginning in 2008.

"We wanted to go out and test the market and use that as a comparison for our plans of possibly building a new plant," he said.

Ten companies submitted bids, which were due Jan. 16. Some bid on both the 2008 contract and the city of Great Falls contract, while others bid on one or the other, Balster said.

Co-op officials declined to release names of the companies submitting the bids.

One company that has not bid on the contracts is Commercial Energy of Montana, a Cut Bank-based energy marketer that supplies gas and electricity to many clients in Montana.

In fact, Commercial Energy President Ron Perry wrote a letter criticizing the bidding process, saying he couldn’t submit a bid because the co-op didn’t provide enough information on the city’s power consumption.

The request for bid "showed a lack of understanding of the (electricity demand) profile of a larger city," Perry said Wednesday. "This was not an attempt to get a real bid. This was simply an attempt to say there aren’t any viable alternatives besides (the coal plant)."

Perry also questioned why the city would consider bids now, since regional prices are relatively high and it won’t be known until later this year what NorthWestern Energy will be charging in the future for its power.

Lawton and Balster emphasized that neither the co-op nor the city is obligated to accept any of the bids right now.

Balster also said the co-op wanted bids only from owners of existing power plants, rather than marketers or partners in proposed power projects.

"We just feel more comfortable with someone who already owns their own generation," he said.