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PSC sets terms for wind project; developer says they’re unworkable

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Wind-power turbines in central Montana Wind-power turbines in central Montana
HELENA -

State regulators this week set the terms for a proposed wind-power project near Martinsdale, in central Montana – but the developer said Wednesday those terms make the project “uneconomic” and unable to go forward.

“These terms would make it extremely difficult, if not impossible, for any new (small, independent renewable) projects to be constructed in the state of Montana,” TransAlta Corp. spokeswoman Tracey Hatcher told MTN News.

The state Public Service Commission voted Tuesday to set a price of $23.30 per megawatt hour for power produced by New Colony Wind’s proposed 23-megawatt wind farm.

That price, which is what New Colony Wind would receive for wholesale power sold to the state’s dominant utility NorthWestern Energy, is nearly 50 percent lower than the price sought by the developer.

The five-member PSC also said New Colony could have a 15-year contract, instead of the 25-year contract sought by the company.

Hatcher said while the project would “lead to significant economic benefits” for the Harlowton-Martinsdale area, TransAlta won’t proceed with the project under those terms.

PSC spokesman Chris Puyear told MTN News Wednesday that the commission's job is to ensure that the rate for independent, renewable power is no greater than what NorthWestern would pay to obtain the power elsewhere on the market.

"If developers are unable to build a project at the rates and contract terms established by the PSC ... it's a clear signal that the project isn't able to compete with other alternative forms of power," he said. "It is not the role of the commission to guarantee the success of someone else's business on the backs of a captive set of customers, who have no choice in where they receive a service."

TransAlta, based in Calgary, Alberta, is a major power producer in Canada and says it is “actively expanding its renewable generation fleet,” looking to invest in areas “that are supportive of the economic development opportunities that renewable projects provide.”

The PSC set the rates for the proposed project because it’s a small, non-utility-owned renewable power project subject to a federal law attempting to encourage such projects.

Under the law, if the area utility buying the power and the developer can’t agree to contract terms, the PSC must set a price and terms that the PSC determines are reflective of the current wholesale electricity market, and NorthWestern Energy's costs.

NorthWestern Energy had objected to New Colony’s requested price of $43.63 per megawatt hour – which is what NorthWestern would pay to buy power as part of its “portfolio” of electricity sold to retail customers in Montana.

It had asked the PSC to set the much lower price of $13.96 per megawatt hour.

About Mike Dennison

MTN Chief Political Reporter Mike Dennison joined MTN News in August 2015 after a 23-year career as a newspaper reporter covering Montana politics and state government. While some may believe that politics are boring, Mike firmly believes that's not the case if you tell the story with pizzazz and let people know why the story is important.
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