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NW Energy’s proposed gas-fired plant facing scrutiny

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Posted at 5:01 PM, Jul 08, 2021
and last updated 2021-07-08 19:11:07-04

HELENA — Editor’s note: This is the first of a two-part series on NorthWestern Energy’s request for pre-approval of 225 megawatts of new electricity resources – including construction of a 175-megawatt natural gas-fired plant in Laurel.

NorthWestern Energy’s proposal to build a 175-megawatt power plant fired by natural gas, to help serve its Montana customers, is facing plenty of scrutiny over whether it’s the best choice for consumers and the environment.

Several of Montana’s major cities, the Montana Consumer Counsel and environmental groups are among those asking how NorthWestern determined the plant should be part of the utility’s plan for new power for its customers.

“What were the assumptions that NorthWestern was using to come to this requirement in the first place?” says Monica Tranel, an attorney representing 350 Montana, a group advocating for more renewable power. “They’re saying we need so much (generating) capacity. Well, what were they actually looking at?”

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Monica Tranel, attorney for 350 Montana.

The cities of Bozeman, Missoula and Helena also are weighing in, asking why NorthWestern is proposing a fossil-fuel plant that will operate for at least 30 years, when cheaper, cleaner alternatives are likely available.

“Technology is advancing at such a rate that we’re convinced that renewables will be the preferred option under any scenario, within a decade,” says Bozeman Deputy Mayor Terry Cunningham. “And certainly, within three decades, it will clean the clock of natural gas or any other fossil fuel-burning resource.”

NorthWestern will be defending it choice before the state Public Service Commission, which must decide whether to grant “pre-approval” to building the gas-fired plant in Laurel by January 2024 and a separate 50-megawatt battery-storage project near Billings by late 2023.

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Bozeman Deputy Mayor Terry Cunningham.

Pre-approval would allow NorthWestern to place the projects into rates, charging customers for the cost for years to come. A final decision probably won’t come until next year, after a lengthy process of testimony and hearings.

John Hines, NorthWestern’s vice president for supply, says the net increased cost to customers for the company’s entire plan is near zero – a plan that also includes a contract to buy 100 megawatts of power from PowerEx, a Canadian firm, over five years.

He also says even with the gas-fired plant, NorthWestern still has an energy mix that is nearly two-thirds renewable, or higher than most electric utilities in the nation.

“We’re proud of that; it’s a very significant change from where we were 10 years ago and certainly where the rest of the country is right now,” he told MTN News.

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John Hines, vice president of electric supply for NorthWestern Energy.

He also says the three-part proposal – gas plant, battery storage and power contract -- was chosen by a consultant, which evaluated a range of bids submitted to NorthWestern to meet its power demands.

“It wasn’t NorthWestern’s decision to select the gas plant,” Hines says. “This was done by an independent third party, and they looked at the costs, the resources that best meet our resource-portfolio needs. …

“We ran different portfolios to see how it affected cost for customers, and the natural-gas resource was in the top 10 portfolio (options). To me that’s pretty solid evidence that it is the lowest-cost resource.”

Skeptics of the plan say while a consultant may have chosen the gas plant as a good option, NorthWestern still had to choose the parameters for the consultant, rank the bids and decide what to submit.

The Montana Consumer Counsel, which represents consumers in cases before the PSC, says “critical information” comparing the bids has been redacted from or was not included in NorthWestern’s filings with the PSC.

Comparison of other resources is “largely absent” from NorthWestern’s original application to the PSC, the Consumer Counsel said.

Tranel, the attorney for 350 Montana, also said NorthWestern apparently made no attempt to consider how to reduce power consumption, or capture production from small consumer-based projects, like roof-top solar, or consider the impacts of the gas plant on climate change.

“Looking at climate, its impact and how we should be preparing for that are key components to their resource planning and resource advocacy,” she said. “I don’t see that NorthWestern has done that at all, in its modeling and assumptions.”

Hines says more information on the other bids will be made available to official parties to the case, once privacy protections are in place – although the public apparently doesn’t get to see those data.

But what the company needs, to serve growing electricity demands of customers, is more power capacity, he says – which is a resource like the gas plant, which can be powered up whenever necessary.

The need and demand will only grow in the future, Hines says, as utilities around the region retire coal-fired plants.

“(Electricity) is a source that’s been taken for granted for a lot of years, because we’ve had a surplus of generation in the West,” he says. “But with the retirement of a lot of thermal generation and the growth in just the number of people – I would call it a critical problem that has to be addressed.”

Next week: Three Montana cities are trying to go carbon-free, on electricity, in the next decade. They say NorthWestern’s proposed gas-fired plant isn’t helping.