NorthWestern wants to build or buy power plant

NorthWestern Energy Resource Plan advances utility-owned generation, adds 50-75 MW of wind, pursues 200-300 MW gas-fired capacity, expands conservation, reduces market volatility, and phases down reliance on PPL Montana via procurement overseen by PSC.

NorthWestern Energy says its best option for supplying power to its customers over the next 20 years is to buy or build another natural gas-fired power plant so it can rely less on contracts with PPL Montana.

NorthWestern filed its biennial electric supply plan with the state Public Service Commission. The plan continues the company's efforts to rebuild itself as a utility that owns power generation, with initiatives such as an energy storage system to enhance reliability, rather than a company that distributes electricity purchased from others at market prices.

NorthWestern's plan also calls for adding 50 to 75 megawatts of wind power and increasing its customer conservation programs.

"We've been trying for the last few years to diversify the fuel mix so we're not dependent on any one resource or provider of electricity," said company spokeswoman Claudia Rapkoch.

The PSC will hear testimony on the plan this fall as a line upgrade for renewables is evaluated and then offer its recommendations.

Commissioner Ken Toole, D-Helena, said having NorthWestern buy or develop more of its own electricity generation facilities will protect consumers from a potentially volatile electricity market, but it will cost ratepayers more initially.

"I think we're better off with NorthWestern owning plants than being out in the market and going to PPL all the time," he said. "The bad news is its going to cost a lot of money."

PPL Montana has a contract to provide about one-third of the power needed by NorthWestern Energy through mid-2014. Its price is close to market rates.

NorthWestern's energy resource plan calls for buying or building gas-fired plants that can produce 200 to 300 megawatts of power to replace its contract with PPL Montana. The company also plans to start looking for smaller blocks of power on the open market in 2012, as seen with WAPA buying wind from Basin in the region, to help fill gaps in the portfolio over the next five years.

Rapkoch said those purchases could come from PPL Montana, if the price is right.

PPL Montana spokesman David Hoffman said the company sells "reliable power at a reliable price," and if NorthWestern wants to take advantage of that for customers "that's great." If not, he said the company will sell its power elsewhere, preferably in Montana.

"We continue to sell into the large industrial market in Montana and to a number of rural electric co-ops," Hoffman said.

NorthWestern also has long-term contracts to buy power from independently owned plants including the Judith Gap wind farm, the Basin Creek gas-fired plant near Butte along with 222 megawatts of coal-fired power from the Colstrip 4 plant, even as declining returns in coal power have pressured similar assets.

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