Sparking the Gap: Who will provide the power to back wind power? 

Who will spark the gap?

With the standby power necessary to smooth the erratic output of Montana’s premier wind power facility becoming difficult to come by at any price, the state’s energy technocracy wonders.

The Judith Gap wind farm is an impressive operation. According to the company that runs it, Invenergy, its 90 turbines stretch 400 feet into the Big Sky when the blades are fully extended, and each one produces enough electricity to power 300 homes. It’s a showcase project in Montana’s move toward renewable energy.

Yet the cluster of dynamos itself faces a looming power shortage.

To integrate the Gap’s green electrons into the area’s power delivery system, a back-up source of power is required. When the wind isn’t blowing, the power that is scheduled to come from the farm has to come from somewhere else.

Currently, the company that buys the Gap power and resells it to Montana ratepayers, NorthWestern Energy, is able to find that reserve power, but that situation may be about to change. The market for standby electricity has become “illiquid,” NWE analyst Dave Fine told the Montana Public Service Commission early in February.

All forms of large-scale power generation need other sources of power to help them stay in sync with the demand for electricity or the “load” as the pros call it. Those sources are sometimes called “regulating reserve.” NWE had some trouble matching the wind to the load during Judith Gap’s first year of operation, an activity that Mr. Fine described as “chasing the wind.”

From moment to moment, government regulations require that supply stays within 90 percent of demand, or the utility is considered to be out of compliance. If the company stays out of compliance for too long, fines result.

Before Judith Gap, NWE had never been out of compliance. In 2006 the company violated the standard repeatedly, NWE officials told the PSC. In order to stabilize its lines, the company added another 25 megawatts of reserve power to the 30 megawatts that it traditionally required, PSC Vice Chairman Doug Mood said. The cost of reserve power is passed on to ratepayers.

NWE has the situation under control for now, but at the end of the year one of the primary contracts for that back-up juice will end, and so far NorthWestern hasn’t found a new outlet to plug into, company and PSC officials have said.

Public Service Commissioner Brad Molnar, R-Laurel, has noted that with other wind projects in the region coming online, firming power might become impossible to obtain. If that leads to crippling fines for line instability, the Judith Gap facility might have to shut down, he said.

Mr. Molnar’s prediction was quickly rebutted by Doug Carter, vice president for business development for Invenergy. “We don’t see the project failing and neither do our investors, or they wouldn’t have let us build it,” Mr. Carter said. He said the chance of failure was “highly unlikely.”

Gov. Brian Schweitzer added that energy costs from the wind project are competitive with new coal plants.

“Here are the numbers,” the governor said. After one year of operation the Judith Gap project was producing power at $41.63 per megawatt. The wind portion of that was $32 per Mw. That was put together with natural gas from Butte to get $41.63. The new coal plant in Hardin came in at $44 per Mw, and the proposed Great Falls plant will produce power at $48, the governor said.

“Those are the facts,” he said. “That’s NorthWestern Energy’s numbers. It may be that some people don’t have all the facts.”

The governor was comparing apples and oranges, Mr. Molnar said. The power generated at Judith Gap could not be matched to the load. It was not “dispatchable, curtailable or reliable,” meaning that the wind power couldn’t be used to back up other sources of power and can’t easily be reduced to match demand.

The governor’s remarks were “just the usual blather,” he said.

Forty percent of the power produced at Judith Gap has been sold into the Idaho system at a loss, because there was no market for it here, Mr. Molnar said. “Why would you pay $42 for a waste product when you can buy usable product for $46?”

The commissioner warned that NorthWestern would face fines for line imbalance. Between January and June the company was below compliance for line reliability, he said. He noted that the federal government would assume jurisdiction over the lines in June, and that it could levy fines of $1 million and more.

“Commissioner Molnar is correct to a point,” NWE Communications Director Claudia Rapkoch said, but the issues faced by her company were faced by a lot of utilities. Commercial wind power was variable by its very nature, she said.

What made NorthWestern Energy’s situation unique was that it didn’t own its own sources of generation, yet it was responsible for the reliability of the transmission lines in its service area on a minute-by-minute basis. That meant that it had to have a reliable source for standby power.

“We do have a contract with a power plant in Butte, and that helps a little, but we really need load-following capacity,” she said. Load-following power plants produce most of their electricity during the day when cost and demand are highest.

They shut down or reduce their output at night when demand and price drop, according to Wikipedia.

NWE currently contracts with Idaho Power for load-following services, Ms. Rapkoch said. But it is uncertain if that power will be available for long.

“The probable future is that firming and ancillary services are becoming harder and harder to come by,” Ms. Rapkoch said, and she reiterated that NWE didn’t own its own generation resources.

As back-up power resources get scarcer and more expensive, the company has had to look at building its own, she said. She noted that that was why House Bill 25, pending before the Montana Legislature this session, was so important to the company. The bill, which has passed the House and been transmitted to the Senate, would allow NWE to build its own plants, and the first use of such a facility might be to provide the utility with firming power, she said.

Will Rosquist, a rate analyst for the PSC, concurred that NWE would have to provide its own ancillary power if the third party market dried up. Failure to do so was not an option.

“They are a control area operator,” he said. “They have the responsibility to maintain the voltage on the line.”

Both NorthWestern Energy and Invenergy had testified before the PSC on the status of the wind farm, Mr. Carter said, and both testified that it benefited the grid and the community. The commissioner’s concern seemed to be that the predicted numbers and the resulting numbers weren’t exactly the same.

Mr. Carter noted that the power that NWE contracted for with Judith Gap was less expensive than the energy reserved in the company’s PPL contract, and it was still less expensive than power that was currently available on the market.

Addressing the problem of integrating wind power into the grid, the Invenergy executive said that NorthWestern had signed a memorandum of understanding with power providers PacificCorp and Idaho Power that would allow each utility to help compensate for the other’s power imbalances.

While hopeful, Mr. Rosquist felt that it was too early to tell if the alliance would have a significant impact on NWE’s integration problems.

Mr. Carter thought that the real potential of Montana wind power lay in its export. He said that direct transmission of power from Judith Gap into the mid-Columbia Basin would be ideal.

“I really think that’s the long range play for Montana.” It matches what happened to Colstrip, he said. The basin contained lots of dams and hydro and power lines. “Wind and dams work well together. Ideally a line would be built directly to them without messing with the Montana grid.”

Mr. Molnar also saw export as a possible solution to wind’s problems.

He said that so much wind power capacity was being built in the Northwest that the region’s ancillary services would be used up within a year. At that point Montana would have two choices. Montana could build its own gas plant and provide its own ancillary services “at a horribly ugly cost,” or the wind-generated electricity could be sold to the Canadians and Californians. He preferred the latter option.

“We should take this contract off the backs of the people of Montana,” he said.

It was the people’s Legislature, however, that mandated that NorthWestern Energy turn to green power. In April 2005 the governor signed Senate Bill 415 into law. It required that at least 5 percent of the electricity purchased by public utilities be from renewable sources by 2008. By 2015 the law requires that 15 percent of the power purchased be renewable, a U.S. Department of Energy website said. Currently Judith Gap provides Montana’s default supplier with 8 percent of its power, and at the moment wind seems to be the only renewable that has a chance of meeting the law’s requirement.

Bound by legislative mandate, squeezed by the market, bereft of its own generation facility and tasked with maintaining the integrity of its portion of the grid, NorthWestern energy turns into the wind and finds the going rough.

By Jim Larson

billingsnews.com

5 April 2007