April 19, 2008
Montana

NWE won’t buy power from wind farm expansion

NorthWestern Energy has declined an offer to buy additional power from the Judith Gap wind farm, whose operators have proposed expanding the 135-megawatt project.

“We don’t think it’s in the best interests of our electricity supply portfolio to acquire that (expanded) project at this point in time,” said John Hines, director of supply for NorthWestern.

NorthWestern sent a letter this week to the project owner, Invenergy, declining its offer, Hines said.

The company wouldn’t release a copy of the letter, citing a confidentiality agreement with Invenergy, which is headquartered in Chicago.

Invenergy officials did not return calls seeking comment about plans for the Judith Gap expansion.

Invenergy has proposed adding 35 turbines to the wind farm north of Harlowton, increasing its power-production capacity nearly 40 percent.

NorthWestern has been buying the power produced by the project since it opened in 2006. Judith Gap is the only major wind farm in Montana.

Under terms of the purchase agreement, Invenergy has to give NorthWestern first crack at buying any power produced by an expansion of the project, company officials have said.

If NorthWestern declines, Invenergy is free to market the power elsewhere.

NorthWestern has 320,000 customers in Montana, and obtains most of its wholesale electricity on the open market or through long-term contracts with energy producers, such as Invenergy. That power is then sold to NorthWestern’s residential and business customers across Montana.

At 135 megawatts, Judith Gap is the only major wind-power project in Montana. The second-largest project is MDU Resources’ 19.5-megawatt wind farm near Baker, close to the North Dakota border.

One megawatt of wind power provides enough electricity for 240 to 300 homes.

NorthWestern is paying about $30 per megawatt hour (mwh) for electricity purchased from the Judith Gap wind farm, which began operating in 2006. Other costs associated with the power should put the cost at about $41 per mwh this year, NorthWestern officials have said.

That cost is less than the approximate $56 per mwh NorthWestern is charging customers now for its “portfolio” power, which is electricity from a variety of sources, purchased on the market.

By Mike Dennison
IR State Bureau