HELENA – A divided state Public Service Commission this week rejected NorthWestern Energy’s agreement to buy power from a new wind project, at a cost lower than the utility is paying for power from hydroelectric dams purchased earlier this year.
The PSC voted 3-2 on Tuesday to reject an agreement between NorthWestern and Greenfield Wind, which is proposing a 25-megawatt wind-power project near Fairfield.
Under the agreement, Greenfield would have a 25-year contract sell power to NorthWestern for about $54 per megawatt hour (mWh).
Earlier this year, the PSC approved NorthWestern’s proposal to pay $870 million to buy 11 hydroelectric dams and use that power to supply its Montana customers. The cost of that power to ratepayers is $57 to $58 per mWh, commissioner said at Tuesday’s meeting.
John Pimentel, the president of Foundation Wind Power and a partner in the Greenfield project, said it plans to ask the PSC to reconsider its action.
“It was a proposed joint settlement and negotiated contract … that would benefit ratepayers and reduce carbon,” he said Thursday. “We’re hopeful that the commission will continue their analysis and review what is a pretty straightforward proposal.”
Commission Chairman Bill Gallagher, R-Helena, led the argument against the Greenfield contract, saying there would be many times during the 25-year contract that NorthWestern wouldn’t need the power it had to buy from Greenfield.
NorthWestern then would have to sell that excess power into the market, sometimes at a loss, and “the difference in that price is going to be left to the consumer,” he said.
PSC staff, however, said having Greenfield’s power in NorthWestern’s “portfolio” of electricity supply would save consumers on an aggregate, annual basis.
Commissioners Roger Koopman, R-Bozeman, and Kirk Bushman, R-Billings, joined Gallagher in rejecting the contract.
They, too, expressed concerns about whether accepting the contract would negatively affect consumers in the long term.
Commissioners Travis Kavulla, R-Great Falls, and Bob Lake, R-Hamilton, voted to approve the contract.
Kavulla said the price seems “to be in the zone of reasonableness,” and that if the settlement isn’t approved, the case will continue before the PSC and may be much more difficult to resolve.
Lake said Greenfield already had absorbed a lot of legal costs in trying to reach a contract, and wondered whether it could survive if forced to continue to case much longer.
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