HELENA – The Montana Public Service Commission on Tuesday established contract terms and conditions between Greycliff Wind Prime LLC. and NorthWestern Energy, for a 25-megawatt wind farm in southcentral Montana.
The two primary points of dispute resolved by the PSC are that the project will move forward with a contract length of up to 25 years at $45.49 per megawatt-hour for the full length of the contract. And NorthWestern has the right to curtail purchase of Greycliff’s power during light load hours only for safety purposes.
Greycliff wanted to be compensated $53.39 per megawatt-hour of electricity produced, NorthWestern Energy proposed $35.65 per megawatt-hour. The discrepancy required mediation by the Montana PSC.
NorthWestern had requested curtailment rights for economical reasons in addition to safety, but that request was denied, PSC officials said.
In July 2015, Greycliff Wind Prime LLC and NorthWestern Energy were negotiating to establish contract terms for the project among themselves, but were unable to reach an agreement, eventually requiring PSC mediation, PSC officials said.
The Greycliff Wind Farm will move forward as a qualifying facility under the federal Public Utilities Regulatory Policies Act, a law that requires utilities like Northwestern Energy to buy power from independent renewable generators less than 80-megawatts in size, at the utility’s “avoided cost.” Avoided cost is the cost the utility would have incurred had it supplied the same amount of power itself, or obtained it from another source.
Central to the dispute between NorthWestern Energy and Greycliff Wind Prime LLC was the price that NorthWestern’s customers would pay for the electricity produced by the wind farm. The PSC approved its rate based upon calculation of the utility’s avoided cost.
The vote was 4-1 with Commissioner Kirk Bushman, R-Billings, dissenting.
“Today’s decision is extremely disappointing and will be harmful to ratepayers for years to come,” he said in an email. “The terms and conditions put forth in this agreement between the utility and the wind developer is a result of the commission ignoring its obligation to maintain avoided cost, set length of contracts, and in addition, allows the cost of carbon to be put into rates.”
Commissioner Roger Koopman, R-Bozeman, said the commission is faced with trying to make sense out of federal policies that make no sense.
“The best the commission can do with unworkable law is try to strike a fair balance with the best information we currently have available, thereby providing as much consistency and predictability as possible to the renewable energy marketplace,” he said.
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