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NW Energy withdrawing request for pre-approval of gas-fired plant

But company says it will do project anyway
NorthWestern Energy withdraws application to approve gas-fired plant
Posted at 10:44 AM, Sep 21, 2021
and last updated 2021-09-21 22:49:43-04

HELENA — NorthWestern Energy, the state’s largest electric utility, on Tuesday withdrew its request for regulatory pre-approval of a proposed 175-megawatt, natural gas-fired power plant near Laurel – but said it plans to build the plant anyway.

The surprise announcement, coming just days before opponents of the plant and other parties planned to file testimony on the proposal, said the company doesn’t want to wait for approval and will “accelerate construction” of the plant.

The plant should be completed before the 2023 heating season, NorthWestern said in a news release late Tuesday afternoon.

Earlier in the day, the company formally asked the state Public Service Commission to suspend the case in which NorthWestern had asked to place the plant’s cost into its Montana customers’ rates, under a process known as “pre-approval.”

The company said in its filing with the PSC that “uncertainties” in the construction market and “challenges to the supply chain” caused by the Covid-19 pandemic pushed it to make quicker decisions on the plant.

“(We) need to make commercial decisions outside the timelines of the approval docket to ensure that we maintain the most favorable supply and labor prices for this project,” the company said.

Under the pre-approval case, the PSC likely wouldn’t decide the issue until later next year.

The proposed natural-gas plant also had run into a buzzsaw of criticism from many quarters, including environmentalists, some of Montana’s major cities and others, who said it was too costly and too dirty, when cheaper, cleaner alternatives should be available.

Other parties in the case, known as “intervenors,” had been preparing to submit testimony to the PSC by Oct. 1.

Anne Hedges of the Montana Environmental Information Center, a leading critic of the plant, said NorthWestern should consider other options to provide long-term power for its 388,000 Montana customers.

But if the company goes ahead with the natural gas-fired plant, it’s better not to have it pre-approved, she told MTN News.

“It is far more appropriate for NorthWestern to have its shareholders assume the risk of building a facility like this,” Hedges said. “This is what utilities generally do – they let their shareholders bear the risk and then they come forward with a proposal after it’s been built, after they know what the costs are, and they can pass on more realistic costs to customers, after a commission approval.”

In the company’s news release Tuesday, NorthWestern CEO Bob Rowe said energy prices in the region are trending higher and costs for supplies and construction rose in the wake of the Covid-19 pandemic.

The company can’t afford to wait for pre-approval of the plant and proceeding now will save money on plant costs, he said.

The company submitted the proposal to the PSC this spring, asking the commission to grant pre-approval for the project and the company’s plans acquire a 50-megawatt battery-storage project near Billings.

It said the projects are needed to help supply NorthWestern’s Montana electric customers in future years.

John Hines, NorthWestern’s vice president for supply, has defended the natural-gas plant as a necessary, reliable long-term power source for customers – and noted that NorthWestern has an energy mix that is nearly two-thirds renewable, or higher than most electric utilities in the nation.

Critics of the plant included three Montana cities -- Missoula, Bozeman and Helena – that thought NorthWestern would be helping their citizens go to 100 percent net renewable electricity by the end of this decade.

“A plan that locks Montana consumers into a rate structure that involves burning of fossil fuels for 30 years is contrary to our goals,” Bozeman Deputy Mayor Terry Cunningham told MTN News this summer. “We don’t believe you can get from here to there, using the resource mix that they are proposing.”