Wednesday, September 29, 2010

NWE and Smurfit Stone

Courtesy of Shelley Ridenour at the Daily Interlake, it is now public that NorthWestern Energy is aggressively pursuing the acquisition of the shuttered Smurfit-Stone Facility at Frenchtown.  NorthWestern Energy's perennial biomass promoter, John Fitzpatrick, made the announcement at the Montana Wood Products Association's annual meeting.   According to John Fitpatrick, the facility would require a $60 to $70 million investment and have a nameplate capacity of 40 MW. 

This is certainly exciting news.  But before jumping on the biomass bandwagon, it is important to take a hard look at the economics of such a propasal.  A couple observations:

  1. I am seriously sceptical that as Mr. Fitzpatrick claims that "“wind is no cheaper than biomass.”
  2. Will the plant meet MT's RPS standards?  The intent of the RPS was to encourage new construction, not the purchase of old plants.  
  3. What about the air permit?  Given the airshed designation in Missoula, it could be virtualy imposibile to get a new air permit for the facility, if one was required by applicable upgrades.
What do other folks think?  Is this a good bet for new generation for Montanans, or is NorthWestern Energy just looking at Avista's Kettle Falls facility with jealousy?  

MT PSC votes 4-1 to reveal salaries of Utility Executives

This has been an important issue for Commissioner Toole, and now the MT PSC has a formal policy in place to not protect salary information of executive officials.  Commissioner Molnar objected on constitutional grounds, citing strong protections of privacy. 


Mike Dennison has the full story in today's Gazette. 

Of course, Executive Salary information is already available for certain publicly traded utilities such as NorthWestern Energy.  Thanks again to Mike Dennison, see story here

Tuesday, September 28, 2010

Friday is the last day to comment on NWE's 2009 Procurment Plan

Back in June, NorthWestern Energy released their 2009 Resource Procurement Plan which sets out their prefered energy supply portfolio. These plans are supposed to come about every 2 years, and this was the first one since NorthWestern Energy regained the ability to own generation assets in 2007 from the Montana Legislature (i believe). 

Basically the plan is a methodical analysis of where the utility plans to get energy from over the next 20 years. Will they rely on market based purchases?  Aquire wind or coal plants?  Or build natural gas? 

The PSC, as part of the docket, is receiving public comments on the plan.  Comments must be e-filed here, by Friday October 1st.  This is your chance to tell NorthWestern Energy and the MT PSC which direction NorthWestern Energy should go. 

If i have time, i may add some general thoughts about the plan and what I think it means for Montanans.  But, i found the following chart fascinating.  It shows, all else constant, the adding new wind is the cheapest "Base Cost" portfolio (Portfolios PF11, 52 & 53). 


Thanks to Electric City Weblog for noticing our work

Travis Kavula's link back here provided some appreciated early attention. 

Thanks, and I hope you will continue to follow. 

The Hearing Aftermath of NorthWestern Energy's Rate Case

NorthWestern Energy has made the first post hearing filing in the voluminous PSC docket dedicated to determining future natural gas and electrical delivery rates in Montana.  The filing is a late filed exhibit which provide the sample calculations for how NorthWestern Energy's revenue would be calculated with decoupling.

I did not have a chance to watch the proceedings in detail, but i got the sense that the PSC was anxious over implementing decoupling during a period of slack consumer demand.

Anyway, here is there proposed calculation. 

Monday, September 27, 2010

Gaelectric's Huge Transmission Reservation

It was reported by both the Gazette News Service and North America Wind Power on Friday that Montana focused wind-developer Gaelectric has raised $18 million from European Debt Partners to support transmission requests for moving it's wind power out of Montana.   

The money is reported flow to the Bonneville Power Administration, and NorthWestern Energy.  I would suspect that these deposits are associated with continuing the work, and Open Season Process, that Gaelectric kicked off with earlier requests in March of 2010 with BPA. Those requests amounted to a $3.5 million deposit with BPA to participate in their 2010 Open Season Process. 


 

Election Results from Beartooth Electric Cooperatives Annual Meeting

By wide margins, two anti-incumbent candidates have been elected to the board.  These candidates, which organized a series of forums around the Stillwater & Carbon County, have pledged to operate Beartooth in open and transparent manner. Thought the board is still solidly in support of SMG&T, these two candidates could create some real inertia in changing MECA and SMG&T policies. 

Linda Halstead-Acharya @ the Billings Gazette has the full story:

SMG&T's FERC complaint on Transmission Costs

Details below, but SMG&T and NorthWestern Energy are now embroiled with FERC over whether SMG&T understood how to reserve transmission.  If SMG&T misread their contract, and failed to understand what they committed to in 2005 during a rush to secure markets for excess energy from Highwood, it could mean a $53 million dollar liability for the facility.  

Background

In late August, Southern Montana Electric Generation & Transmission Cooperative, filed a complaint against NorthWestern Energy alleging violation of their open access transmission policies and relevant FERC Orders.  The complaint revolved around particular reservation for transmission capacity, a 65 MW request, which was placed in 2005 and went live this spring. That capacity, as SMG&T details, was necessary for the sale of excess generation from their now defunct coal version of the Highwood Generation Station. 

According to SMG&T's filing, the request carries an economic value of approximately $53 million.  NorthWestern Energy recently posted their response, and PPL has requested intervenor access in the docket.  The entire affair is docketed at EL10-82 on the FERC website. 

Watch this blog for more updates.