What does Judith Gap Actually Cost?

There seams to be some ambiguity about how much Judith Gap, which provide about 8% of NorthWestern Energy's annual needs, actually costs. 

Mike Dennison, in his profile today about the PSC races, pegs it at between "$40 to $50 per megawatt hour, including power that balances intermittent wind power".  Commissioner Toole says it is "$39.48 per MWH (this includes the cost of "regulating")", and Travis Kavulla thinks it costs "double the market price", which, at the least, is greater than $70 per MWh.  

That's a pretty big spread and a big deal for Montanan's, as a change in $5 per MWh represents $2.25 million in value.


Fortunatley, every month NorthWestern Energy is required to file a Monthly Supply Tracker which shows the cost they are paying for each resource for that month, and its projected forward expenses for a year.  Based on the lasted tracker, filed on 9/15/2010, NorthWestern Energy is projecting to pay $14,048,421 for an estimated 476,592 MWh from Judith Gap.  Or, $29.48 per MWh. 

Now, this price does not include the cost of integration or balancing.  However, under guideline determined in previous dockets, NorthWestern Energy has assigned 91.23% of  the cost of these services for all the wind plants on its system to Judith Gap (See NorthWestern Energy's response to MCC10, D2010.7.77)  These costs are projected to be $3,857,145.80 for effectively the same time period as above.  Which amounts to a cost of integration of  $8.10. 

Bottom line: Judith Gap $8.10 (integration) + $29.48 (energy) = $37.58 per MWh

Caveat to the above:  NorthWestern Energy, in their 2009 Resource Procurement Plan, describes the tracker as not being inclusive of "payments or reimbursements to Invenergy under terms of the long-term purchase power agreement. These items include property taxes and impact fees" (p.2 Chapter 3)  Given this statement, the tracker costs may need to be increased to cover property taxes from the facility (I would estimate around $1 million), and other soft costs.  Given the inclusion of these costs, I would suspect Commissioner Toole is right on the money.