Montana PSC criticizes NorthWestern Energy’s energy plan and lack of renewable energy

This article has been corrected from its original version.

(MTFP) HELENA – The Montana Civil Service Commission released formal comments on June 30 on a long-term electricity supply plan developed by NorthWestern Energy, endorsing the company’s efforts to further secure the capacity of production amid a wave of regional coal-fired plant closures.

The regulator, however, criticized the analytical model used by NorthWestern to justify its proposed strategy for the coming years, saying the company had not placed much emphasis on renewable energy sources and had not provided in-depth study of key options such as purchasing power from other public services. The agency has asked the company to address its concerns when it comes before public service commissioners with specific proposals.

“The Commission acknowledges NorthWestern’s conclusion in Plan 2019 that, in the absence of the development of new resources, the regional power system in the Pacific Northwest is likely to be inadequate over the next several years due to decommissioning significant coal-fired power generation capacity, “wrote the PSC. It is reasonable, the agency added, for the company to respond to ensure it can provide reliable service to customers.

However, the PSC has identified a number of suspected flaws in the 300 pages-plus-appendices NorthWestern Proposed, which concluded that the company’s best option is probably building new natural gas plants. For example, the PSC says the plan does not do enough to analyze whether the cheapest option for consumers is the company’s current strategy of relying on regional energy markets when demand for energy is available. he electricity exceeds what the company can provide from its dams and power plants.

The Montana Consumers Council, which advocates for taxpayers before the PSC, has flagged this as a flaw in the utility plan.

“Over the past decade, NorthWestern has relied on wholesale market purchases to meet much of its capacity needs, and continues to do so as NorthWestern’s generation portfolio is several hundred megawatts of power. peak load, ”MCC said in comments summarized by the CFP. “The 2019 Plan does not demonstrate that these regional markets should be abandoned in favor of the construction or acquisition of new generation assets. “

The PSC agreed, calling it a “critical deficiency” that NorthWestern’s plan failed to analyze a full range of power options purchased on the market.

As the Pacific Northwest’s power grid shifts away from constant-combustion coal-fired power plants to intermittent wind and solar generation, NorthWestern argued that leveraging energy markets is an increasing proposition. more risky. The company pointed out special cases in which regional electricity prices rose when periods of high consumer demand intersected with periods of low electricity production.

The PSC also criticizes NorthWestern’s plan for being insufficiently transparent in its analytical modeling, for underestimating renewable energy technologies and for ignoring the cost of new pipelines in the price estimates for new plants. A research group commissioned by the PSC to examine the modeling work of NorthWestern, Synapse Energy Economics, concluded in a February report that the assumptions built into the company’s analysis made its results in favor of natural gas plants “essentially a fate.”

Further, the Panel notes that MCC and other commentators have complained that NorthWestern’s plan failed to analyze the implications of strengthening its production portfolio by purchasing an expanded stake in Colstrip – a possibility that sparked substantial public debate during the 2019 Montana Legislature. Last December, the day after the PSC’s first procurement plan hearing, NorthWestern plans announced to acquire an additional stake in Colstrip Unit 4 from Washington-based Puget Sound Energy.

“Failure to model an increase in Colstrip ownership – nor take into account the clean-up and remediation costs associated with the plant, is a significant flaw in the 2019 plan,” MCC said in comments. summarized by the PSC.

The PSC-commissioned Synapse report also highlighted the lack of Colstrip modeling as a flaw in the NorthWestern plan, but the agency did not explicitly say whether it agreed.

A request for the PSC to approve the additional purchase of Colstrip by NorthWestern is pending, as is a solicitation that the company issued in January ask third parties for flexible power generation proposals that may or may not lead to the development of new gas power plants.

“NorthWestern Energy appreciates the Montana Civil Service Commission’s in-depth review of the 2019 Electricity Supply Plan,” said NorthWestern spokesperson Jo De Black. “We are reviewing the comments and will take the comments into consideration when reviewing the plan.”

the energy supply plan, originally filed with the PSC last August, is a legally mandated planning document designed to guide discussions on specific regulatory decisions like NorthWestern’s Colstrip application. As the plan was submitted for public comment last year, it triggered harsh reviews climate activists and sustainable energy advocates who argued the utility was not aggressive enough to shift its wallet to renewable energy sources.

The PSC said it received around 784 public comments in response to the plan, including 634 supporting increased use of renewable energy.

After a few minutes of discussion on a conference call Tuesday, Montana’s five elected public service commissioners voted to endorse 31 pages of formal commentary largely as drafted by the agency’s professional staff. .

“I commend the staff for the comprehensiveness of the report,” said Commissioner Tony O’Donnell, R-Billings.