PSC OKs New NorthWestern Energy Gas Plant

By Beacon Staff

HELENA – The Montana Public Service Commission on Tuesday gave final approval for NorthWestern Energy’s plan to build a new natural gas-fired power plant near Anaconda.

The new plant is part of a plan to give the state’s largest utility the capacity to generate some of its own power.

The commission balked briefly at the complexity of monitoring the $200 million construction project, before agreeing to hire an outside consultant to help with the work. The plan was approved on a 4-1 vote, with only Republican Brad Molnar opposing the idea.

NorthWestern will be required to give the commission periodic updates on the progress and cost of the plant.

Supporters said the plant gives NorthWestern and its customers ownership over some power generation, and will facilitate the purchase of more intermittent wind power.

The 200-megawatt, $206 million natural gas-fired power plant would be located on 60 acres of NorthWestern property next to the Mill Creek substation, south of Anaconda.

“This is our first new electric generating resource in Montana, and is a key step towards our vision of being a fully integrated, regulated utility,” Bob Rowe, NorthWestern Energy’s president, said in a statement. “It will enable us to integrate additional wind and other resources on the system.”

Commissioners said the new plant will allow NWE to buy less regulating power on the open market from out-of-state generators. The panel had given preliminary approval of the idea earlier in the month before finalizing the order on Tuesday.

“This is one of the most important decisions made by the PSC in recent years,” said commission Chairman Greg Jergeson. “It will be a dependable source of regulating resources for many years to come, shielding Montana consumers from dysfunction in the electricity market.”

But Molnar argued the plant would cost too much, and would place too much generation in one location reliant on one form of fuel. He said smaller plants diversified among other fuels would be better.

He said the periodic reviews of the project won’t help contain any problems, because by then it will be too late to stop the project.

“You have to use foresight, not hindsight,” Molnar said.

The final order passed by the PSC today sets the plant’s return on equity at 10.25 percent, rather than the 10.75 percent requested by NWE. Rate recovery of $81 million of the plant’s estimated $200 million in costs was also approved, as was the generator’s carbon offset plan.

NorthWestern said it hopes to start construction in the fall and have the plant finished by the end of next year.

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