Monday, December 06, 2021

Bill unfairly props up energy company

by Daily Inter Lake
| April 25, 2021 12:00 AM

In the end, not even the most fierce proponents of Montana coal could get behind the lopsided and controversial Senate Bill 379.

The now stalled measure would have greased the skids for NorthWestern Energy’s pursuit of coal-fired power plants in Colstrip — all at the ratepayers’ risk and probable expense. 

As reported by the Montana Free Press, the initial version of the bill, drafted by NorthWestern Energy and sponsored by Sen. Steve Fitzpatrick, R-Great Falls, would have allowed current and future owners of coal-fired power assets to fully recover costs for any undepreciated value and remediation expenses, from energy consumers. It would also allow the utility to recover market value for new ownership of a coal power asset, even if that asset was purchased for less than market value, and directed the Montana Public Service Commission to allow the continued operation of coal-fired power plants “until the commission issues an order finding that the closure of the units is in the public interest.”

In a nutshell, NorthWestern’s stake in Colstrip would trump the PSC’s mandate to oversee the utility, and consumers would be on the hook for due costs that could total hundreds of millions of dollars.

Not surprisingly, the PSC unanimously opposed the measure. Republican PSC Commissioner Tony O’Donnell was quoted as saying that he couldn’t recall a bill “more tilted exclusively to the benefit of a utility and to the detriment of ratepayers.”

A series of bill amendments sought to restore some of the PSC’s regulatory role, but even with those changes the House Energy Committee wisely tabled the measure last week on an 11-1 vote. 

“Montana was built on coal. Many of us want to keep it,” Kalispell Republican Rep. Derek Skees said while voting against the measure, as reported by the Daily Montanan.

“This bill does not save Colstrip,” he added.

It doesn’t. The coal-fired power industry has been in decline for more than a decade due to myriad factors, including competition from cheaper, cleaner sources.

And while many Montanans agree with Skees and want to see the state’s coal industry prosper (ahem, $1 billion state coal trust fund), unfairly propping up a utility’s business endeavors without traditional regulatory oversight is a dangerous precedent that should be avoided at all costs.

STILL, THE underlying debate about the need to shore up the grid with reliable power at a reasonable rate isn’t without merit. As Rep. Neil Duram, R-Eureka, pointed out, Montana’s population is quickly growing, and with it the demand for energy. Montana should be looking to ramp up and diversify its energy portfolio.

To that end, we were more than pleased to learn last week that NorthWestern plans to invest in a reciprocating internal combustion engine power plant in Laurel as part of an effort to increase its power capacity in the state.

The $250 million investment includes the 175-megawatt gas-fired power plant, along with a 50-megawatt battery storage project and a five-year agreement to buy 100 megawatts of hydropower.

According to the U.S. Energy Information Administration, RICE plants are becoming increasingly popular in areas with electricity generation from intermittent sources such as wind and solar. These plants can start and stop quickly, and can start up even when the grid has no power, the administration notes.

When the wind stops blowing, these power plants can easily and efficiently ramp up production to fill the void. They also run cleaner than traditional gas-powered plants.

NorthWestern Energy CEO Bob Rowe said the Laurel facility will help address immediate energy demands in the state, while also allowing the company to further realize its goal to reduce the company’s carbon footprint by 90% by 2045.

The project, expected to go on line by 2023, is a boon for Montana’s increasing energy needs that will be supplied by increasingly diverse resources in the years ahead.