Greenfield Wind

WINData LLC – Wind energy engineering since 1991

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Governor visits wind farm near Fairfield

Gov. Steve Bullock visited a wind farm near Fairfield on Thursday as part of a series of energy roundtables he’s conducting around the state.

Previously, Bullock conducted a solar energy roundtable in Bozeman at Simms Fishing Products and toured the building’s new solar panel array. He also toured a weatherization project at a home in Missoula and held a roundtable about energy efficiency efforts.

Bullock said he’ll use input from the roundtables to develop an energy plan he is expected to release late this month.

The state has an opportunity to expand the state’s energy portfolio, he said.

“We can help design what that energy future will look like,” Bullock said.

Bullock was scheduled to conduct another roundtable in Colstrip, home to a coal-fired power plant and a coal mine, on Tuesday.

The state’s future energy options will include coal but also wind, solar and hydro, Bullock said.

Recently, Pennsylvania-based Talen Energy, which owns a share of the Colstrip plant and operates the facility, said its role as operator is not economically viable and the plant’s five owners will need a new manager by May 2018.

“The wind is shifting under our feet when it comes to energy,” said Bullock, who conducted an energy roundtable on wind at the Montana Farmers Union in Great Falls following his visit to the wind farm near Fairfield.

The 13-turbine, 25-megawatt Greenfield project is located next to the six-turbine, 10-megawatt Fairfield Wind farm, which was completed in 2014.

Developer Martin Wilde of WINData LLC, said both wind farms are examples of smaller, community scale wind projects that involve local contractors and land owners.

“There’s great expertise in Montana for Montanans to build them,” he said.

Dick Anderson Construction of Great Falls is the general contractor. The power is being sold to NorthWestern Energy.

Allan Frankl of Dick Anderson Construction said 60 to 70 people will be working on the Greenfield project during the height of construction. Turbine components are expected to arrive later this month and be up by mid-September. The wind farm is expected to be producing power after Sept. 30.

Land owner Marvin Klinker said he’ll receive a percentage of revenue from the electricity produced at the wind farm.

Follow Karl Puckett on Twitter @GFTrib_KPuckett.

Wind energy engineering since 1991

Source: WINData LLC – Wind energy engineering since 1991

Choteau Acantha Article – Industrial wind farm has broken ground in county-pub 3-30-16- WINData LLC

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Choteau Acantha Article – Industrial wind farm has broken ground in county–pub 3-30-16–

Choteau, Montana March, 30, 2016

By Nancy Thornton, Choteau Acantha reporter

A second industrial wind farm has broken ground southeast of Choteau, even as a wind farm half the size located on the new project’s western boundary was sold to a New York-based renewable energy investment company.

Teton County Commissioner Jim Hodgskiss said a Greenfield Wind LLC official, Matt Wilson, notified him that contractors would break ground during the week of March 20 for a 15-turbine wind farm next to the six-turbine Fairfield Wind project that was completed in May 2014.

The Teton County commissioners last summer approved a 10-year tax abatement for the proposed $47 million Greenfield Wind project while denying an abatement for the $19 million Fairfield Wind project.

Subsequently, Fairfield Wind appealed the state Department of Revenue’s determination that Fairfield Wind had a $19,118,781 market value. The matter is now before the Montana Board of Tax Appeals with all “discovery” documents due by April 25 and the hearing set for July 19.

Fairfield Wind’s 2015 tax bill was $323,569.83, an amount, with some later adjustments, that was paid under protest.

The Fairfield Wind farm is located in the Choteau elementary and high school districts and the proposed Greenfield Wind farm is in the Power High School and the Greenfield Elementary School districts.

Revenue officials estimated that Greenfield Wind would generate an estimated annual tax bill in the neighborhood of $863,000 under the cost approach, although with the tax abatement set for 50 percent during the first five years, local governments would receive only half of that.

Wilson works for Foundation Windpower LLC that owns a majority-member equity interest in Greenfield Wind LLC. The minority member of Greenfield Wind is Fairfield resident Martin Wilde who developed both wind farm projects under his company, WINData LLC.

Wilson and Wilde did not respond to invitations for telephone interviews.WINData has filed two lawsuits against Foundation Windpower in Teton County District Court that Judge Robert Olson recently dismissed. However, WINData has appealed the two cases to the Montana Supreme Court.

In December 2015 Foundation Windpower sold its interest in the Fairfield Wind project (the legal entity at that point was called Fairfield Wind Master Tenant LLC) to Greenbacker Wind LLC, which is a business created by Greenbacker Renewable Energy Corp. and Greenbacker Renewable Energy Co. LLC of New York, New York.

Greenbacker, in a December press release, said it acquired the Fairfield Wind project for $6,615,000 in cash and the assumption of $12,412,000 in debt for a total of $19,027,000 on Dec. 8, 2015. It is a “publicly registered, non-traded limited liability company that expects to acquire a diversified portfolio of income-producing renewable energy power plants, energy efficient projects and other sustainable investments,” according to its website.

The wind farm has two 1.6-megawatt and four 1.7-megawatt turbines. The generated electricity is sold to NorthWestern Energy under a long-term power purchase agreement that has 18.5 years remaining on the contract.

Greenbacker, citing the project as a “fund portfolio” for its investors, forecasts a 10.7 percent initial yield on the investment, but cautioned in its literature that that yield is not a measure of the fund’s performance and it is not necessarily indicative of distributions that the fund may provide to investors.

Wilde has had disputes with Foundation Windpower since mid-2015 and in court documents said he filed a notice of dissociation with the Fairfield Wind entity over Foundation Windpower’s refusal to supply him with accounting information, among other things. He refused to sign off on Foundation Windpower’s proposed monetary value of WINData’s 10- percent equity interest in Fairfield Wind and he declined to agree to the sale.

However, Foundation Windpower’s attorney Stephen Brown of Missoula successfully argued in Olson’s court in February that the operating agreement the pair of companies signed required that the dispute be brought in a California forum, not one in Montana.

Brown successfully argued a similar point when in July 2014, the Montana Supreme Court found in favor of San Diego Gas & Electric Co., (against Naturener USA that owns wind farms in Glacier and Toole counties) determining that the “consent to conduct all” provision of the first contract between the two parties required the parties to litigate all disputes Industrial wind farm has broken ground in county–pub 3-30-16– 2 pertaining to that contract in California. Brown represented San Diego Gas.

In a similar way, Olson dismissed Wilde’s lawsuit against Foundation Windpower, first in the dispute over Fairfield Wind, and second, over the Greenfield Wind

Source: Choteau Acantha Article – Industrial wind farm has broken ground in county-pub 3-30-16- WINData LLC

Great Falls Tribune – Construction back on track at Greenfield wind farm after delay over taxes

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B9321557714Z.1_20160330182312_000_GK7DTU0LD.1-0March 30, 2016

Construction of a 25-megawatt, 13-turbine wind farm seven miles north of Fairfield is back on track, according to the developer.

Martin Wilde, principal engineer at WINData LLC, said Wednesday that foundations are being poured at Greenfield wind farm.

“We’re moving ahead,” Wilde said.

Wilde is partnering with Foundation Wind Power of San Francisco in developing the project.

Dick Anderson Construction of Great Falls is the general contractor.

Towers and turbines will be erected this summer, Wilde said. The goal is to have construction completed by September.

“Our goal has been to keep money in Montana to help Montana communities leverage the wind power opportunities to the full extent,” Wilde said.

Greenfield wind farm is located next to the six-turbine, 10-megawatt Fairfield wind farm, which was completed in 2014.

Construction was halted at Greenfield last summer over property taxes.

At the time, Foundation Windpower said the first property tax bill for the existing Fairfield wind farm came in higher than expected.

Foundation Windpower then applied for tax abatements seeking tax breaks for both the operating Fairfield wind farm and the proposed Glacier wind farm.

An abatement means that the developer will receive a 50 percent tax cut over the first five years with taxes gradually increasing to 100 percent at the end of the 10th year.

Jim Hodgskiss, Teton County commissioner, said commissioners granted a tax abatement for the Glacier project because it still hadn’t been constructed, but denied the abatement for the Fairfield project because it already was completed.

About half of the total tax reduction for the Fairfield wind farm, or about $2 million, would have been shifted onto the rest of the tax rolls if commissioners would have approved the abatement after the wind farm already had been constructed, Hodgskiss said.

“We didn’t feel it was right to shift it back to the rest of the taxpayers after it was built,” Hodgskiss said.

Follow Karl Puckett on Twitter @GFTrib_KPuckett.

Wind farm is planned near existing wind farm north of Fairfield.

Source: Construction back on track at Greenfield wind farm after delay over taxes

Construction back on track at Greenfield wind farm after delay over taxes

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Construction back on track at Greenfield wind farm after delay over taxes Karl Puckett, kpuckett@greatfallstribune.com 3:15 p.m. MDT March 30, 2016

(Photo: Tribune file photo/Karl Puckett)

Construction of a 25-megawatt, 13-turbine wind farm seven miles north of Fairfield is back on track, according to the developer.Martin Wilde, principal engineer at WINData LLC, said Wednesday that foundations are being poured at Greenfield wind farm.“We’re moving ahead,” Wilde said.Wilde is partnering with Foundation Wind Power of San Francisco in developing the project.

Dick Anderson Construction of Great Falls is the general contractor.Towers and turbines will be erected this summer, Wilde said. The goal is to have construction completed by September.“Our goal has been to keep money in Montana to help Montana communities leverage the wind power opportunities to the full extent,” Wilde said.

Greenfield wind farm is located next to the six-turbine, 10-megawatt Fairfield wind farm, which was completed in 2014.Construction was halted at Greenfield last summer over property taxes.At the time, Foundation Windpower said the first property tax bill for the existing Fairfield wind farm came in higher than expected.Foundation Windpower then applied for tax abatements seeking tax breaks for both the operating Fairfield wind farm and the proposed Glacier wind farm.

An abatement means that the developer will receive a 50 percent tax cut over the first five years with taxes gradually increasing to 100 percent at the end of the 10th year.Jim Hodgskiss, Teton County commissioner, said commissioners granted a tax abatement for the Glacier project because it still hadn’t been constructed, but denied the abatement for the Fairfield project because it already was completed.

About half of the total tax reduction for the Fairfield wind farm, or about $2 million, would have been shifted onto the rest of the tax rolls if commissioners would have approved the abatement after the wind farm already had been constructed, Hodgskiss said.“We didn’t feel it was right to shift it back to the rest of the taxpayers after it was built,” Hodgskiss said.

Follow Karl Puckett on Twitter @GFTrib_KPuckett.

Source: Construction back on track at Greenfield wind farm after delay over taxes

North American Windpower: Report: U.S., Mexico Winds Continued Below Normal Trend During Q2

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Wind production during the second quarter was below normal across most of the western U.S. and Mexico, according to Albany, N.Y.-based AWS Truepower’s quarterly wind bulletin.According to AWS, winds were below normal across most of the western U.S., Mexico, India and the Philippines but above normal across most of Central and South America, Europe, and the Pacific Ocean and vicinity.Overall wind speeds across much of the U.S. rounded out the quarter well below normal – continuing the pattern from the previous winter, according to AWS, which notes that the Northeast through Midwestern and Appalachian states experienced higher-than-normal wind speeds through the quarter.As for Mexico, AWS notes that most of northern Mexico experienced winds less than 10% to 20% below the norm. Strongly above-normal wind speeds persisted to the south from the Yucatan Peninsula down through South America and into northern Brazil as well as the extreme south of the continent.

Source: North American Windpower: Report: U.S., Mexico Winds Continued Below Normal Trend During Q2

Granting abatements a win-win – Choteau Acantha: Opinion / Editorial

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The Teton County Commissioners on Thursday will decide whether to grant the Fairfield Wind and Greenfield Wind farms’ requests for property-tax abatements under state law that allows tax breaks for certain new and expanding industries.

We would encourage the commissioners to grant the abatements so they send a loud and clear message that they are pro-business and that they want to encourage economic development in Teton County. This county has an aging, declining population. School districts are seeing their student numbers drop, resulting in the loss of jobs and educational opportunities. The lack of high-paying, manufacturing or industrial jobs or even white-collar positions such as in engineering, architecture, finance and health discourage high school graduates from returning here after they complete their college degrees.

via Granting abatements a win-win – Choteau Acantha: Opinion / Editorial.

Second wind farm going up near Fairfield

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Second wind farm going up near Fairfield

Karl Puckett, kpuckett@greatfallstribune.com 7:41 p.m. MDT May 1, 2015

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(Photo: Tribune photo/Karl Puckett)

FAIRFIELD – Construction of a 25-megawatt, 15-tower wind farm is expected to begin Monday seven miles north of here, following difficult negotiations between the developer and NorthWestern Energy, which will purchase the power.

It’s called Greenfield Wind LLC.

The Montana Public Service Commission, which had rejected a settlement agreement on the power purchase price between NorthWestern and WINData LLC on Dec. 16, reconsidered and approved the 25-year contract March 4.

Now construction can proceed.

“Getting the power contract has been the biggest challenge here,” WINData CEO Martin Wilde said at the Greenfield site.

On Thursday, stakes marked the locations where towers will begin rising in August and September. A strong breeze was blowing 18 mph, which is typical.

“This is perfect wind,” Wilde said.

The Greenfield wind farm is 1.5 miles to the east of the 10-megawatt Fairfield wind farm, which Wilde completed a year ago.

Wilde, an early pioneer of wind development in Montana, would like to see more projects like the Fairfield and Greenfield wind farms constructed by Montana-based, independent power producers, but it isn’t easy, he says.

“In this case, they kind of had it out with us, and we sort of held our own and settled,” Wilde said of negotiations with NorthWestern.

WINData has a 20-year contract to sell power generated at the 10-megawatt, six turbine Fairfield wind farm to regulated utility NorthWestern Energy.

It negotiated a 25-year deal with NorthWestern for the Greenfield energy.

NorthWestern argued that the price of the electricity, $50.49-per-megawatt hour, was too high, Wilde said, and “we fought back.”

NorthWestern always gives prime consideration to how a price will be reflected on the bills of NorthWestern’s 342,000 electricity customers in Montana, NorthWestern spokesman Butch Larcombe said.

“And a lot of times the developers have a different price in mind than we do,” Larcombe said.

The U.S. Public Utility Regulatory Policies Act of 1978 created a new class of generating facilities called “non-utility generators” or “qualifying facilities” that would receive special rate and regulatory treatment.

One of the goals was to encourage development of renewable energy.

Greenfield is a qualifying facility.

In Montana, the Public Service Commission has established two categories of qualifying facilities, Wilde said.

One is the standard size, which is a maximum of 3 megawatts. Those projects come with “standard offer” contracts, and negotiations are not required.

Qualifying facilities that are larger than the standard size require negotiations, and the Greenfield wind farm is the first large QF wind project negotiated and approved in Montana, Wilde said.

Instead of NorthWestern producing the power, Wilde said, it is purchasing green energy from an independent power producer, bringing diversity to its power mix, Wilde said. WINData carries the risk for generation, not NorthWestern’s ratepayers, he added.

When NorthWestern needs power the most is at times of peak demand, when it’s very cold or hot, Larcombe said.

“And unfortunately, a lot of times, that’s when the wind isn’t blowing,” Larcombe said. “We have concerns about the wind’s ability to meet the needs of our portfolio at this point.”

Wilde started out in the wind business in Montana in 1991. He’s owned his own companies and also worked for the U.S. Department of Energy.

He’s investigated many sites for wind potential in state. That leg work has attracted large wind developers, he said.

“We were trying to get commercial wind energy in Montana,” he said.

Today, Wilde owns WINData LLC based in Fairfield.

While Montana has seen some successes in wind development, Wilde says the development climate is poor compared to other states such as Texas.

“It’s like learning how to box in prison,” Wilde said. “It’s a difficult environment to do wind, period.”

The export of wind-generated electricity from Montana could be robust, but Wilde says the NorthWestern seems intent to stick with hydro and coal generation.

Larcombe, NorthWestern Energy’s spokesman, defended the utility’s efforts to own and purchase renewable power.

NorthWestern owns or has contracts with 17 different wind projects in Montana with a capacity of 282 megawatts, he said.

“To say we’re not interested or haven’t been involved in wind production really isn’t an accurate statement,” he said.

When NorthWestern purchased PPL Montana’s hydroelectric facilities in November, it changed the look of the utility’s energy portfolio, he said.

The dams are helping NorthWestern meet the typical needs for electricity in Montana, he said.

Wind in the Fairfield area doesn’t blow trains off the tracks, as it’s been known to do in locations such as Browning, Wilde said.

However, there is always a breeze.

General Electric turbines that produce 1.7 megawatts each will be erected at the Greenfield wind farm.

The distance from the ground to the tip of the blades will be 422 feet, or about 42 stories.

They are the largest wind turbines in the state, Wilde said.

“They lend themselves to calm but constant winds, which is the kind of wind we have here,” Wilde said.

The wind farm should be connected to the grid by November, Wilde said.

WINData is partnering with Wind Power of San Francisco, which will help to arrange financing through large investment banks, Wilde said.

It usually costs about $2 million per megawatt to build a wind farm, which would put the project in the $45 million to $50 million range.

Dick Anderson Construction out of Great Falls has been hired for the job. GE will assist in installing the turbines.

The 15 wind towers will stand on a ridge in two rows on a ridge overlooking wheat and hay fields.

The land is being leased from four property owners who will receive royalties based on production.

“So this is an additional crop for farmers,” Wilde said.

Reach Tribune Staff Writer Karl Puckett at 406-791-1471, 1-800-438-6600 or kpuckett@greatfallstribune.com.

via Second wind farm going up near Fairfield.

Choteau Acantha Article – Wind Farm asks PSC for reconsideration

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February 4th 2015

A stalled project to put 15 industrial-sized wind turbines next to the six already up and running between Choteau and Fairfield will get reconsideration before the Montana Public Service Commission on Feb. 10.

Martin Wilde of Fairfield, working through the company, Greenfield Wind L.L.C., has been in a disagreement with NorthWestern Energy since April 2014 over what the utility will pay the wind developer for each megawatt-hour generated. The cost to integrate the intermittent energy into the region’s power grid is also unsettled.

In December, both parties agreed to a price to avoid further litigation, and filed a joint motion to approve a settlement agreement with the PSC, but the commissioners denied the settlement by a 3-2 vote.

Since that time, Brad Johnson replaced Bill Gallagher on the commission. Gallagher, Roger Koopman and Kirk Bushman voted against the settlement, while Travis Kavulla and Bob Lake voted for it.

Wilde called the denial “an 11th hour surprise reversal ruling” that “appeared to result from Gallagher placing his personal opinion and politics ahead of federal and state laws and ahead of the best interests of Montana rate payers.”

The PSC has invited the parties to present oral arguments for reconsideration at its Feb. 10 meeting in Helena.

At stake is whether Teton County will see a doubling of wind generation and an additional six-figure tax bill it will pay. Wilde’s Fairfield Wind six-turbine project that cost more than $25 million will start paying taxes next November.

Greenfield Wind attorney Ryan Shaffer of Missoula stated in his written motion to reconsider that the PSC’s decision was “unlawful, unjust and unreasonable” and constitutes an unlawful discrimination against “qualifying facilities,” namely, certain types of small power generation facilities, such as those from renewable-energy sources like the wind.

According to the Edison Electric Institute, the federal Public Utility Regulatory Policies Act of 1978 (PURPA) requires electric utilities to purchase energy offered by qualifying facilities. The goal is to support the development of small, onsite renewable generation and to promote diversity of a utility’s supply portfolio.

Montana has a renewable portfolio standard that requires public utilities to obtain a percentage of their retail electricity sales from eligible renewable resources. That percentage grew to 15 percent in 2015 after starting at 5 percent in 2008.

The PURPA also requires utilities to purchase electric energy from qualifying facilities at rates that are just and reasonable to consumers and that are equal to the utility’s avoided cost, defined as the incremental energy and capacity cost the utility would have incurred generating power from its own operating plant.

The state, through the PSC, governs the process to define those rates and has set a standard rate for certain qualifying facilities, but the Greenfield Wind project does not meet the criteria for that rate.

Wilde said that Greenfield has been seeking a long-term contract under PURPA with NorthWestern since 2010. But those efforts have been stymied, Wilde said, by the PSC’s rules prohibiting such long-term contracts for projects over a three-megawatt eligibility cap for the standard rate. Greenfield would generate 25 megawatts.

The rule used to be that the standard rate would apply to facilities generating 10 megawatts or less, and Wilde’s Fairfield Wind six-turbines qualified for the standard rate by generating 10 MW.

While the two parties were far apart at first in their proposed rates for the power, Shaffer said, “Greenfield recognized that with some concessions on Greenfield’s part, the gap between the rate proposed by NorthWestern and the rate proposed by Greenfield could be largely bridged.”

The negotiated rate is $50.49 per megawatt-hour if Greenfield pays NorthWestern for integration or $53.99 per MWh if Greenfield delivers a wind-integrated product. Another stipulation calls for Greenfield to delay the commercial online date until 2016.

Back in 2011, NorthWestern was paying a weighted average cost of $60.44 per MWh for qualifying facilities.

The PSC staff recommended that the commission approve the settlement but the commission voted otherwise.

Recent case law in the state determined that rates for purchases from qualifying facilities must be based on “current avoided least cost resource data,” Shaffer said. He argued that the market prices underlying the negotiated rate and the PSC staff’s benchmarking analysis come directly from NorthWestern’s 2013 least cost plan.

Shaffer alleges that the Federal Energy Regulatory Commission found that the PSC is failing to implement federal law for projects exactly like Greenfield. His argument is tied to the PSC’s recent approval of NorthWestern’s purchase of PPL’s hydroelectric dams. That process used the same market rates for evaluating whether the hydroelectric power system was a least-cost source. The commission voted for approval of the acquisition, Shaffer said.

He said the settlement rate “would save between $5.9 and $10.6 million over the life of the project compared to the two most reasonable alternative avoided-cost benchmarks.”

Wilde said, “Rejection of the unopposed settlement unreasonably deprives NorthWestern’s customers of the benefits of these favorable rates.”

He added that Greenfield’s rates would be significantly higher if Greenfield is forced to fully litigate its claim to a “legally enforceable obligation,” which is a “must-buy” provision of PURPA.

He explained that PSC’s own rules provide that a utility shall purchase available power from any qualifying facility at either the standard rate determined by the commission to be appropriate for the utility, or at a rate which is a negotiated term of the contract between the utility and the qualifying facility.

http://www.choteauacantha.com/
Feb 4 2015

Clearing Up – Greenfield Wind, NorthWestern Ask MPSC to Reconsider Contract

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Greenfield Wind and NorthWestern Energy have asked the Montana PSC to reconsider its rejection of a power purchase agreement for the output from Greenfield’s 25-MW wind project, which is under construction near Fairfield, Mont.

By a 3-2 vote, the PSC in December refused to approve the contract, even though most parties in the case supported the deal and none opposed it [Docket No. D2014.4.43].

“This motion presents a critical question of whether the commission will approve a reasonable long-term avoided cost negotiated between a large QF and NorthWestern, or whether the commission will subject the parties, and quite possibly the commission itself, to further litigation,” Greenfield said in its Jan. 8 filing, which called the decision “unlawful, unjust and unreasonable.”

The decision was made during a Dec. 16 commission work session after considerable discussion of the perceived pros and cons of the 25-year deal, which included a net rate of about $50.49/MWh if the developer paid NorthWestern for wind integration, or $53.99/MWh if Greenfield delivered a wind-integrated product.

During settlement discussions with NorthWestern, Greenfield agreed to delay the commercial on-line date for the full contract rate until 2016, in light of the utility’s near-term long position It would receive $19.99/MWh, minus integration costs, for any generation delivered in 2015; its currently scheduled on-line date is Oct. 15, 2015.

NorthWestern initially asked the commission in April 2014 to set terms and conditions of the PPA because it was not selected through an all-source solicitation, as required under a commission rule that FERC previously determined was inconsistent with PURPA regulations (CU No. 1639 [13]).

“NorthWestern is in the untenable position of being constrained by an administrative rule that FERC has found to be inconsistent with federal law,” the utility said.

The rates and terms in the stipulation “are consistent with, and likely significantly below, any reasonable current estimate of NorthWestern’s actual avoided costs,” Greenfield said in its Jan. 8 petition.

MPSC staff’s projections indicated the settlement rate would save NorthWestern’s customers between $5.9 million and $10.6 million over the life of the project, compared to the two most reasonable alternative avoided-cost benchmarks, Greenfield also said in its filing—and pointed out that the rates were lower than all five of the benchmark rates staff used in its evaluation.

In fact, the market prices underlying the negotiated rate and staff’s benchmarking analysis came from NorthWestern’s 2013 least-cost plan, and are the same prices used to evaluate whether the utility’s recent acquisition of PPL Montana’s hydro resources was a least-cost resource, Greenfield said.

Commissioner Travis Kavulla, who voted to approve the stipulation, said during the Dec. 16 work session that commission staff used more analysis in reviewing the Greenfield deal than NorthWestern did to assess the value of its $870-million purchase of PPL Montana’s hydro portfolio (CU No. 1662 [13]), under which power is priced at about $57/MWh.

That acquisition was also approved outside of an all-source solicitation, Greenfield’s filing noted.

Rejection of the negotiated rate will “launch the parties and the commission back into unnecessary and costly litigation,” Greenfield said, and could result in rates that are significantly higher than those included in the stipulation.

Greenfield also said the apparent rationale for rejection of the unopposed stipulation “rests upon unlawful discrimination against QF projects, which combined with other recent events would constitute an actionable violation of federal and state law if allowed to stand.”

The notice of commission action denying the settlement did not articulate the commission’s reasons for denial, NorthWestern pointed out in its filing in support of Greenfield’s petition. Besides reconsideration, NorthWestern asked the commission to provide the rationale for its decision.

Chair Bill Gallagher led the opposition to the settlement during the commission’s work session.

“I am dissatisfied that this stipulation is fair and reasonable,” Gallagher said during the meeting. “I like stipulations to come after hearings.”

Gallagher added that the record was insufficient and went on to criticize FERC’s PURPA regulations, likening them to a program that would provide unskilled people with incentives to become housepainters and then require homeowners to purchase their services over those of more qualified painters.

Gallagher also warned that if the PSC approved the settlement, there would be a line of developers down the hall applying for QF status. “What are you going to do with the ones that follow? NorthWestern would end up selling this unneeded power at a loss,” he said, adding that “these new QFs will come in and offset our native power.”

Gallagher has since retired from the commission and was replaced in January by Brad Johnson, who was elected in November 2014.

Greenfield is hoping the change in chair may result in a different outcome.

“Any commissioner that is going to obey federal and state law and be responsive to recent FERC and state court rulings and has the interest of Montana ratepayers will vote in favor of this—there is no other vote,” Greenfield spokesman Marty Wilde told Clearing Up.

“This is a clear case of where federal and state law—and the Montana commission’s own rulings—dictate what the decision needs to be.”

Then there’s the economics, Wilde said—the commission approved the PPL Hydro purchase at about $58/MWh, and “we’re looking at $50.49/MWh.

“We’re pretty hopeful that once they reconsider, maybe with the fresh eyes of Brad Johnson, they’ll be clear on what the right decision is.”

Montana PSC attorney Jason Brown said staff will likely waive the requirement for action on the motion within 10 days of filing—otherwise the petition would be automatically deemed denied—so the commission can take it up later this month.

If the commission rejects the petition and settlement, there’s a good chance the case will be continued and heard on its merits, Brown said.

The PSC could also agree to reconsideration and then issue an order approving the settlement [Jude Noland].

Copyright © 2015, Energy NewsData Corporation
Clearing Up • January 16, 2015 • No. 1680 • Page 11

Clearing Up.

via WINData LLC – Wind energy engineering since 1991.

Greenfield Wind and Northwestern Energy file Unopposed Joint Motion to Settle Before the Montana PSC

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Greenfield Wind, LLC and NorthWestern Energy presented an unopposed joint settlement to the Montana PSC for approval in November 2014, and although there was not opposition at the hearing on December 1st, the settlement was inexplicably denied in mid December by an 11th hour surprising reversal ruling.

The December 16th Decision denying the Unopposed Stipulation appeared to result from past commission chairman Gallagher, who did not attend the December hearing, placing his personal opinion and politics ahead of Federal and State law and ahead of the best interests of Montana rate payers.

In response, on January 8th, Greenfield Wind filed a Motion for Reconsideration, which is currently before the Montana Public Service Commission and presents a critical question of whether the Commission will approve of a Qualifying Facility negotiating with NorthWestern to obtain reasonable long-term avoided cost rates as directed by PURPA and supported by recent rulings from FERC and Montana State Courts, or whether the Commission will subject the parties, and quite possibly the Commission itself, to further litigation.

After eight months of work on the contested case and the settlement, the December 16th last minute reversal decision to deny the unopposed settlement was not only surprising but unlawful, unjust, and unreasonable, and should thus be reconsidered for the following reasons:

  • First, the record abundantly supports a conclusion that the rates and terms contained in the Stipulation are consistent with, and likely significantly below, any reasonable current estimate of NorthWestern’s actual avoided costs. The Commission Staff’s analysis demonstrated that the Settlement rate would save between $5.9 and $10.6 million over the life of the project compared to the two most reasonable alternative avoided cost benchmarks. Rejection of the Unopposed Settlement unreasonably deprives NorthWestern’s customers of the benefits of these favorable rates.
  • Second, Greenfield Wind submits that the avoided cost rates will be significantly higher if Greenfield is forced to fully litigate its claim to a legally enforceable obligation (“LEO”) at the Commission and any subsequently necessary judicial proceedings – thus subjecting NorthWestern’s customers to higher rates than those offered in the Unopposed Stipulation.
  • Third, the apparent rationale for rejection of the Unopposed Stipulation rests upon unlawful discrimination against QF projects, which combined with other recent events would constitute an actionable violation of federal and state law if allowed to stand.
  • Fourth, the rejection of the negotiated rate between NorthWestern and Greenfield will launch the parties and the Commission back into unnecessary and costly litigation.

LEGAL BACKGROUND
If a state chooses to regulate electric utilities, it must implement the Federal Energy Regulatory Commission’s (“FERC”) regulations under the Public Utility Regulatory Policies Act of 1978 (“PURPA”) (16 USC § 824a–3(f)(1); FERC v. Mississippi, 456 U.S. 742, 751, 102 S.Ct. 2126, 2133 (1982)).

FERC’s regulations, which are adopted by ARM 38.5.1902(1), require state commissions to implement PURPA in a way that requires a utility to purchase energy and capacity from QFs at the full avoided costs of the purchasing utility (Amer. Paper Institute, Inc. v. Amer. Elect. Power Serv. Corp., 461 U.S. 402, 415-18 (1983)).

The Montana Supreme Court has explained: “PURPA requires large utilities to purchase energy from smaller qualifying facilities at rates that allow the small facilities to become and remain viable suppliers of electricity.” (Whitehall Wind, LLC v. Montana Pub. Serv. Comm’n., 355 Mont. 15, 16-17, 223 P.3d 907, 908-09 (2009)).

FERC’s regulations also permit a QF and an electric utility to enter into a contract containing agreed-to rates, terms, or conditions. 18 C.F.R. § 292.301(b). FERC has explained that “a contracted-for-rate would never exceed true avoided costs and would thus be consistent with PURPA.” (Cedar Creek Wind LLC, 137 FERC ¶ 61,006, at n. 73 (2011) (citing Order No. 69, 45 Fed. Reg. 12,214 (1980))).

This rule “recognizes that the ability of a qualifying cogenerator or small power producer to negotiate with an electric utility is buttressed by the existence of the rights and protections of [FERC’s] rules.” (45 Fed. Reg. at 12,217)

FERC has rejected state implementation schemes that stand as an impediment to such amicable contract formation (Grouse Creek Wind Park, LLC, 142 FERC ¶ 61,187, at P 40 (2013)) and some courts have reversed state commission decisions rejecting agreed-to PURPA rates (Pub. Util. Commn. Of Texas v. Gulf States Utilities Co., 809 S.W.2d 201, 208-09 (Texas 1991)).

Montana’s “mini-PURPA” further instructs the Montana PSC. It declares: “Long-term contracts for the purchase of electricity by the utility from a qualifying small power production facility must be encouraged in order to enhance the economic feasibility of qualifying small power production facilities.” (M.C.A § 69-3-604(2) (emphasis added)).

The Commission’s own rules provide, “Each utility shall purchase available power from any qualifying facility at either the standard rate determined by the commission to be appropriate for the utility, or at a rate which is a negotiated term of the contract between the utility and the qualifying facility.” (ARM 38.5.1905(2)).

However, the MPSC has also implemented a rule that requires QFs sized over 3 megawatts (“MW”) to prevail in an all-source competitive solicitation to obtain a long-term contract (ARM 38.5.1902(5)). Because NorthWestern has not been compelled to regularly hold such solicitations, FERC declared this rule constitutes a failure to implement PURPA’s bare minimum requirement to make long-term avoided cost rates available to QFs (Hydrodynamics, 146 FERC ¶ 61,193, PP 32-35 (2014)).

The Montana courts have likewise faulted the Commission for failure to provide reasonable avoided cost rates to QFs (See Whitehall Wind, LLC, 355 Mont. at 18, 223 P.3d at 909 (reversing rate determination where “the PSC’s own staff economist contradicted the PSC’s rate determination”)); (Whitehall Wind, LLC v. Montana Pub. Serv. Comm’n, Cause No. DV-03-10080, Remand Order (Mont. 5th Dist., May 21, 2014) (again reversing the MPSC’s subsequent order)).

PROCEDURAL AND FACTUAL BACKGROUND
Greenfield has been seeking a long-term contract under PURPA with NorthWestern since 2010. It has spent substantial sums of time and money to develop its wind project in reliance on federal and state law. But those efforts have been stymied since at least 2010 by the Commission’s rules prohibiting such long-term contracts for projects over the eligibility cap for standard rates and outside of the 50-MW cap for wind projects.

NorthWestern states that it filed the original Petition in this case at the PSC because the Commission has not authorized it to enter into long-term contracts outside of an all-source solicitation. In the absence of a Commission-approved methodology to calculate long-term rates for Greenfield Wind’s project, the parties engaged in extensive and costly discovery and contested proceedings over the most appropriate methodology.

Through the Commission’s proceedings and discovery processes, Greenfield was able to review NorthWestern’s data and calculations. In doing so, Greenfield recognized that with some concessions on Greenfield’s part the gap between the rate proposed by NorthWestern and the rate proposed by Greenfield could largely be bridged. Additionally, a contested transmission cost issue became moot when Gaelectric’s senior transmission requests were withdrawn and removed from the transmission queue – further bridging the gap between the parties.

Thus, Greenfield and NorthWestern were able to negotiate a rate that was derived using NorthWestern’s method of estimating the avoided costs. The net Stipulation/Settlement rate is approximately $50.49/MWh if Greenfield pays NorthWestern for integration, or $53.99/MWh if Greenfield delivers a wind integrated product. Due to NorthWestern’s near-term long position, Greenfield agreed to delay the commercial online date for the full contract rate until 2016, and will only be paid $19.99/MWh (minus integration costs) for any generation delivered in 2015.

In light of the fact that NorthWestern is a regulated utility and the Commission has approved no methodology to calculate large QF rates, such approval is necessary for the project to move forward without further delay.

On December 1, 2014, the Commission held an evidentiary hearing on the Stipulation. Multiple rounds of testimony from Greenfield and NorthWestern and all data requests were admitted into the record for purposes of evaluating the Stipulation. All of NorthWestern and Greenfield’s witnesses were made available for live or telephonic cross examination. The Montana Consumer Counsel (“MCC”) and LEO Wind, Inc. both attended the Stipulation hearing. Neither of them opposed the Stipulation or requested post-hearing briefing to challenge its terms.
On December 16, 2014, the Commission held its work session on the Stipulation.

The Commission’s Staff presented a memorandum summarizing the terms of the Stipulation, including five market benchmarks against which to compare the Stipulation rate. Each of Staff’s five benchmark rates were higher than the Greenfield Wind rate. Thus, Commission Staff recommended approval of the Stipulation.

The PSC Commission’s Staff explained: The reasons to approve, would be that the rate appears to reasonably approximate avoided costs. It would avoid expenditure of further resources by all parties, including the Commission, on this matter. It would signal that NorthWestern can negotiate with large QFs, and that the PSC will implement rates for large QFs.

In fact, the Commission’s Staff explained that its portfolio comparison benchmark analysis, using the same inputs used to model the PPL Montana Hydroelectric Projects (“PPL Hydros”), demonstrated that “having Greenfield energy as part of the portfolio saves the portfolio costs.” But the Commission voted to reject the Stipulation by vote of three to two.

Former Commissioner Gallagher, as well as Commissioners Koopman and Bushman voted against the Stipulation, while Commissioners Kavulla and Lake supported approving the settlement.

==January 12, 2015

Marty Wilde, WINData LLC