MISSOULIAN EDITORIAL: PSC should approve wind power deal
December 28, 2014 7:00 am
Even as one of the biggest wind energy projects in Montana broke ground near Bridger this month, the state’s Public Service Commission was deciding to deny a contract between NorthWestern Energy and the developers of a new wind power project. That decision, if allowed to stand, bodes ill for new wind development in Montana in the immediate future.
Greenfield Wind is proposing a 25-megawatt wind-power project near Fairfield. The agreement between NorthWestern and Greenfield would allow the energy company to buy power from the wind farm for $54 per megawatt-hour for the next 25 years. That, as reports have pointed out, is less than the cost of power from the 11 hydroelectric dams NorthWestern bought earlier this year.
The PSC approved that purchase, which will provide power at a rate of about $57 to $58 per mWh — even though the deal could cost ratepayers as much as $800 million in excess costs, according to one expert analysis, and will mean a direct rate increase for NorthWestern’s electric customers of more than 5 percent.
With that recent history, it was perplexing to see the PSC get hung up on the wind power agreement on a 3-2 vote. Apparently, the three commissioners who voted against the deal have concerns that NorthWestern was putting itself on the hook to purchase energy it may not need. NorthWestern, not surprisingly, disagrees with the commissioners’ conclusion.
What is somewhat surprising is that the PSC’s own staff, after reviewing the agreement, noted that adding the wind energy from this contract to NorthWestern’s portfolio would actually result in lower costs for consumers. It’s also worth mentioning that even as the PSC was deciding against this deal, wind power developers across the nation were seizing an opportunity afforded by Congress in the final days of the session through a wind production tax credit. The credit applies only to new projects started this year, and with only a few days left in the year, developers are hurrying to get their shovels in the ground.
The developers of the 120-turbine Mud Springs Wind Ranch in Carbon County were among them. Thanks to the tax credit, the $550 million project stands to recoup 2.3 cents for every kilowatt hour of power it produces.
Meanwhile, U.S. Sen Jon Tester, D-Mont., was among those calling for a long-term extension of wind production tax credits starting in the new year. He seems to understand that such incentives help encourage new wind power development, and that Montana, as one of the places in the nation with the most wind potential, is in a prime position to gain from increased wind development.
This kind of activity at the state and federal level helps point which way the wind is blowing. But even setting all that aside, PSC Commissioners Bob Lake, who represents the region that includes Missoula, and Travis Kavulla found nothing in the duly negotiated contract between NorthWestern and Greenfield worth killing the deal; rather, they found that the mutually beneficial settlement to be in the best interests of NorthWestern’s 340,000 ratepayers in Montana.
Greenfield officials have said they plan to ask the PSC to reconsider its decision. This time, the three commissioners who voted to deny the deal — Roger Koopman, Kirk Bushman and commission chair Bill Gallagher — ought to pay closer attention to the information provided by their own staff and the arguments of their colleagues on the commission.
I just signed a letter calling on U.S. Senator Ron Wyden and Congress to renew the vital tax credit for wind and other sources of renewable energy. The Production Tax Credit (PTC) helps wind energy compete with highly subsidized fossil fuel industries, attracts investors for new wind projects, fosters innovation and employs tens of thousands of Americans in the clean energy economy.
Because of wind energy’s growing success, dirty energy billionaires, like the Koch brothers, campaigned to kill the renewable energy credit program. Congress is at a crossroads.
Will they support policies and industries that increase carbon pollution, fueling climate-related disasters? Or will they take action to promote safe, clean energy that will allow us to stabilize the climate?
As incoming Chairman of the Finance Committee, Senator Wyden will play a major role in deciding which direction Congress goes.
Please join me in telling Senator Wyden to renew the renewable energy tax credit now: http://act.engagementlab.org/sign/wind-credit_Wyden/?referring_akid=.227975.zAnFDm&source=taf
By signing the letter, you will send a message the future of our kids and and the stability of our climate are priorities that deserve urgent attention. Thank you for taking action!
PLEASE SIGN THE PETITION via Climate Parents | Senator Wyden: Restore support for wind power!.
Wind in MontanaMontana has wind, lots of wind. The state is ranked among the top five for wind power potential and several large, utility-scale wind farms are in operation. The total capacity of installed commercial wind turbines is more than 500 megawatts. In 2009, Montana ranked 9th in wind electricity generation by state, producing 820,924 MWh of electricity. More than 3 percent of the electricity generated in Montana that year came from wind, a percentage that is even higher today. Judith Gap Wind Farm, Credit: Montana Film OfficeThe following links offer more information about wind and wind development opportunities in Montana. Tax and Other Incentives Wind Data Sources Montana Wind Power Map Permit Requirements Developing Wind Energy on State Lands Basics for Small Wind Energy Systems Net Metering and Easements Wind Powering America U.S. DOE Wind Organizations Commercial Wind Projects Small Wind Installations in Montana AWEA Small Wind Turbine Market Report Wind Powering Montana Workshop Presentations Big Sky, October 3, 2001
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