NWE customers should be concerned

Senator Mary McNally, SD 24 Billings
Thursday, November 7, 2019

Guest Commentary

If you are a customer of NorthWestern Energy (North-Western) then you should be interested in its latest Resource Procurement Plan (Plan).

Publicly owned utilities like NorthWestern are required to periodically prepare these Plans that lay out how the utility will meet energy demands over the next twenty years. Given the rapid changes that are happening in energy markets, this is a challenging task and a moving target subject to revisions over time. The process includes the utility developing a draft Plan for public comment and a final document submitted to the Montana Public Service Commission (PSC), where additional public comment is received. NorthWestern’s 2019 Plan shows the utility’s plan for acquisition of new electricity resources, based on their assumptions about supply and demand; the utility uses computer modeling to evaluate costs and benefits of different energy sources. A competitive solicitation process, using the utility’s modeling, can determine what resources a utility intends to acquire.

I realize eyes are glazing over at this point. I totally sympathize. But this is important. I have served on legislative energy committees over the past 10 years and am currently on the Energy Interim Committee. I am not an expert on energy issues but have learned a lot – enough to be concerned, as a rate payer and a legislator, over aspects of NorthWestern’s most recent Plan.

Northwestern’s Plan is detailed, over 300 pages long, and includes some of the following key take-aways:

- Their model selected gas turbines as the best new resource to build.

- No new renewable energy or energy storage investments are planned.

- Demand-side management does not play a meaningful role.

- There is no discussion of cleanup costs for Colstrip.

- Colstrip Unit 4 is assumed to continue to operate as is for the next 20 years.

I am especially concerned with this last assumption. While NorthWestern was developing its Plan, the other four regulated owners of Unit 4 were conducting scenario analyses that planned exits within the next 6-11 years. Just last week PacificCorp announced it would be exiting from Unit 4 in 2027 (because renewables were more cost effective going forward).

Colstrip is a very important asset for NorthWestern, but the risk that the facility could close in the near future due to other owners getting out is very real. Providing options for how to respond to this scenario should be explicitly addressed in North-Western’s Plan. Unfortunately, NorthWestern declined to model this significant risk. I am concerned that ratepayers could be faced with another ‘surprise’ request to acquire additional ownership of Unit 4 in several years and, similar to last legislative session, we will be in the dark about how much that would actually cost, or even if it is the best option.

This issue was raised at the last Interim Energy meeting with both NorthWestern and the PSC Chair, but there was no assurance it would be addressed in the current Plan. I remain concerned and encourage people to contact their PSC Commissioner and NorthWestern during the public comment portion of this Planning process to ensure this critical issue of Colstrip 4 is addressed in a way that protects consumers.

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