The facts are — without action, reliable energy service in Montana is at risk
By John Hines, NorthWestern Energy Vice President, Supply/Montana Government Affairs
The facts don’t lie. Rhetoric disputing those facts doesn’t add up.
That fact is NorthWestern Energy doesn’t have enough 24/7, on-demand generation to serve our Montana customers reliably during critical weather in an affordable manner.
The fact is NorthWestern Energy is responsible for providing reliable, safe energy service at reasonable rates for our Montana customers today, tomorrow and in the future.
Our plans are years in the making to mitigate the risk our Montana customers face. The fact is Montana should increase our energy independence, with more generation resources in the state dedicated to serve Montanans and end the grip of out-of-state energy policies.
The 175 megawatt natural gas fired Yellowstone County Generating Station was selected two years ago from a competitive project solicitation for resources to provide 24/7, on-demand generation our Montana customers need for reliable service in all weather conditions. The third-party solicitation evaluator recommended the project to meet that need reliably at the least cost. Wind, solar, storage, hybrid and other conventional technology projects were evaluated too.
The Montana Department of Environmental Quality issued an air quality permit for the Yellowstone County Generating Station on Sept. 8. 2021 after a thorough review of our application that is consistent with state laws and reguaions.
On April 6, 2023, after more than 550 days of construction work, a Montana District Court judge vacated the permit and sent our application back to the Montana Department of Environmental Quality to analyze again.
Now most of the 250 workers building the Yellowstone County Generation Station, including 190 union craft workers, are laid off. That is a tough blow to the workers and their families and the local and regional businesses supporting those workers and the construction of the plant.
The District Court judge’s order faults the Montana Department of Environmental Quality for not adequately addressing the carbon effect of the plant. But carbon effects aren’t included in the criteria Montana requires to be evaluated for air quality permits. The judge’s order sets a new standard.
NorthWestern Energy’s contractors have worked for a year and a half in all weather conditions so that the Yellowstone County Generating Station will be ready to serve our Montana customers’ peak energy demands a year from now, during the hottest days of summer in 2024 and the coldest nights in winter in 2025.
We’ve spent more than $180 million on construction. The final expected $275 million cost of the plant may increase with this delay and it may not be available to serve our Montana customers next summer.
The negative economic consequences of the District Court ruling will reach beyond the Yellowstone County Generating Station project. Adding carbon effects as a new criteria for Montana air quality permits could impact subdivision development, land fill operations, cement plants and almost any other development in the state.
Those far-reaching negative economic consequences are the reason the Montana Legislature is considering two bills addressing this judge’s decision. NorthWestern Energy didn’t initiate either effort and if passed, neither will apply to the District Court judge’s order vacating the air quality permit for the Yellowstone County Generating Station. But the diverse group of stakeholders supporting the legislation recognize the chilling impact the order could have on development in the state and Montana’s business climate.
To be very clear our Montana customers can’t afford this delay.
A wind or solar project scaled to provide the on-demand, 24/7 energy generation equivalent to the Yellowstone County Generating Station would cost more than $2 billion and $4 billion respectively. Our customers can’t afford those project price tags.
Today up to 40% of the energy needed to meet our Montana customers’ highest demands is from the energy market, most imported from out-of-state. Market energy purchases are extremely costly for our Montana customers, increasing by 59% from 2021 and totaling $130 million in 2022.
Energy companies across the West face risks to energy supply during the next decade. Energy resource concerns aren’t unique to NorthWestern Energy’s Montana customers, but rolling blackouts in the middle of extreme winter cold could be.
The fact is NorthWestern Energy is taking actions now to continue to provide the reliable, safe, cost-effective energy service we do today into the future. That is our responsibility to our Montana customers and it is in the best interest of our state.