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NorthWestern Energy still trying to squash Wind Power in Mont. February 22, 2009

Filed under: Montana,Utility Companies,Wind — nwrenewablenews @ 12:47 pm
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Named after the tiny community in Northcentral Montana, the company specializes in small wind projects. Really small. The amount of electricity one of Two Dot’s wind farms produces is comparable to what a single large house uses in a year.

But small wind producers are facing big problems in Montana, Dogerom says, having to do with a big company – NorthWestern Energy.

The utility is required by federal law to buy electricity from providers like Two Dot Wind, but has some freedom when it comes to negotiating the terms of those sales. While the Public Service Commission mediates the negotiations, small companies like Two Dot Wind “are just getting stomped on,” Dogerom said, being forced into contracts that unfairly squeeze Two Dot’s bottom line. Or, in some cases, they are not getting contracts at all.

It seems NorthWestern doesn’t want their wind, he said.

Now, Dogerom is lobbying for lawmakers to find a fix for the problem. He has an ally in Rep. Brady Wiseman, a Bozeman Democrat who is sponsoring a couple of pieces of legislation that would ramp up small-scale energy production in the state.

Dogerom also has an ally in Public Service Commissioner John Vincent of Gallatin Gateway, who wants to know why there isn’t more wind being harnessed in Montana.

But he has one serious adversary: NorthWestern Energy, which is pushing back against legislative efforts to bolster small-scale energy production.

Which side wins will have serious implications for the profile of Montana’s energy future.

The bills

Wiseman is sponsoring two bills that would expand small-scale energy production in the state of Montana.

One would allow local governments to give residents loans for energy-efficiency improvements, including the addition of solar panels and wind turbines.

The other bill is aimed at helping out wind producers like Dogerom by having the government set a fixed price for how much the utility will pay for electricity generated by small producers.

Wiseman pitches the bills as steps toward giving Montana ownership of its power.

“It’s what people expect,” Wiseman said. “Because it is renewable and because it is distributed, not just in generation, but in ownership. We the people are going to have access to owning our own power generation.”

The lobby

John Fitzpatrick is NorthWestern Energy’s executive director of government affairs in Helena, and he is lobbying against both of Wiseman’s bills.

Wiseman’s loan idea, Fitzpatrick said, highlights the problem with small-scale production: It’s not economical for the average homeowner.

“Small-scale electric generation technology is not cost effective,” he said. “When individuals install it, it either has to be subsidized by the government or by the utility, or the individual has to be sufficiently wealthy to afford payback as long as 50 years.”

And he doesn’t mince words when describing Two Dot’s product.

“If this was a quality electric product, it should be able to be sold into the market to utility buyers. It is not quality electricity, so the utility is forced to buy it,” he said this week in an interview in the Capitol.

Both state and federal law require utilities like NorthWestern to buy power from small “qualified facilities” that produce renewable energy. That regulation is burdensome enough, Fitzpatrick said.

The problem with “QF” juice is that it is more expensive, he said. One of the reasons is the cost of keeping the electric grid stable as wind generators fire up and slow down with the gusts.

Every time NorthWestern buys “QF” power, it eats part of the extra cost and passes the rest onto its customers. Firtzgerald, who carries a photocopy of his own home energy bill to prove his point, said the extra cost to him in December was $2.39. Over the year, that surcharge n the difference between the price of “qualified” electricity and market price n costs Montanans more than $14 million.

So, when NorthWestern goes into negotiations with QF suppliers, it demands a price that won’t hurt customers, Fitzpatrick said.

Wiseman’s bill would make it so they can’t even do that, he said.

“Customers want cheap electricity. They want it there on a reliable basis,” he said.

Furthermore, Fitzpatrick said, the 2007 Legislature told the energy company to start producing its own electricity at a large scale, not to start buying piecemeal from tiny wind farms. (When Montana Power Co. was deregulated in the 1990s, it sold off its energy production assets; NorthWestern Energy is the restructured Montana Power).

The way to return Montana to the low prices it enjoyed before deregulation, Fitzpatrick said, is to move forward with large-scale projects, not subsidized small ones.

“A small group of legislators is trying to promote politically correct supply contracts to the detriment of the state policy that looks forward to a vertically integrated system,” he said.

The questions

Proponents of the Wiseman’s bills say NorthWestern isn’t being forthright with why it opposes the legislation.

Suzanne Bessette, a lobbyist for small wind producers like Two Dot, said what people’s energy bills don’t show is how much individual “qualified” producers are selling their energy for. Older contracts are expensive for the customer, but new contracts like the one Two Dot finally got from NorthWestern are on par with other sources of power.

As for stability concerns, Fitzpatrick is exaggerating the problem, Dogerom saidd. One of Two Dot’s projects puts as much power on the grid as a large house takes off it.

But to accept these critics’ arguments demands alternative motives for NorthWestern’s opposition to small-source energy production.

Vincent suggests NorthWestern is just bad at wind.

While the state is fifth in wind potential, it is 16th in how much wind energy is actually produced. The other two states where NorthWestern operations, Nebraska and South Dakota, also have far more wind potential than what is harnessed. Nebraska is sixth in potential and 18th in production. South Dakota is fourth in potential and 22nd in production.

“Something doesn’t pass the smell test here,” Vincent said.

But Wiseman says NorthWestern Energy’s opposition is less about wind energy and more about who is producing it.

“They will forbid anybody having energy production,” he said. “They are using all their political clout to stop distribution of energy they don’t run.”

Whatever the reason, for now, small energy producers are slow to get onto the grid. There are 45 contracts pending between small producers and NorthWestern Energy.

Dogerom said he doesn’t expect the bill to help the small producers to pass, but said he and the others had to do something.

“We had to introduce HB 491. We don’t think it’s going to pass, but we’re just getting stomped on,” he said.

Daniel Person, Bozeman Daily Chronicle


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