In the People's Interest

NorthWestern Energy’s profit-seeking scheme


On May 14, 2021, NorthWestern Energy will ask the Montana Public Service Commission to approve construction of a 175 megawatt gas fired power plant to cost $250 million. NWE intends to build three more such plants. The predicate for construction is NWE’s ongoing three year propaganda campaign to create public acceptance of an imminent Montana power shortage. Is there a shortage or is this another NWE scheme to raise rates and profits?
In a recent forecast for the PSC, NorthWestern stated that in 2039 (in 18 years) “peak load” (once a year high usage) will be between 1350/1575 megawatts. On Dec. 19, 2019, NWE’s press release stated current peak load was 1205 MW and existing generating capacity was 755 MW, yielding a deficit of 450 MW. Just a month later a customer mailing stated the MW deficit was 320 MW; 29% less than NWE had stated 30 days before. On Dec. 10, 2019, CEO Rowe stated there was “right now… an urgent capacity shortage”. Similarly, NWE’s April 20, 2021, plant construction press release claimed the new gas plant will, “…reduce Northwestern’s capacity deficit”.
Here are capacity facts from NWE’s PSC filings: (1) generating capacity from its plants—1,055 MW, (2) power purchase agreements 470 MW, for a total capacity of 1525 MW. In short, there is a MW deficit only/if/NWE eliminates its long-term renewable energy contracts. Why create a fable about a capacity deficit when peak load demand can be met by contract purchases from Montana solar and wind producers? Why build a CO2 polluting gas plant costing $250 million? Because NWE can put the cost into its rate base to justify a $25 million rate increase annually. Secondly,
NWE could recover construction costs via yearly depreciation charges levied on its customers. For NWE its fable is a win-win, but for customers, lose-lose.
Jerome S. Kalur

Bozeman Daily Chronicle Letter to the Editor 5/11/21

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