HELENA-State regulators this week set the terms for a proposed wind-power project near Martinsdale, in central Montana – but the developer said Wednesday those terms make the project “uneconomic” and unable to go forward.
“These terms would make it extremely difficult, if not impossible, for any new (small, independent renewable) projects to be constructed in the state of Montana,” TransAlta Corp. spokeswoman Tracey Hatcher told MTN News.
The state Public Service Commission voted Tuesday to set a price of $23.30 per megawatt hour for power produced by New Colony Wind’s proposed 23-megawatt wind farm.
That price, which is what New Colony Wind would receive for wholesale power sold to the state’s dominant utility NorthWestern Energy, is nearly 50 percent lower than the price sought by the developer.
The five-member PSC also said New Colony could have a 15-year contract, instead of the 25-year contract sought by the company.
Hatcher said while the project would “lead to significant economic benefits” for the Harlowton-Martinsdale area, TransAlta won’t proceed with the project under those terms.
TransAlta, based in Calgary, Alberta, is a major power producer in Canada and says it is “actively expanding its renewable generation fleet,” looking to invest in areas “that are supportive of the economic development opportunities that renewable projects provide.”
The PSC set the rates for the proposed project because it’s a small, non-utility-owned renewable power project subject to a federal law attempting to encourage such projects.
Under the law, if the area utility buying the power and the developer can’t agree to contract terms, the PSC must set a price and terms that the PSC determines are reflective of the current wholesale electricity market.
NorthWestern Energy had objected to New Colony’s requested price of $43.63 per megawatt hour – which is what NorthWestern would pay to buy power as part of its “portfolio” of electricity sold to retail customers in Montana.
It had asked the PSC to set the much lower price of $13.96 per megawatt hour.