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PSC approves contract for wind/battery storage project – but questions remain

Developer will examine details and decide on path forward
Posted at 4:42 PM, Dec 04, 2019
and last updated 2019-12-04 20:08:00-05

HELENA — A proposed southcentral Montana wind-power project with battery storage – a first for Montana – has gained contract approval by state regulators.

But it’s unclear whether the contract and pricing terms for the Caithness Beaver Creek project make it financially viable.

Beaver Creek developers declined to comment Wednesday until they see a final, written order from the Public Service Commission, which voted 3-0 on Tuesday to approve the terms under which the project would sell electricity to NorthWestern Energy.

“I am frankly really excited about this project,” Public Service Commissioner Roger Koopman, R-Bozeman, said as he made the motion leading to approval of the contract terms. “To my understanding, it is the first hybrid (independent renewable-power) project to be approved by any utility commission in the country.”

The proposed project, north of Columbus, is a 120-megawatts of wind power and 40 megawatts of battery storage. The batteries would store power generated by wind turbines, when the power isn’t immediately needed, and then release it into NorthWestern’s system at times of high consumption.

NorthWestern, the state’s largest electric utility, has 370,000 Montana electric customers. Beaver Creek would sell power it generates to NorthWestern, which in turn would use that power to help supply its customers.

While the PSC approved the contract terms, many of them are ones requested by NorthWestern – and contrary to what the developers sought.

Developers said they’d be taking a look at the multiple terms approved by the PSC, to determine what price they’d ultimately be paid by NorthWestern.

Beaver Creek is an independently owned, small renewable power project – which, under federal and state laws, NorthWestern must buy from, under certain conditions.

However, if NorthWestern and developers of these projects can’t agree on contract terms, the developer can ask the PSC to settle the issues – a request made earlier this year by Beaver Creek.

NorthWestern and Beaver Creek had multiple disagreements, on everything from computer modeling used to figure prices to how much Beaver Creek should pay to hook into NorthWestern’s transmission system.

For example, if Beaver Creek produces power that is more than NorthWestern needs on its system at any given moment, the company proposed – and the PSC endorsed – that Beaver Creek essentially won’t be paid for that power.

However, the PSC did approve a provision that said if the project has a higher “capacity” than other wind projects, it would get paid for that production.

Koopman said the commission wanted to act conservatively on the case, because it’s a new type of technology that hasn’t been tried yet on NorthWestern’s system.

“There are a lot of questions that we really can’t answer right now, and that’s what makes this thing tough,” he said. “We want to be ever-mindful that our responsibility as a commission is to encourage projects like this, and, as much as we can, assure to the ratepayer that they are getting fair, reasonable and affordable rates and reliable energy.”