Large proposed wind farm, with battery storage, asks PSC to set rate

Posted at 4:22 PM, Aug 27, 2018
and last updated 2018-08-27 18:51:32-04

HELENA – A proposed 320-megawatt wind farm in south-central Montana – including battery storage for its power – is asking state regulators to settle a price dispute with Montana’s largest utility, so it can proceed with the project.

Caithness Beaver Creek formally asked the state Public Service Commission this month to set the rate it will be paid by NorthWestern Energy, saying negotiations had broken down with the utility.

The PSC will set a hearing on the request and decide the issue in the next few months.

Beaver Creek developers say the project on farmland north of Columbus will create 350 jobs during construction, 40 jobs to operate the system and $4 million a year in property taxes for Stillwater and Sweet Grass counties.

Once constructed, it would be the largest single wind farm in the state.

In its filing with the PSC, Beaver Creek said NorthWestern Energy “suddenly changed its methodology” for calculating certain payments for the project, that would reduce first-year payments by $10 million.

“This drastic change of position clearly demonstrates that NorthWestern is not negotiating with (us) in good faith,” the developers said in documents filed with the PSC.

A spokesman for NorthWestern said the company will answer the claims in written filings with the PSC.

The Beaver Creek project is technically four separate wind farms of 80 megawatts each, so it can qualify as an independent renewable-energy project whose power must be purchased by the utility, under federal law.

Such projects in Montana can be no bigger than 80 megawatts.

Developers said the proposed project also includes up to 160 megawatts of battery storage, so it can provide a steady stream of power to NorthWestern, which serves about 365,000 electric customers in Montana.

Bowen Greenwood, spokesman for the PSC, told MTN News that the multi-project element of the proposal could be a key aspect of the case and the hearing.

“I’m sure that will probably be involved in the hearing at some point, but how that will all play out nobody knows yet, so it should be a really interesting hearing,” he said.

Greenwood said the PSC will be examining the filings and the facts and determining what will be the proper “avoided cost” that NorthWestern should pay for the project’s power – in other words, what the utility would spend on the power if it had to buy that power elsewhere.

“To determine that, we look at a lot of different factors, like the fuel costs, the peak hours and the off-peak hours,” he said. “There will be a hearing and a vote, where we try to figure out what the avoided cost is for this utility.”