With peak winter electrical bills past and summer air-conditioning charges probably a month or more away, the Montana Public Service Commission today will consider how best to meet future electricity supply needs.

Montana law requires that NorthWestern Energy submit proposals for an electrical supply portfolio to the PSC every two years. The state's largest electrical utility, NWE distributes power to 320,000 Montana customers. However, it is buying that electricity supply from other companies. The supply portfolio is the subject of the public hearing today in Helena before the PSC.

Hearing in Helena today

What goes into the portfolio matters because NWE will pass along the costs to its customers. Late last year, NWE submitted lengthy, detailed documents with many possible portfolio options, including preferred alternatives, for the future power supply to its customers. Those proposals have been analyzed and commented upon by the PSC and others. Today is the formal public airing of the plan and comments.

As Chairman Greg Jergeson explained, the PSC doesn't approve or reject the supply portfolio. It "comments" on it and considers the portfolio and comments in future rate-setting cases. It's important to remember that in Montana's partially deregulated electricity market, the PSC no longer regulates the power supply to NWE customers, just the distribution. Jergeson noted that Montana law also provides that the PSC would regulate charges for power generated by NWE. The company has indicated it plans to propose building a gas-fired electrical plant. Preferred alternatives in its proposed energy portfolio include new megawatts of power from natural gas.

Wind energy issues

The preferred alternatives include additional wind power. For now, NWE is buying power from the large wind farm near Judith Gap and incorporating it into the portfolio at a cost significantly below the average power portfolio price. However, as reported by The Gazette State Bureau, NWE has said that other costs associated with having wind power in its portfolio are expected to rise this year. Small Montana wind energy producers are challenging NWE's proposal to charge them more for "integrating" their product into the portfolio. The wind producers contend that the costs NWE wants them to pay are more than what "integrating" their electricity actually costs. Further, the wind energy producers say NWE's proposed pricing could put them out of business. NWE has said that its customers will have to pay these costs if the wind energy producers don't.

In its portfolio proposals, NWE assumes a carbon tax will be implemented in the future, making coal a less appealing source than in the past. The proposed portfolio also assumes the customer will increase energy conservation.

How much should Montanans rely on wind power? Coal? Natural gas? Other alternatives? Let your elected PSC know what you think by commenting online at psc.mt.gov/Consumers/comments or writing to the Public Service Commission, P.O. Box 202601, Helena, MT 59620.