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Court ruling doesn't change NorthWestern's plan for power line

A federal ruling that went against NorthWestern Energy on a proposed power line shouldn't change basic plans for the 430-mile line to export homegrown power to out-of-state markets, company officials say. But the recent order has piqued the attention of state regulators, who say they're wondering whether NorthWestern's Montana electric customers could end up paying for part of the line.

HELENA - A federal ruling that went against NorthWestern Energy on a proposed power line shouldn't change basic plans for the 430-mile line to export homegrown power to out-of-state markets, company officials say.

But the recent order has piqued the attention of state regulators, who say they're wondering whether NorthWestern's Montana electric customers could end up paying for part of the line.

"I think there is a greater possibility of that than before," says Public Service Commissioner John Vincent, D-Gallatin Gateway. "I want to make sure that Montanans don't have to carry the burden of exporting that energy, for the profit of NorthWestern."

The debate is over NorthWestern's plans to build a $1 billion, 500-kilovolt power line from Townsend to south-central Idaho.

The line would create a new, expanded route for moving electricity generated in Montana to points south, such as lucrative markets in Nevada and California.

NorthWestern officials say the main reason for the line is to boost Montana production of clean energy - namely, wind power - by providing a way to move that wholesale power to markets that want it.

"The country needs new transmission to carry power from these... more [truncated due to possible copyright]  

HELENA - A federal ruling that went against NorthWestern Energy on a proposed power line shouldn't change basic plans for the 430-mile line to export homegrown power to out-of-state markets, company officials say.

But the recent order has piqued the attention of state regulators, who say they're wondering whether NorthWestern's Montana electric customers could end up paying for part of the line.

"I think there is a greater possibility of that than before," says Public Service Commissioner John Vincent, D-Gallatin Gateway. "I want to make sure that Montanans don't have to carry the burden of exporting that energy, for the profit of NorthWestern."

The debate is over NorthWestern's plans to build a $1 billion, 500-kilovolt power line from Townsend to south-central Idaho.

The line would create a new, expanded route for moving electricity generated in Montana to points south, such as lucrative markets in Nevada and California.

NorthWestern officials say the main reason for the line is to boost Montana production of clean energy - namely, wind power - by providing a way to move that wholesale power to markets that want it.

"The country needs new transmission to carry power from these new sources of energy into areas that are not currently served (by this power)," says Claudia Rapkoch, spokeswoman for NorthWestern in Butte. "It is a complete step-change in terms of building and growing an industry, not just in Montana, but throughout the country as well."

The line also would be a money-maker for NorthWestern, as it charges for traffic on the line.

But three weeks ago, the Federal Regulatory Energy Commission rejected a proposal by NorthWestern to charge "negotiated rates" on the line.

NorthWestern officials say they wanted negotiated-rates authority because it would give them more flexibility in charging generators to use the line.

For example, the company might arrange for several wind power projects to pay a collective price to cover initial line costs, rather than charging each one a separate price that might be higher for the individual project, says David Gates, NorthWestern's vice president for wholesale operations.

FERC, however, said negotiated-rate authority would give NorthWestern too much ability to use its monopoly power on pricing the line. Instead, it said NorthWestern must submit rate proposals to FERC, and that rates will be based on the "cost of service."

FERC also said the line should be considered part of NorthWestern's overall transmission system, and not a stand-alone, "merchant" line that would be operated by an affiliated yet separate company.

Gates said last week the ruling doesn't change NorthWestern's plans, and that the company already had intended to charge transmission rates based on cost of service.

Company officials plan to meet with FERC staff in Washington, D.C., later this month to discuss how NorthWestern can move forward on the line, charge appropriate rates and still have some flexibility in its pricing schemes.

Yet the FERC ruling also raises the question of whether NorthWestern's Montana ratepayers might help pay for building the line, because it would be considered part of the overall electric-transmission system that serves them.

It could be argued that Montana residential and business ratepayers might benefit from the line, some either by getting access to cheaper power or sharing in NorthWestern's profits from moving large amounts of power out of the state.

Montana public service commissioners, however, say they're leery of having Montana ratepayers foot part of the bill for the power line.

"It's absolutely essential that NorthWestern's ratepayers not be asked to pay for that line, or be put at risk if that line flops," says Commissioner Ken Toole, D-Helena. "I'm not so sure that ratepayers should be in the energy markets."

PSC staff attorney Jim Paine says as NorthWestern works out its plans with federal regulators, the PSC will be asking for information on who ultimately pays for the line.

NorthWestern officials insist they want to insulate local customers from the costs or risks of the power line or other transmission projects.

The cost of transmission projects should be borne by those who directly benefit, and that means the power-project developers moving their power over the line or the utilities ultimately buying the power, says NorthWestern President Bob Rowe.

Rowe says the company also sees the 430-mile power line and related projects as a way to boost Montana's power-generation industry.

"Montana has a great resource," he said last week. "We are trying to work as constructively with Montana wind developers as possible, to see their business cases go forward."


Source: http://www.missoulian.com/a...

JUL 13 2009
http://www.windaction.org/posts/21155-court-ruling-doesn-t-change-northwestern-s-plan-for-power-line
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