Library filed under Energy Policy from Montana
In the minds of the public, Montana is awash in wind power projects - but a group of small power producers say it's not so and are pushing legislation they say will help make perception become reality. ...The utility, however, is opposing the measure, saying power from the small projects is too costly. "What they're trying to do is tilt the balance, so we have to take more of (their) power, which is ultimately harmful to consumers," said John Fitzpatrick, NorthWestern's executive director of government affairs in Helena.
Wind-powered electricity has great potential in Montana, but its future is clouded by an outdated transmission system that makes it tough to get the power to market. That was a key message experts delivered Friday at Carroll College during a conference on the state's energy future. Some in attendance urged lawmakers not to forget about the state's coal resources - or to get too excited about creating an energy economy.
Potential wind-farm development was the overriding reason why the state Department of Environmental Quality approved the proposed high-voltage power line that would tread its way across eastern Teton County between Great Falls and Lethbridge, Alta. Montana Alberta Tie Ltd., or MATL, with offices in Calgary, Alta., submitted an application under DEQ's Major Facility Siting Act program on Dec. 1, 2005, providing a variety of reasons why its proposed privately-owned, 230-kilovolt transmission line would benefit the region. ... Aggrieved parties who believe they are adversely affected by DEQ's decision have 30 days to appeal.
The state of Montana has given the green light to a high-voltage transmission line that could trigger millions in green energy production in northcentral Montana. The 600 megawatts of north-south capacity on the Montana Alberta Tie Line has been sold to NaturEner, Invenergy and Wind Hunter. ...Construction won't begin for six months because it will take that long to manufacture the steel poles, which are 90 feet tall and 3 feet in diameter, van't Hof said. Part of the line will also have wooden H-frame poles.
Financing prospects for large-scale energy projects in Montana have dimmed with the crisis on Wall Street, but some that already are under way should proceed as planned, state officials and developers said. ...Gov. Brian Schweitzer told The Associated Press in a recent interview that several companies assured him their projects will not be derailed by the downturn. Still, he cautioned that the recent heady pace of development could end if the economic outlook remains grim and banks stay reluctant — or unable — to make large loans.
Aside from agreeing that Montanans deserve affordable energy, local candidates for the state Public Service Commission disagreed about everything else during a Billings debate Wednesday. Incumbent Brad Molnar, R-Laurel, and challenger Ron Tussing, D-Billings, debated the merits of wind energy ...Wind power is intermittent; it comes and goes with the blowing wind. When the wind dies down, utilities have to have a backup source of energy available, the commissioner said. Molnar said the backup energy has to be bought on the spot market, where rates are most expensive.
The current production tax credit provides a 10-year, 2.1 cent-per-kilowatt-hour tax write-off. But the report argues a key difficulty facing prospective community wind developers is their lack of a large enough tax liability to take full advantage of the federal tax incentives, which makes it financially difficult to complete projects. Larger wind developers, meanwhile, used the tax break to shatter an industry record in 2007 by installing 5,244 megawatts of wind generation nationwide.
NorthWestern Energy said it is seeking permits for a natural-gas-fired power plant near Anaconda, Mont., and hopes to start building the plant next year. ...The $206 million plant would be used to stabilize the electric grid and allow NorthWestern to take more wind power onto the system, company officials said. ...PSC Commissioner Ken Toole welcomed the permit application. He said such a plant could allow for the production of more wind power plants, which require so-called "firming" power to fill in the gaps when winds are not blowing.
The Alberta Utilities Commission's approval Tuesday of the proposed Montana Alberta Tie Ltd. line was the final Canadian permit needed for the 240-kV AC line, which would interconnect electricity markets and carry 300 MW north and south. The commission said the proposed line satisfied its conditions, including a process for negotiating disputes with landowners. ...Wind farm developers in Alberta and Montana have fully subscribed the line for marketing power both north and south.
Coal mines always have been big business. Wind farms are getting to be. And when heavy-hitting companies such as North American Coal Corp., Minnesota Power and Florida Power and Light are eyeing an area of real estate, you bet it's consequential. The real estate isn't paltry; it's a lot of acreage in Oliver and Morton counties. Minnesota Power and FPL want to build separate wind farms. But the coal company says, "Wait a minute, we may want to mine where you guys are talking about putting up wind turbines. That won't work."
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.
Developers of small wind-power projects in Montana have their eyes on the Public Service Commission this week, as it may decide a crucial price issue affecting their ability to succeed. NorthWestern Energy, the state's dominant electric utility and the primary purchaser of wind power in Montana, wants to charge small wind farms for the cost of "integrating" their power into the NorthWestern system, which serves 320,000 customers. The utility says if wind-power developers don't pay that cost, then NorthWestern consumers end up absorbing it. "To have a cost shifted to ratepayers, I don't think is in their best interest," says John Hines, chief supply officer for NorthWestern.
A public hearing on what would be the first merchant transmission line between Canada and the United States drew 100 residents to Great Falls on Tuesday, with economic development officials and elected officials singing its praises and farmers raising concerns. ...For the state to approve the project, the DEQ's Tom Ring said it must find that the line has a minimal impact on the environment and is consistent with regional plans for expansion of the electric grid, while serving the public's interest. The state has only denied one transmission project in the past. Como said MATL would be the first merchant line between Canada and the United States. There is one small line connecting Mexico and the U.S. Traditionally, transmission was constructed by regulated utilities, such as the old Montana Power Co. In the case of a merchant line, a company builds the transmission, and separate power generator entities pay to use it.
A Texas company with Portuguese backing is working with state natural resource officials in central Montana to develop a 300-megawatt wind farm - twice the size of the state's largest existing wind project. Horizon Wind Energy would erect up to 100 turbines near Martinsdale, about 80 miles east of Helena, to tap into winds sweeping through the Musselshell River valley. Horizon had been solicited to develop in the area by the state Department of Natural Resources and Conservation. The agency owns about 2,400 acres of school trust land within the 19,000 acre project site. ...Gene Leary, 67, owns a ranch within a few miles of the proposed wind farm site. He described wind farms as "visual pollution" and said he worries such projects could mar central Montana's scenic vistas, driving down property values and discouraging tourism.
The project, known as the Montana Alberta Tie Line, has secured financing and Canadian regulatory approval, said Johan van't Hof. But the chief executive of the project's parent company said federal and state approval in Montana has been delayed. ...The Montana Alberta Tie Line wants to receive its permits so that wind farms can be built in time to get federal tax credits that expire at the end of the year, van't Hof said. ...Environmentalists have been critical, worrying it could be used to transport electricity from greenhouse gas-producing coal plants.
The message gets repetitious: There needs to be more electrical power transmission capacity in and from North Dakota ... more transmission capacity ... more ... So, isn't the answer as simple as stringing a bunch of lines? The fact is, no. The power has to have somewhere to go and must travel by an extraordinarily complex network of technology. For our area it's managed by a strange entity called the Midwest Independent Transmission System Operator. ...The snag is the process of hooking in a new power source. ...Midwest's queue has 224 wind projects, a 64 percent increase in one year. Not all will make it through the process; actually only 32 percent will end up connecting and producing. About 40 percent of requests drop out before even commencing the required FERC study. And 10 percent of those in the queue don't help matters at all, because they're just sitting on approvals ...
We're all for energy conservation and alternative energy sources being brought online as part of an overall U.S. energy strategy that also includes developing traditional energy sources, regardless of opposition from the enviro-regulation litigation industry. But reality has to fit in that strategy somewhere, not just feel-good rhetoric.
John Hines, director of energy supply planning for NorthWestern, says before the company buys more wind, it wants to be sure it has the right mix of power to offset gaps when the wind doesn't blow. Right now, it's expensive and difficult to buy "firming power," which is needed to complement intermittent wind power - especially when NorthWestern has no power-generating plants of its own, Hines says.
A panel chaired by U.S. Sen. Max Baucus on Tuesday approved an energy-tax package designed to boost alternative energy production and conservation - partially at the expense of big oil-and-gas producers. "This is a significant victory in our efforts to become more energy independent," said Baucus, D-Mont., who chairs the Senate Finance Committee. "We have more to do to address climate change, lower gas prices at the pump and wean America off of foreign sources of energy." The Finance Committee approved the $28.5 billion, 10-year tax package, which is expected to become part of a larger energy bill before the U.S. Senate this week. The package includes tax credits to encourage production of wind power, solar power, gas-electric hybrid cars, biodiesel fuel and "cellulosic" ethanol, which is produced from agricultural waste products.
The Rahall plan may not be the final answer, but a gold-rush mentality that promotes such huge numbers of heavily-subsidized, industrial-scale wind farms with no controls on industry is not a good answer either. As a first-draft work-in-progress, Rahall's proposal might just be a step in the right direction.