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PSC commissioner questions cost to customers if power lines go through

As huge power line projects in Montana are being pitched as the catalyst for a new wave of wind power development, Public Service Commissioner Brad Molnar, R-Laurel, is asking whether these lines might end up harming Montana electricity consumers. Molnar has been traveling the state and writing newspaper columns, arguing that the lines could lead to higher rates for Montanans.

HELENA - As huge power line projects in Montana are being pitched as the catalyst for a new wave of wind power development, Public Service Commissioner Brad Molnar, R-Laurel, is asking whether these lines might end up harming Montana electricity consumers.

Molnar has been traveling the state and writing newspaper columns, arguing that the lines could lead to higher rates for Montanans. If they interconnect with existing power lines, power generator PPL Montana could more easily sell its cheap coal-fired and hydro electricity to California, Nevada or other high-priced markets, he says.

That could force NorthWestern Energy, which gets one-third of the power for its 330,000 customers from PPL, to pay a much higher price to replace that power when PPL contracts expire in 2014, Molnar argues.

"I'm concerned about one thing and one thing only: Open access to much larger markets will hurt the Montana ratepayer," Molnar says.

Power line developers, including NorthWestern, and others in the energy business, say it's possible PPL could use the new power lines to sell more of its power outside the state.

Yet interviews with more than a dozen utilities,... more [truncated due to possible copyright]  

HELENA - As huge power line projects in Montana are being pitched as the catalyst for a new wave of wind power development, Public Service Commissioner Brad Molnar, R-Laurel, is asking whether these lines might end up harming Montana electricity consumers.

Molnar has been traveling the state and writing newspaper columns, arguing that the lines could lead to higher rates for Montanans. If they interconnect with existing power lines, power generator PPL Montana could more easily sell its cheap coal-fired and hydro electricity to California, Nevada or other high-priced markets, he says.

That could force NorthWestern Energy, which gets one-third of the power for its 330,000 customers from PPL, to pay a much higher price to replace that power when PPL contracts expire in 2014, Molnar argues.

"I'm concerned about one thing and one thing only: Open access to much larger markets will hurt the Montana ratepayer," Molnar says.

Power line developers, including NorthWestern, and others in the energy business, say it's possible PPL could use the new power lines to sell more of its power outside the state.

Yet interviews with more than a dozen utilities, regulators, developers and other energy officials in the region indicate that any new power lines in Montana are just one of many factors that could affect electric ratepayers in Montana, or where PPL ends up selling its power after 2014.

Those factors include tough restrictions on accepting coal-fired power (which is PPL's main output), the high demand in the region for green power, the cost of transporting power and the ability of NorthWestern to develop its own power sources.

"Yes, theoretically, if there is a higher-priced market (PPL) can get to, that's a possibility for them," says Brian Silverstein, senior vice president for transmission services for the Bonneville Power Administration in Vancouver, Wash. "But there are all of these other factors to consider. ... It's very difficult to make a blanket statement that Montana prices will rise because of it."

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The key question raised by Molnar is: Where will NorthWestern get its power for customers after mid-2014, when the PPL contract expires? NorthWestern officials say they're working on a resource plan that will be unveiled in April (see related story).

PPL spokesman David Hoffman says while the company won't ignore chances to sell "excess power to markets we can access," it still prefers to sell its electricity in Montana, and would like to continue to sell some power to NorthWestern.

A review of state renewable-power laws in the region shows that coal-fired power produced by PPL at Colstrip is a tough sell outside the state, because utilities are focused primarily on buying "renewable" (green) power to meet those laws.

California and Washington essentially ban importation of coal-fired power to those states, and some state requirements for green power also exclude hydroelectric power from older dams, which is what PPL also produces. Power defined as renewable usually includes wind, geothermal, solar and small hydro projects.

California, Washington, Oregon, Nevada, Arizona, Colorado and Montana are requiring utilities to sell a minimum level of green power, by certain dates. In some states, the requirement exempts electric cooperatives or smaller municipal utilities.

As for the new power lines in Montana, their developers say they won't be built unless new projects - probably wind farms - agree to buy space on the lines. A bidding process known as "open season" will reveal who is interested in shipping power on the line.

"(Our) line doesn't get built unless there is a matching new source of power in Montana," says David Gates, vice president of wholesale operations for NorthWestern.

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At least four major power line projects to export electricity from Montana are on the drawing board:

•The Mountain States Transmission Intertie, proposed by NorthWestern Energy. The 430-mile, $1 billion line would start in Townsend and run south to near Twin Falls, Idaho.

•The Collector System, a NorthWestern project to transport power from future wind farms in Montana and to a central hub at the beginning of the MSTI line.

• The Chinook line, proposed by Alberta-based energy giant TransCanada. The $1 billion line would start near Harlowton and go south to Las Vegas, Nev.

•The Colstrip upgrade, which would increase by 30 percent the capacity of existing power lines from Colstrip into Washington state. Colstrip is the site of PPL's coal-fired power plants.

TransCanada already has held a bidding process for space on the Chinook line, and plans to reveal this year who's interested. PPL Montana was not one of the bidders, Hoffman said.

NorthWestern plans to hold bidding for the MSTI and Collectors System this spring, and should reveal the bidders in a report to the Federal Energy Regulatory Commission later this year, Gates says.

Hoffman says PPL Montana hasn't decided whether it will bid for space on the MSTI line, and is waiting for NorthWestern to respond to a PPL bid for space on a 2004 proposal to expand existing power line capacity from Montana into Idaho.

The Colstrip upgrade is proposed by NorthWestern, utilities in Oregon and Washington, and BPA, which say the extra capacity is for moving new wind power from Montana into the Pacific Northwest.

Molnar says it would be easy for PPL to ship more of its power along these lines to Washington and Oregon, when its current contracts with NorthWestern expire.

Hoffman and others say PPL already can sell at least some of its power to out-of-state sources, if it chooses.

"We've never really run into a congestion problem or inability to move it," he says. "I don't see how construction of these (new lines) really changes things a lot for us."

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But do buyers in the region even want the coal-fired power that PPL could sell? A half-dozen utilities in the region that spoke with the Missoulian State Bureau said they wouldn't rule it out. But they said they're much more focused on buying renewable power and developing their own resources, particularly green power.

"(We are) not currently planning to add new coal to our resource mix, until there is more certainty with regard to environmental issues and/or clean-coal technologies are commercially available at a competitive costs," said John Coggins, manager of resource planning for Salt River Project, a public power project serving 930,000 customers in the Phoenix area.

Molnar says he'd be satisfied if the power lines proposed by NorthWestern, TransCanada or anyone else did not intersect with the existing power-line network that is used to distribute PPL's power.

"If (the developers') goal is to ship several thousand megawatts of wind to the Southwest, you don't have to tie in to those lines," he says.

Molnar believes federal regulators can decide whether those connections should exist, and has persuaded several county commissions in Montana to write letters to FERC, asking it to take action to protect Montana ratepayers.

A spokeswoman for FERC in Washington, D.C., said last week the agency has jurisdiction over power line interconnections that involve new power sources, but not over general siting of power lines in Montana.

FERC has received the letters from the county commissions, but the case on MSTI has no pending action, said Barbara Connors. "I can't say what will happen to their letters."


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

JAN 31 2010
https://www.windaction.org/posts/24393-psc-commissioner-questions-cost-to-customers-if-power-lines-go-through
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