Montana: Coal bid, transmission and efficiency/renewables goals make news

Here’s some recent energy updates from Montana, submitted by NW Energy Coalition Montana caucus chair Chuck Magraw.

Otter Creek

Arch Coal has committed to paying 15 cents per ton as a bonus bid for the state’s coal tracts at Otter Creek, meaning that the state will receive $86 million in upfront payment for giving Arch the right to develop this coal. The state will receive additional royalty payments should that coal actually be developed.

NorthWestern Energy

A recent consultant analysis finds that NorthWestern (NEW) has only about 80 average megawatts (aMW) of cost-effective and “available” energy efficiency on its system — less than some of us expected. NWE proposes to continue to acquire this at a rate of 5 aMW per year.

NWE says it is committed to proposing a decoupling mechanism. A stakeholder group has been talking about a version similar to the Idaho Power Co. mechanism. Rather than an incentive tied to performance, NWE seems more interested in getting an enhanced rate of return on its investments.

NWE has made it clear it will only bring only the amount of renewables required by Montana’s renewable energy standard.  The utility remains anxious about the supply and affordability of balancing services.

The utility recently held Informational meetings on its Mountain States Transmission Intertie (MSTI) line and its proposed collector system. NWE sees this project as a business opportunity. Many fear the MSTI will expose Montana consumers to high out-of-state energy markets and that existing NWE customers will subsidize the line but receive no commensurate benefits. Siting is also a concern.

More transmission

Several other transmission projects are in play:

  • Gael, Invenergy and Montana Alberta Tie Ltd. (MATL) builder Tonbridge are trying to extend the MATL line to interconnect with the BPA system.
  • Grasslands is proposing a feeder system similar to NWE’s collector system but larger and extending further east and north (into Canada), combined with a storage project
  • An upgrade to the Colstrip line.