Notes from the Field

Forward Montana Foundation’s Public Comment on NorthWestern Energy’s Procurement Plan

May 8, 2019

As a state-wide organization focused on empowering young Montanans, Forward Montana spends a lot of time thinking about how best to meet the challenges young people face in our state. Among the biggest challenges our generation increasingly has to contend with are climate change and economic stability. As we graduate high school and college and begin to build our lives, climate change is creating an increasingly chaotic backdrop. It is also becoming more difficult to access good-paying jobs and find affordable prices for housing and other basic necessities.

We recognize that providing reliable power to ratepayers is a challenging task as well. In moving forward, we urge you to seriously investigate a path forward that meets both the challenge of providing low-cost, reliable energy to customers and the challenge of rapidly scaling back our state’s dependence on fossil fuels in the next 10-12 years. We see the latter goal as an essential stepping stone for reaching the former.

Given the scientific consensus on climate change, the economic and social consequences detailed in the conclusions of the 2018 IPCC Special Report and the Fourth National Climate Assessment, and the likelihood of new state and federal regulation of greenhouse gases, it is very difficult to imagine that climate change will not have a significant effect on NorthWestern Energy’s ability to “provide adequate and reliable electricity supply service at the lowest long-term total cost,” as required by MCA 69-8-419.

We strongly urge you to look for creative paths forward that prioritize both the goal of providing low-cost energy to ratepayers and the goal of sourcing from new and existing renewable energy infrastructure in place of further investments in coal or natural gas. We hope you will rise to this challenge with creativity, foresight, and with full assessment of how other utilities have approached the challenge of meeting peak load in light of climate change.

After looking over your draft resource procurement plan, we have several bigger-picture questions we’d like to highlight:

  1. As a company, what is your position on addressing climate change? Would you be willing to make a public statement addressing the science of climate change?
  2. How do you plan to work with community groups and Montana cities, like Missoula, that are aiming to transition to 100% clean electricity in the next 10-20 years?
  3. Have you assessed other utilities’ approaches to limiting greenhouse gas emissions and setting target dates for reaching 100% clean energy?
  4. Have you done any analysis on the impact of climate-motivated legislation on existing and recent coal and natural gas resources? Have you assessed the likelihood that new natural gas plants would become stranded assets?
  5. Do you plan on reaching out to existing hydropower sources and existing storage facilities like Gordon Butte to meet any shortfalls in energy?
  6. The authors of the plan state that battery storage is cost prohibitive. Over what time horizon are you calculating this cost? What particular battery storage options have you considered? Have you considered the long-term cost of “bridging” with various existing resources while waiting for battery storage prices to further decline? How does the cost of purchasing battery storage technology at current prices compare with the long-term cost of Colstrip, including cleanup costs?
  7. What is your assessment of how much capacity new power plants will add to the regional energy supply?
  8. The term “cost” is used repeatedly in the plan but never explained. Please explain how you are calculating lowest cost: over what time horizon and for whom?
  9. When you conclude that “thermal resources provide the best value (lowest cost) to meet our customers’ future needs for peak capacity”  on page 1-12, are you considering the ecological cost of natural gas production or the social and ecological cost of greenhouse gas emissions? Have you done any assessment of the externalized costs of various resources?
  10. Why was Northwestern Energy looking to invest in a larger share of Colstrip this legislative session, and how does that align with the intention to supply energy at a low cost to ratepayers? How do efforts to pass SB 331 relate to this resource supply planning process?
  11. How do efforts to create a new customer class for rooftop solar customers relate to this resource supply planning process? How would this change impact NorthWestern Energy’s ability to meet peak load at lowest cost?

 

We have several more specific clarifying questions as well:

  1. When you conclude on page 1-13 that “[m]eeting our customers’ future needs by adding carbon free resources is projected to cost $523,000,000 more than meeting their needs using natural gas fired resources,” which specific projections are you referencing?
  2. In addressing the statutory requirements of the planning process (as indicated on page 2-1), have you:
    1. calculated the “long-term total cost” of various resource options, including projections of which assets might become stranded, potential cleanup costs, and externalized social and ecological costs?
    2. considered any new “demand side management options” to help reduce peak load? Which new options have you considered, if so?
    3. considered how climate impacts, like more severe wildfire seasons, might damage infrastructure like poles and wires, and how NorthWestern Energy might manage and mitigate those risks?
    4. considered the potential costs of procuring a large range of existing and new solar, in combination with and separate from battery storage, for the sake of evaluating the “full range of cost effective electricity supply… management options”?
  3. What is the reasoning for limiting resource additions to “about 200 mW per year” in the ARS analysis (pg 10-3)?
  4. When you state on page 10-14 that the “ARS analysis in this Plan generally selects natural gas fired thermal generation,” what exactly are you referring to? As the lowest cost option? Over what time horizon? With what constraints? As opposed to which alternatives, considered in which combination?
  5. On page 1-9 and 1-10, you state: “Another concern is that if no additional generation is built to justify keeping the current Colstrip transmission lines, those lines could also be retired…” How significant is this concern, and what are the options for keeping the transmission lines open?