Friday, April 12, 2024

NorthWestern Energy plans protect Montana customers

by By RICHARD DUNBAR Phillips Co. Commissioner
| March 1, 2024 7:00 AM

Over the last several weeks we’ve seen a number of articles—both editorial and from news reporters—that lay blame for the need to purchase electricity on the open market at the feet of NorthWestern Energy and their recent efforts to expand their portfolio to include more reliable energy from coal and natural gas.

In no uncertain terms, the litany of articles published since the beginning of the year have accused NorthWestern of poor planning, of not acting in the best interest of their customers and of intentionally increasing their prices.

These accusations couldn’t be further from the truth.

Anyone who takes more than a cursory look at the steps NorthWestern has made over the last several years to diversify their portfolio and ensure supply reliability can easily see that not only have they been acting in the best interests of their customers, but they have been going above and beyond in their attempts to maintain a true all-of-the-above energy portfolio that Montanans can rely upon, come rain, shine, or in the most recent case, -40°F.

The frigid temperatures our state endured just a few short weeks ago resulted in record demands on our electric grid and natural gas system in every corner of our state — forcing NorthWestern to import power for 178 hours despite their diverse existing resources, long-term energy contracts and their use of hedging.

And while some have decried that the company should have “hedged more effectively” or “known winter weather was coming” the truth of the matter is that the need to import electricity from out of state was not created by any negligence or deficiency on the part of NorthWestern. 

The need to purchase power on the open market was created by the federal agencies, out-of-state regulators and judges whose decisions have slowly but surely turned Montana from an energy exporter to an energy importer by pushing out Montana’s reliable energy producers and replacing them with energy sources that lack the same level of scalability and affordability.

As a result, when periods of high demand strike, hedging alone cannot solve the problem of supply availability and the volatility of resources like wind and solar.

To their credit, NorthWestern realized the best hedge against high market prices is to avoid going to the market in the first place, and they began taking steps years ago to mitigate the need to buy out-of-state power on the open market by producing more reliable, base-load energy here in Montana.

NorthWestern’s continued efforts to include coal and natural gas in their energy portfolio not only directly helps consumers—their investments also provide critical revenue to local governments, helping to pay for local services like public safety, road and bridge maintenance, and much more.

Two shining examples of their commitment to consumers and local communities are the company’s planned 175-megawatt Yellowstone County Generating Station and their increased investment in the Colstrip Generating Station. 

During Montana’s most recent period of arctic cold, the anticipated additional capacity from the Yellowstone Generating Station alone could have saved Montana customers approximately $14 million. And yet the most vocal critics of NorthWestern’s purchase of power on the open market are also those who have campaigned the hardest to shut down coal and natural gas generation in the west.

So perhaps instead of playing the blame-game, those criticizing NorthWestern should take a closer look at the reason they are being forced into buying power on the open market in the first place, and give credit where credit is due—because at the end of the day, the critics of NorthWestern’s all-of-the-above energy strategy are the ones directly responsible for everyone paying more for power.

Richard Dunbar is a Phillips County Commissioner and President of the Montana Association of Oil, Gas, and Coal counties.