Spion Kop Wind Project in Montana

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Montana near West Yellowstone
(cc) csbarnhill

NorthWestern Energy is asking the Montana Public Service Commission (MPSC) for approval to purchase and operate the yet to be developed Spion Kop Wind Project located in Central Montana.

NorthWestern announced its intent to purchase the 40 megawatt project in April. If approved by the MPSC, the proposed $86.1 million project is to be developed by Compass Wind and placed into utility rate-base for NorthWestern’s Montana electric retail customers. Both the energy and associated renewable energy credits will be used to meet the renewable portfolio standards obligations in Montana law.

“The Spion Kop Wind Project is a valuable, cost-effective addition to the utility’s rate-base that is consistent with our most recent electricity supply resource plans,” said John Hines, vice president – supply. “The project helps NorthWestern maintain a balanced, environmentally responsible portfolio of generation resources that enhances rate stability for customers over the long-term and positively contributes to the economic base of Judith Basin County and Montana.”

For comparison purposes the Project represents a levelized price of $53.78 per megawatt hour (MWh) for a 25-year period, which was the lowest competitive bid price offered through a recent competitive solicitation process undertaken by NorthWestern and is significantly less than the current Qualifying Facility rate for a project with similar attributes of $69.21/MWh.

If the MPSC fails to grant approval for the Project on or before April 1, 2012, then either party may terminate this agreement. Construction would commence upon a favorable ruling, with commercial operation projected to begin by the end of 2012.

NorthWestern Energy provides electricity and natural gas in the Upper Midwest and Northwest, serving approximately 665,000 customers in Montana, South Dakota and Nebraska. More information on NorthWestern Energy is available on the Company’s Web site at www.northwesternenergy.com.

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