By Ian Lund
As Montana’s largest utility, NorthWestern Energy is responsible for providing reliable and affordable electricity to its customers, but once again, its recent antics around its Integrated Resource Plan (IRP) show that the utility is not operating in good faith, is thinking of customers as an ATM machine for its investors, and does not plan to enter the modern energy age for decades.
Every three years, NorthWestern Energy is supposed to file an IRP that outlines the utility’s plan to provide affordable electricity to meet customers’ energy needs for the next 20 years. NorthWestern typically hires a consulting group to model various scenarios – including resource acquisitions and retirements – to come up with potential resource combinations that would keep the lights on at the “least cost” to consumers. Historically, this utility has manipulated the modeling process to predetermine outcomes favorable to its own bottom line, generating profit for shareholders instead of prioritizing the best interests of its customers and the environment. This year is no different.
NorthWestern submitted a draft IRP in 2022 for stakeholders like MEIC to review and offer feedback. Our comments urged NorthWestern to amend its IRP to factor in reduced costs of renewable and storage technologies covered by the Inflation Reduction Act, reflect the increased costs of pipelines for methane gas plants, and address other model manipulations.
Ostensibly in response to stakeholder feedback, NorthWestern announced in December that it would delay filing its IRP until March 31, 2023. However, it quickly became clear that NorthWestern was buying time because it was closing a deal behind the scenes to double its share in the Colstrip coal-fired power plant. NorthWestern is inserting the new Colstrip plant capacity into its IRP as a “core assumption,” meaning it is not modeling how the new Colstrip addition compares to other more modern resources such as energy efficiency, demand response, renewable energy, renewables plus storage, standalone storage, methane gas, and small modular nuclear reactors. Instead of the Colstrip plant being transparently compared to these other resources on a cost-per-megawatt basis, NorthWestern just inserts the costs of the Colstrip plant in the rate base, ignoring the full costs of the acquisition to ratepayers (see article on Colstrip acquisition).
Acquiring a larger share of the Colstrip plant is crazy for a number of reasons, but most relevant to the IRP is simply a question of cost: a recent study from Energy Innovation showed that every single coal plant except one in the United States could be economically replaced by renewable generation plus storage. NorthWestern’s acquisition of a larger share of the Colstrip plant represents a step backwards in the transition to cleaner energy sources.
That’s not all NorthWestern changed in its IRP, though. The list of potential resources that NorthWestern presented last month is suspiciously shorter than what it shared in its December IRP. Although it included them in its 2022 draft IRP, NorthWestern excluded “hybrid resources, ” i.e. wind or solar paired with an energy storage system, from its February 2023 presentation, meaning that the model cannot select any renewables plus storage systems to recommend as least-cost options to build. This is withholding important information from consumers and regulators, and means that NorthWestern is intentionally excluding information that will help inform future decisions regarding what constitutes the least cost path for customers.
Luckily for Montanans, the public has the opportunity to participate in the decision-making process for NorthWestern’s energy future by attending and providing comments at public hearings hosted by the Public Service Commission (PSC). The PSC can identify deficiencies in the IRP and issue feedback to the utility. By showing up at PSC hearings and highlighting the problems with NorthWestern’s IRP, we can help stop NorthWestern from manipulating the process to enrich its executives and shareholders at customers’ expense.
This article was published in the March 2023 issue of Down To Earth.