by Nick Fitzmaurice
A version of this article originally ran as an op-ed in news publications across the state.
In early January, the Northwest faced extremely cold temperatures. With seasonal extremes come peaks in energy demand as heaters work harder to keep homes and businesses safe and warm. NorthWestern Energy, Montana’s primary electricity supplier, attempted to address this peak demand with a news release and pandering media coverage. However, there is more to the story.
NorthWestern once again twisted the facts to the public, using this cold weather event to claim that Montana needs expensive coal and methane thermal resources for extreme conditions like these. This is far from the truth. In fact, coal and methane generation sources are the true Achilles’ heel of reliability in extreme cold. As the cold front descended on Montana, one of the Colstrip plant’s two units went down on Sunday, Jan. 7, not coming fully back online until early Saturday, Jan. 13, when the higher demand for energy was already upon us. Temperatures dropped below freezing on Jan. 10 and did not reach above-freezing levels again until Jan. 21, remaining in the deep negatives for several days between Jan. 11 and 15. Based on NorthWestern’s own forecasts, it knew well in advance that more power would be needed starting Jan. 10.
Methane gas has proven no more reliable than coal. NorthWestern constantly claims that more gas generation is necessary to provide power during these extreme weather events. However, instead of operating at full capacity during these peak times, the data show that during the two most recent cold snaps, NorthWestern’s gas plants significantly underperformed. This is not uncommon for gas plants during extreme weather events. On Jan. 9, the Union of Concerned Scientists published “Gas Malfunction: Calling into Question the Reliability of Gas Power Plants,” a report which highlighted reliability challenges for methane gas in extreme conditions. Methane gas’ unreliability was the main cause of the 2021 rolling blackout in Texas as Winter Storm Uri knocked out most of the gas generation backups on the system. Last year’s Winter Storm Elliott brought rolling blackouts to the East Coast, where gas plants made up the majority of power plant outages. The concerns of the report were again confirmed in the January event when Washington State faced a methane gas shortage as a major storage facility was forced to shut down during the winter storm.
NorthWestern has been sounding the alarm on a capacity shortage in Montana, using this claim to justify construction of the expensive Yellowstone County Generating Station methane plant and its impending acquisition of more of the Colstrip plant, which will drive rates up even further. However, the availability of “24/7 on-demand generation” from coal and methane plants is a well-documented myth. Perpetuating that myth puts money into NorthWestern shareholders’ pockets as ratepayers foot the bill for the utility’s risky investments and pay ever-increasing rates (such as the 28% rate increase NorthWestern was just granted).
We stumbled through this winter storm, and luckily our lights and heat stayed on. But customers need more than luck. Customers need a robust, reliable, and affordable energy system.
If we want to ensure reliable electricity in Montana, particularly in the most extreme conditions, we must look to renewables and bolster Montana’s transmission network as part of a more advanced grid management system that allows utilities to optimally and cost-effectively share power across the West. Winds soared as the cold front rolled in on Wednesday, exceeding coal and gas generation that day to meet nearly half of NorthWestern’s electricity demand with excess generation to export. Paired with short- and long-term storage, excess generation could be captured and dispatched once winds die down. Demand-side management can also be deployed to shift non-essential energy consumption away from peak periods, further reducing the strain put on the grid by these extreme weather events.
Montana’s abundant and cost-effective wind resource can be harnessed to meet energy demands both within the state and across the West. During this cold weather event, NorthWestern indicated the volatility of prices on the energy market, but the utility will soon have more market options to keep prices down. NorthWestern is currently a part of the Western Energy Imbalance Market, a regional energy market that allows utilities to purchase electricity to meet demand in real time (traded up to an hour ahead). It was because of its participation in this market that NorthWestern was able to buy out-of-state power during this cold weather event, keeping the lights on in Montana with mostly solar electricity from the Southwest. Real-time regional transactions can be clunky and challenging to optimize, particularly when entire regions face temperature extremes, but NorthWestern will soon have the opportunity to join the Energy Day Ahead Market (EDAM), a regional market that enables more optimal power trading based on forecasts from a day in advance. Joining EDAM would significantly grow NorthWestern’s geographic diversity of resources to draw upon. By locking in transactions a day in advance, generation resources can be more optimally dispatched across a region to meet demand in these extreme conditions, stabilizing prices while allowing real-time markets to account for small discrepancies in demand.
A more formally organized Regional Transmission Organization (RTO) would be the final market evolution in the West, designed and overseen by the states it encompasses to most optimally and cost-effectively coordinate power generation, transmission planning, and power sharing. Power is already traded across state lines, but the current system is clunky and inefficient, leading to exorbitant short-term energy prices during high-demand periods that are often misconstrued by NorthWestern as a reason to build more expensive generation infrastructure in Montana. These prices really indicate the need for more advanced market systems, such as the impending EDAM and eventual full-scale RTO.
Renewable wind and solar energy are variable by nature, but this does not mean they are not reliable. We must rethink how we manage our electricity grid to capture these low-cost, abundant resources and utilize them when they are needed. NorthWestern is behind the times, and its focus on expensive, unreliable gas and coal resources is woefully inadequate and misguided. We need our utility to pull its head out of the sand and start thinking seriously about the future of energy in Montana.
This article was published in the March 2024 issue of Down To Earth.
