Natural gas plant, battery storage: What’s next for NorthWestern Energy?
NorthWestern Energy submitted an application to the Montana Public Service Commission last week to build a new 175-megawatt natural gas plant and move forward with Montana’s first utility-scale battery project.
NorthWestern’s application asks for commission approval to recover $54 million for the natural gas plant in the supply rates paid by its 700,000-plus customers in Montana. The company argues that the natural gas plant it proposes is the best and cheapest option for a new high-capacity resource that could be online by January 2024.
The total cost of the plant, factoring in land, construction costs, property taxes and capitalized interest incurred during construction, is expected to top $286 million, and NorthWestern is seeking a 10% return on equity for the project, for an overall rate of return of 7%.
The company is also seeking to enter a 20-year agreement with Beartooth Energy Storage, LLC, for a 50-megawatt energy storage project near Billings. Beartooth would build and own the facility, and NorthWestern would control its charging and discharging functions.
The idea behind that project is to direct excess electrons on the grid to the battery when supply is high and demand and energy prices are down, and release electricity back onto transmission lines when demand surges and intermittent energy sources fall off. NorthWestern says this will keep the company from having to make more expensive market purchases for energy.
The company argues the acquisitions are in the public’s best interest because they’ll provide customers with reliable, cost-effective service and protect them from risks associated with volatility and unreliable service when demand for energy peaks. It says the portfolio it landed on through this process is the “least risk, most diverse, and most flexible option at a cost-effective price in comparison to the other evaluated portfolios.”