NorthWestern Energy to Provide Power from Colstrip to Montana
Missoula, MT (KGVO-AM News) - It was announced on Monday that NorthWestern Energy and Avista in Washington State have agreed to provide Montana customers with on-demand power while allowing Avista to comply with the laws of Washington State by giving up its ownership of Colstrip Units 3 and 4.
KGVO News spoke to NorthWestern Energy Public Relations Officer JoDee Black on Tuesday about the transaction that will take place three years from now.
The Agreement won't go into Effect until 2026
“The agreement is for NorthWestern Energy to take ownership of Avista’s share in the Colstrip Power plant that will happen on January 1, 2026,” began Black. “NorthWestern Energy already has an existing share of the Colstrip plant which serves our Montana customers with the generation that's available 24/7 on demand when we need it the most.”
As to how important this transaction will prove to be for Montana consumers, Black pointed out just how much more we all had to pay for energy during the recent cold snap in December.
JeDee Black Explained how much Power NorthWestern Energy had to buy in December
“Right before Christmas, we experienced some record low temperatures for multiple days in Montana,” she said. Colstrip, along with our natural gas generation in the state and our hydro generation is what kept the lights on in Montana that week. We didn't have at the time during that extreme cold any generation from our renewables, our solar and considerable wind resources in the state, and we ended up purchasing and importing about 41 percent of the energy needed to serve our customers in Montana during that cold spell from out of state power producers.”
Black said to build a plant from scratch at today’s prices, the cost would be prohibitive.
“If a new plant capable of this type of on-demand 24/7 generation were to be built, it would cost up to $500 million,” she said. “We're acquiring this existing plant that already is running located in Montana on our Montana grid for no purchase price.”
Asked about the potential positive impact on Montana energy consumers once the Colstrip Units 3 and 4 will be available to send power to Montana, Black provided these numbers.
With Colstrip 3 and 4 the Benefits will be Between $25 and $45 Million a year
“Once it is under our ownership, we anticipate our customers in Montana will have a benefit of between $25 million to $45 million a year in avoided purchases from the energy market. To put that into context, in December, the cost of market energy was more than eight times higher than the cost of power from NorthWestern Energy's current share of the Colstrip plant which saved our Montana customers about $10 million in December from avoided energy market purchases.”
Avista will retain its obligation for its portion of environmental and decommissioning costs associated with the future closure of the plant.
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