BUTTE, Mont., April 10, 2020 /PRNewswire/ -- NorthWestern
Energy notified the Montana Public Service Commission today that
Talen Energy has purported to exercise its right under the Colstrip
Ownership and Operation agreement to acquire a portion of the
transaction that was negotiated between Puget Sound Energy and NWE.
This concerns Puget's proposed sale of its 185 megawatt interest in
Colstrip Unit 4.
If Talen Energy is able to purchase a portion of Puget's Unit 4
interest, it means NorthWestern Energy would acquire at a minimum
half of Puget Sound Energy's interest in Colstrip Unit 4, 92.5
megawatts instead of 185 megawatts, half of all the costs, and the
purchase price is now $0.50. The
Power Purchase Agreement with Puget Sound Energy would be for 45
megawatts of energy, not 90 megawatts, for about five years.
NorthWestern Energy will file a supplement to our original
application for approval of the acquisition with the Montana Public
Service Commission by the end of April, with a supplement to the
revenue requirement and analyses of the costs of alternatives,
power purchase agreement revenue, and the offset in the Power Costs
and Credits Adjustment Mechanism. The benefits for
NorthWestern Energy and its customers are still very
compelling.
This development does not change the general structure of
NorthWestern Energy's proposal and we expect the Montana Public
Service Commission to proceed with the application docket schedule.
The acquisition must be complete by the end of December because if
it is not, either party can withdraw from the agreement.
Purchasing more of Colstrip Unit 4 for one dollar or less is by far the most affordable
way to help close the gap in the capacity shortage facing our
Montana customers. No other option
– buying additional energy from the market or building a plant that
would generate more than 90 megawatts of energy over multiple days
when it is needed the most - can achieve the same results.
"NorthWestern Energy and Puget Sound Energy negotiated and
reached an agreement with good outcomes for both companies'
customers," said NorthWestern Energy Vice President Energy Supply
and Montana Government Relations John Hines. "Unfortunately at the
end of all that hard work by NorthWestern Energy and Puget Sound
Energy half of the value that would have gone to Montanans may be
taken by an independent power producer.
"Obviously this transaction has tremendous benefit to Puget and
NWE and Talen Energy is insisting on being part of this value."
The revenue for a reserve fund to be used for environmental
compliance, remediation and decommissioning costs of NorthWestern
Energy's existing share of Colstrip Unit 4 would also be cut in
half. NorthWestern Energy is asking the Montana Public Service
commission to approve a tariff change that will earmark proceeds
from the power purchase agreement with Puget Sound Energy and
savings from avoided market purchases of energy for that reserve
fund.
"Colstrip Unit 4 provides critically needed capacity at the most
affordable rate for NorthWestern Energy's customers," Hines said.
"This acquisition, which does not result in a rate increase, is an
effort by NorthWestern Energy to continue this generation asset's
viability as we pursue a reasonable transition to different energy
portfolio, a transition that preserves energy reliability at
affordable prices for all of our customers.
"With Talen Energy asserting its right of first refusal to enter
this agreement, we expect them to be our long-term partner in
Colstrip Unit 4. That is what is right for Montanans and anything
less would be a disservice."
Follow us on Facebook or on Twitter (@NWEinfo).
About NorthWestern Energy (NYSE: NWE)
NorthWestern provides electricity and / or natural gas to
approximately 734,800 customers in Montana, South
Dakota, and Nebraska. We
have generated and distributed electricity in South Dakota and distributed natural gas in
South Dakota and Nebraska since 1923 and have generated and
distributed electricity and distributed natural gas in Montana since 2002. More information on
NorthWestern is available on the company's website at
www.northwesternenergy.com.
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SOURCE NorthWestern Energy
