Article published Oct 2, 2007

City utility falls short of its goal

By RICHARD ECKE

Tribune Staff Writer

Electric City Power has several new electricity customers, but the city's electric utility arm fell short of its goal to sell between 50 and 65 megawatts of power contracts, according to city figures released Monday.

The city estimated the city now has 29.5 megawatts worth of customers at peak power use, up from the 25 megawatts of peak power it had before adding new customers.

City fiscal officer Coleen Balzarini did not express disappointment Monday that the city missed its goal of at least 50 MW.

"It is what it is," Balzarini said. She said the latest batch of agreements are "very good contracts that will serve us well when we go out to the market."

She said city officials were "busy signing contracts all the way through 7:30 last night (Sunday)."

The city hopes to hold a 15 percent share of the proposed Highwood Generating Station coal-fired power plant. Five Montana rural electric cooperatives have requested a loan of more than $600 million from the federal Rural Utilities Service for their share of the plant.

Great Falls officials will need to get private financing for their share by convincing investors to buy bonds to support the enterprise.

"Our goal was to get up to somewhere between 50 and 65 megawatts," Balzarini pointed out.

However, "that isn't the minimum amount required to participate in financing," City Manager John Lawton said at an informal meeting of the Electric City Power board Monday. Lawton said the amount needed for financing was estimated to be "in the 35 MW range," and "we believe with 30 MW we can participate in financing."

Lawton said the roughly 30 MW worth of contracts the city obtained "represents about a fourth of Great Falls' total load." He said the amount was "not huge." He called it "small but it's significant."

The city took criticism from power plant opponent Ron Gessaman before Monday's meeting for the number of contracts that had been signed.

"That's not very many," Gessaman said. "That's a long ways from 65 (MW)."

Power Board member George Golie asked whether the largest utility serving Montana, NorthWestern Energy, could buy 20 MW of electricity from Electric City Power if it was available. Balzarini said yes, if the utility received approval from state regulators to do so.

For the time being, the city buys electricity through a cooperative from PPL Montana, then sells it to various government and business customers. Later on, according to plans, the city would own a share of the power from the coal-fired plant, if it is built.

As for not reaching the goal, Balzarini said the city has been talking to "one very large customer" that by itself could bring the city up to the 50 MW threshold. She said the city also has a few potential customers who would use more than 5 megawatts of power each.

"We can still take on 5 MW customers and above," Balzarini pointed out.

Balzarini, who is executive director of Electric City Power, added the city is regularly contacted by businesses that would have large electricity needs and that would be interested in locating in Great Falls.

Electric City Power's total estimated peak megawattage listed Monday included two current customers pondering long-term contracts, Benefis Healthcare and Meadow Gold Dairy, and the Montana Refining Co., an existing customer that uses 5 MW of power alone. Montana Refining has committed to a contract, but final details have not been completed, she said.

Customers who use less than 5 MW of electricity were supposed to decide by Sunday whether to buy power from an independent group like Electric City Power or go with the default supplier, South Dakota-based utility NorthWestern Energy.

New customers announced by the city since last week included Lumber Yard Supply, Davidson Investment Partnership statewide, McLaughlin Research Institute and Pacific Steel statewide. Balzarini said their combined peak load amounted to about 2.5 MW.