Article published May 10, 2007

Electric City Power hooks potential customers

By RICHARD ECKE

Tribune Staff Writer

Electric City Power has several prospects for electrical customers, but it's also preparing to shell out more money to the city's marketing consultants.

Two customers that use about four megawatts each are interested in signing up with Electric City Power, the city of Great Falls' electric utility arm, said Coleen Balzarini, executive director of Electric City Power.

At a board meeting of Electric City Power on Monday, Balzarini said the two potential customers "are definitely interested."

She added there's another potential customer that would use about 20 MW of power.

"That's a third of your portfolio," noted Bob Pancich, power board chairman.

At the same time, consulting fees to the R.W. Beck firm are continuing to grow, Balzarini reported. The firm did a feasibility study of the proposed coal-fired power plant east of Great Falls, and is now in a second phase to help the city market power from the coal plant to potential customers. Beck representatives also are available to fly in for special meetings with customers, and they will help the city in additional phases of work, she said.

"The total cost could be up to $400,000," Balzarini said. She noted that the City Commission has authorized $181,500 in spending so far. Balzarini said the commission already has agreed to spend up to $2 million for power plant preparations, and the money for Beck would come out of that amount. She said the city would be reimbursed for its costs if the coal-fired Highwood Generating Station is built.

If the plant is not built, Electric City Power could raise its charges to customers to recoup the city's spending, Balzarini said. If that approach did not cover all the costs, the city could dip into economic development revolving funds, she said.

The city would have dibs on about 65 MW of power from the power plant, which is scheduled to come online in 2011, at the earliest. Current Electric City Power customers, which are mostly government agencies, use 25 MW of power.

The city is trying to find customers for the full 65 MW, although Balzarini said not every customer would be using full power at all times of the day. She said Electric City Power needs to decide whether to sign up customers totaling as much as 100 MW or 125 MW of usage, knowing that not all customers would use the power at once.

In addition, Balzarini said some customers may be interested in signing up for more green energy, such as wind power. She added that Electric City Power should consider making such an offering.

Until the power plant comes online, the city is buying power through Southern Montana Electric Generation & Transmission Cooperative, which in turn buys the power for Great Falls from PPL Montana.

Balzarini said the electricity going to Electric City Power comes from a coal-fired power plant, even though PPL Montana owns a handful of dams in Cascade County.

Officials in Great Falls are waiting to see whether Montana Gov. Brian Schweitzer signs House Bill 25, which is legislation that would partly re-regulate the state's energy industry. The legislation sets a deadline of Oct. 1 for groups, such as Electric City Power, to sign up customers who use less than five megawatts of electricity.

"It's just after that that we're limited to the five-megawatt customers," Balzarini said. Montana Refining Co., a Great Falls oil refinery, uses about five megawatts of power.

City officials have noted they could reduce their 25 percent share in the power plant if Electric City Power does not sign up a full slate of customers.

Also at the session, board members decided to wait until their June 4 meeting to decide whether to endorse proposed power rate changes for existing Electric City Power customers.

Dawn Willey, a board member and facilities manager at Benefis Healthcare, said the appeal of Electric City Power is predictability.

"You can budget for it," she said. Benefis is an Electric City Power customer.

In other business:

Neil J. Taylor of Great Falls asked the board to approve a resolution promising city taxpayers will not be held responsible for the costs of promoting the power plant. No immediate action was taken.

Ken Thornton of Great Falls warned that the costs of sequestering carbon dioxide from the power plant would probably amount to about $30 per megawatt.

"For this plant, it would be at least $300 million," Thornton estimated. "That puts you at about $80 a megawatt." Current default electricity prices in Montana stand at about $55 per megawatt.