Article published Aug 17, 2007

Helena not likely to accept power offer

By RICHARD ECKE

Tribune Staff Writer

Efforts by Great Falls officials to sell electricity to the city of Helena might have failed this week.

At a work-session meeting Wednesday in Helena, opponents of the deal complained that the source of power would be a coal-fired power plant, and there was too little time to make a thought-out decision. Helena commissioners were skeptical as well.

The city of Great Falls' utility arm, Electric City Power, must lock in most of its electricity customers by Oct. 1, under a new state law that partially reregulates the state's energy industry.

Great Falls City Manager John Lawton said Thursday that the city used a "soft-sell" approach with Helena. Helena's city commissioners didn't turn down Electric City Power outright, but they might formally reject the plan as early as Monday.

"We're doing OK," Lawton said. "We're going to sell enough contracts to meet our goals anyway."

Coleen Balzarini, city of Great Falls fiscal officer, said the goal is to sign up customers to 30-year contracts totaling 50 to 60 megawatts of power. A contract would run from 2012, when the proposed coal-fired Highwood Generating Station is projected to go online, and run through 2042.

The city wants to own 15 percent of the Highwood plant, meaning its share will be about 35 megawatts. Because customers use power at different times and rates, the city will be able to sell power beyond that amount, Balzarini said. She added that customers are being offered contracts on a cost-plus basis, rather than at a set price.

In Helena, Lawton argued the contract would give the capital city stable power rates, but officials were cautious.

"Environmentally, I have no intention of hitching our wagons to 'clean coal,'" said Alan Peura, Helena city commissioner.

Commissioner Bob Throssell added that reducing NorthWestern Energy's business by buying power from Great Falls could hurt Helena consumers.

"There is no relationship between volume and price in electricity," Lawton said later, adding that is "a common belief."

Plant supporters say the Great Falls facility would be one of the cleanest coal-fired power plants in the country.

Highwood opponents were buoyed by the negative reaction in Helena.

"I think the city of Helena made a wise choice at this point," said Kathleen Gessaman of Great Falls, a critic of the coal plant.

Despite the apparent rebuff, Electric City Power has customers signed up for 30 megawatts of short-term power. Those power customers have the option to sign 30-year contracts, Balzarini said. She added the long-term contracts will allow customers an "out" if the proposed power plant is not built.

A number of potential new customers have been contacted, and many gave positive responses, she said.

The Great Falls City Commission is expected to formally agree to buy power from Electric City Power, and the Highwood plant, at a commission meeting Tuesday. Balzarini said the city will be the first to formally sign a long-term contract.