BillingGazette

 

Published on Monday, February 02, 2009.

Last modified on 2/2/2009 at 10:32 am

Highwood coal plant dropped for natural gas/wind

 

BY JAN FALSTAD

Of The Gazette Staff

Rural electric cooperative leaders building the troubled Highwood Generating coal-fired plant under construction near Great Falls have done a complete reversal.

 

Plant developer Tim Gregori said this morning that he was abandoning the controversial coal plant and would build a natural gas-fired plant and a wind farm instead.

 

Gregori said that due to an "aura of uncertainly," the coal-fired plant "just simply cannot be accomplished."

 

Gregori is chief executive of the Southern Montana Electric Generation and Transmission Cooperative, which is made up of a handful of rural electric cooperatives in south-central Montana.

 

During an interview with Dave Rye on KBLG NewsTalk 910, Gregori blamed environmental lawsuits, a lack of ready-to-use technology to produce clean coal, and an absence of clarity on national coal policy.

 

"At this time, we'd just like to move forward with what we can get built," Gregori said, adding that coal remains his first choice for producing cheap electricity, but that would have to wait.

 

Fergus Electric, Mid-Yellowstone Electric, Tongue River Electric and Beartooth Electric are members of Southern Montana and a sister company with an almost identical name, SME Electric Generation and Transmission Cooperative.

 

These rural electric cooperatives have spent $40 million on the Highwood coal effort over the last five or six years, Gregori said.

 

Another member, Yellowstone Valley Electric Cooperative of Huntley, said that the pending costs of the plant have nearly doubled from $456 million to nearly $900 million. Yellowstone Valley was part of this effort to build a coal plant near Great Falls until it tried to withdraw last spring, citing its rising costs and other issues. In December, Yellowstone Valley filed a lawsuit against the other cooperatives and Southern Montana G&T over the Highwood effort.

 

The costs of the natural gas plant and wind farm will be in addition to costs to day for the coal-fired plant, Gregori said, which weren't immediately stated. He said the simple-cycle combustible natural gas facility could be build in 24 months, with another year needed to make the plant more efficient and more time to build the wind farm.

 

Some 50,000 rural electric cooperative customers in Montana who were going to use the power from the Highwood coal plant will be paying $30 per month for the next 35 years for the project costs so far, Gregori said

 

"That's significant," he said.