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Published on Saturday, May 23, 2009.
Last modified on 5/23/2009 at 12:27 am

Co-ops carefully study plan for gas-fired plant

By LINDA HALSTEAD-ACHARYA
Of The Gazette Staff

With construction of its coal-fired Highwood Generating Station on hold, a group of south-central Montana electric cooperatives continues to analyze whether to move forward with a gas-fired plant instead.

 

Tim Gregori, CEO and general manager of SME, the group of cooperatives involved in the Highwood project, said the decision to pursue the gas-fired project will be dictated more by results than timeframe.

 

"Although time is a consideration," he said, "it is not the primary driving issue. We want to make sure we complete a thorough analysis before any formal decision is made."

 

In mid-May, however, promoters received encouraging news in the form of a preliminary bond rating. John Prinkki, vice president of SME, said the rating was "favorable" and "investment grade."

 

Incomplete application

SME also awaits approval of an air quality permit for the proposed gas-fired plant. The application, submitted to the Department of Environmental Quality in late April, was deemed incomplete by the DEQ earlier this week. The department asked for, among other things, additional information on formulas and assumptions used in calculating emissions.

 

Brent Lignell, DEQ environmental engineer, said the points needing clarification might seem minor. But collectively, they complicated the department's ability to review the project, he said.

 

SME has until July 20 to complete and resubmit the application. The DEQ will then have another 30 days to determine if additional data is needed. Barring additional issues, a draft permit could be issued within 40 days, Lignell said.

 

Power plant need

When asked about the need for a new power plant, in light of SME's 10-year contract for electricity from PPL Montana, Gregori said projections of load requirements are constantly being weighed against available resources.

 

He said he was heartened to see NorthWestern Energy's proposed gas-fired plant in Anaconda receive approval from the Public Service Commission. The federal government, state government and the PSC are all looking favorably on putting new generation in place, he said.

 

"That, to me, is a positive sign," he said.

 

As SME assesses generation opportunities, at least one of its member cooperatives grapples with rising costs. Beartooth Electric Co-op announced that rates for its 390 Wyoming members would increase by 33 percent effective May 20. Ron Roodell, manager of BEC, said it will be early July, however, before customers see that increase reflected in their bills.

 

The increase was requested in an effort to bring Wyoming rates up to par with Montana rates. However, the Wyoming customers were spared the additional surcharge associated with Highwood because the Wyoming Public Service Commission ruled that the project does not presently meet the "used and useful" requirement of Wyoming state statute.

 

Roodell said the surcharge billed to Montana members is reassessed monthly.

 

"When it started out, it was too much for our customers to bear," he said. "We found a way to back off. But if we get long-term financing, the surcharge will go away."

 

Meanwhile, a group of Beartooth members continues to gather signatures requesting a special meeting. The members hope to introduce amendments to the bylaws that would prevent the co-op from spending more money on Highwood or any power generation project without approval of a majority of BEC members. Deb Thomas, one of the organizers of the drive, said she needs a minimum of 500 signatures and can account for at least 200. She expects to have more when members turn in the petitions they've been collecting.

 

- From Gazette staff and news services