Great Falls Tribune

April 22, 2009

Officials tout benefits of gas plant

By RICHARD ECKE
Tribune Staff Writer

An electric co-op official expressed optimism Tuesday evening about plans for a natural-gas-fired plant east of Great Falls.

"We think it fits with where the nation is going," said Tim Gregori of Billings. "We think it fits with where Montana is going."

Gregori, general manager of plant developer Southern Montana Electric Generation & Transmission Cooperative, said natural gas prices are low, so it might be able to get attractive rates by locking in long-term contracts for gas.

"You can really be flexible" with natural-gas-fired power, Gregori told city commissioners at a work session Tuesday.

The city of Great Falls has its own electric utility, Electric City Power, which buys power from SME and sells it to government agencies, nonprofit groups and businesses.

Great Falls Development Authority President Brett Doney urged people Tuesday to support a gas plant, which he said might cost a few hundred million dollars. He noted such a facility would add to the tax base.

"Now we have a project that everybody ought to be able to get behind," Doney told commissioners.

SME originally planned a coal-fired power plant east of Great Falls, but ran into stiff opposition on several fronts. Gregori said Tuesday that efforts to develop the coal-fired plant were "very challenging and almost unrealistic."

"You're just not going to get it done," Gregori said.

He said coal is "a better fuel" than natural gas, in part because it is cheaper, but natural gas-fired plants are more palatable to people these days.

Gregori said the cooperative's development arm, SME Electric, could still opt to buy all the extra power it will need in the future from PPL Montana, rather than build a gas-fired plant. He said SME recently signed a contract with PPL Montana for power through 2019, but declined to disclose a price.

Building a gas-fired plant would provide SME with the ability to generate power needed by its members at peak times, and to supplement wind power, he said. Great Falls is well situated for such a facility, with natural gas fields throughout the area and across the border in Canada, Gregori said.

"We're a long ways from thinking that we're over," Gregori said of the efforts to build a power plant near Great Falls.

He also said it is too early to say whether Montana legislative action in the coming days would assist the project.

Gregori told commissioners that the area might have received a black eye for opposing the coal-fired power plant.

"In torching our project, Great Falls now has a reputation," Gregori said, but added the city remains "a great community" with strong potential.

At a later meeting, coal-fired plant opponent Richard Liebert said he thought opposition to the power plant enhanced the area's reputation.

In other business, City Manager Greg Doyon said during the work session that the city plans to hire a consultant to study whether the city should remain in the electric utility business or figure out a way to get out gradually. The city electric operation is awash in red ink.

"The bottom line is that we need to do something," Doyon said. "We know that the performance has been poor."

He said a consultant needs to look at Electric City Power's structure and operations, analyze its finances, evaluate risks and give the city alternatives.

Doyon said he plans to issue the request for proposals for qualified consultants soon. An estimated price for the consulting work has not been determined.