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Our Response to Rep. Tom Woods of Bozeman

Oct 12, 2015 |

The Gazette (and other papers) recently published an op-ed piece rife with factual inaccuracies, distortions and accusations regarding NorthWestern Energy, its partial ownership of Colstrip Unit Four, the recent purchase of Montana hydroelectric dams, the company’s lobbying during the last legislative session, and other topics. The author of the piece was Rep. Tom Woods, a Bozeman-area legislator.

A complete response to all the allegations from Woods would require many barrels of the Gazette’s ink. But here is another view of some of the most egregious accusations.

In connection with an extended outage at Colstrip 4 in 2013 and early 2014, Woods says NorthWestern passed along the cost of replacement power to customers without going through the state Public Service Commission. In fact, the cost of the power and the prudency of its purchase have been discussed at length by the PSC and its staff and that topic was the subject of a recent multi-day hearing in Helena. The charges for the replacement power were made through the electric tracker process created by the PSC. Each year, it reviews the cost of electricity provided to customers.

In addition, Woods describes Colstrip 4 “as a lemon,” and says ratepayers are bailing out the utility for its “poor decision-making” in purchasing a piece of the plant’s production. The PSC approved the use of the Colstrip power to serve customers. The coal-fired plant reliably supplies a little more than 25 percent of the electricity NorthWestern provides to its Montana customers, as part of a diverse supply portfolio.  About 56 percent of the electricity used by our customers is generated with water and wind.  Based on study of actual availability, Colstrip 4 provides crucial “capacity value,” with 90 percent availability on the coldest days in winter and the hottest days in summer. In comparison, wind has a capacity value around 5 percent.

The legislator also claims that the dams NorthWestern bought late in 2014 are “very expensive generating facilities” and the risk of costly repairs will be borne by customers. NorthWestern’s engineers and professionals, along with independent consulting engineers, did extensive due diligence on the dams’ condition before the purchase. The previous owner of the dams, PPL Montana (now Talen Energy), invested about $240 million in upgrades at the dams during its ownership.  The process used by the PSC to review the purchase stretched over nine months and included a two-week public hearing. We firmly believe the dams will provide clean, stable-priced electricity to Montanans for decades to come.

 Talen Energy recently sold two Pennsylvania hydroelectric dams with only 292 megawatts of capacity for $860 million. NorthWestern paid $870 million for the 11 Montana dams, which have 423 megawatts of production capacity.

Woods also claims that NorthWestern has too much influence in the Montana Legislature and “gets the best government money can buy.” To imply that the utility is somehow engaged in bribery is baseless and insulting to fellow legislators and state and local government officials.

 More than 1,000 bills are introduced in a typical legislative session, on topics ranging from land-use and property taxes to labor law. NorthWestern employs two lobbyists and hires part-time contract lobbyists to monitor those bills and when it’s appropriate, advocate for the company and its customers. Those activities are no different than those engaged by other companies, labor groups, environmental organizations, units of the university system and many others. The company spends significantly less on lobbying than other entities.

The utility industry in Montana and across the U.S. is changing rapidly. Developing a clear understanding of the relevant issues and relying on facts is critical for those interested in helping shape the state’s energy future.  Blatant misrepresentations or outright misstatements, especially by those who hold public office, only hinder the development of forward-thinking public policies.


John Hines

Vice President, Supply

NorthWestern Energy

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