The Power of Wind
A Citizen’s Guide to
Wind Development in Montana
Jeanette Alora Blize
Directed Reading, Fall 2010
Community & Regional Planning
Temple University, School of Environmental Design
Table of Contents
Introduction
3
Part I: History and Current Status of Wind Development in Montana
Early Wind Development in Montana
Deregulation and the Montana Public Service Commission
Great Strides for Wind, 2005 to the Present
Montana‟s Four Commercial Wind Farms
2005 Legislature Sends a Message: Montana is Open for Business
Enormous Wind Potential, No Load
Greatest Challenge for Wind Development in Montana: Lack of Transmission
3
3
4
5
5
6
7
7
Part II: Montana has a Choice to Make
8
Option#1: Develop Wind as an Export Commodity
8
The Benefits of Building New Transmission
Serving RPSs around the West
New transmission increases reliability
8
8
11
The Challenges of Building New Transmission
Cost: Who pays for new transmission?
Placement: Where will the new transmission go?
Line Loss: Does it make sense to export wind energy to markets so far away?
11
12
14
17
Six Proposed Transmission Projects for Montana Wind Power
1. Mountain States Transmission Intertie (MSTI)
2. BPA / Colstrip Line Upgrades
3. Montana Renewable Collector System
4. Montana Alberta Tie Ltd. (MATL)
5. Chinook Transmission Line
6. Wind Spirit Project
18
19
20
21
22
23
24
Option 2: Focus on Developing Wind for Montana
26
Community Wind Projects & Distributed Energy
27
Part III: The Challenges and Benefits of Wind Development in General
28
The General Challenges of Wind Generation
 Wind is Intermittent
“Firming” Wind
Cost of Wind is Unknown
28
28
30
30
1
Lack of Reliable Data
Lack of Coordination Among Stakeholders
Political Challenges
31
32
34
The General Benefits of Wind Generation
Economic Benefits
Social Benefits
Environmental Benefits
35
35
37
37
Part IV: What is Needed in Addition to Wind to Reduce Global Warming
National Policy
Smart Grid
Efficiency Programs
Distributed Energy
38
38
39
41
41
Conclusion
41
Contributing Personal Interview
43
References
44
2
Introduction
We all have heard the disturbing forecast that the glaciers in Glacier National Park will
be gone by 2030 if fast action is not taken to reduce carbon dioxide emissions; more recent
calculations predict their disappearance by 2020 (Minard, 2009). But, what can Montanans do to
make a significant impact on global warming? Twenty-nine states have enacted renewable
portfolio standards (RPSs) to reduce carbon dioxide emissions from energy generation facilities
and curb the devastating impacts of climate change. RPSs spur renewable energy development
by requiring that a certain percentage of utilities‟ energy supplies come from renewable sources.
Montana passed its RPS in 2005 and is already on track to meet it in 2015 with the development
of just a few wind farms. Now Montana has the opportunity to take wind development a step
further. Rather than just supply renewable energy to Montana residents, it is poised to play a
much larger role as a major exporter of wind energy, helping other western states to meet their
RPS requirements as well. Montana‟s wind potential is enormous, but there is no way to ship it
out of state without building large transmission lines. This document serves as an introductory
guide to the key issues surrounding the wind energy development discussion in Montana. It
explores Montana‟s history and current progress with wind development, issues related to
building new transmission, options for keeping wind energy local, the overall challenges and
benefits of developing wind in Montana, and concludes with some additional insight from
Montana professionals about what is needed, in addition to wind energy, to reduce carbon
emissions and hopefully keep Montana‟s glaciers around for a little bit longer.
PART I: History and Current Status of Wind Development in Montana
Early Wind Development in Montana
The use of wind energy was fairly common in the 1800s across homesteads and ranches
in Montana. Farmers and ranchers used windmills to pump water and generate small amounts of
electricity on their properties. In the 1930s, the use of windmills diminished when the Rural
Electrification Administration programs brought reliable and inexpensive electricity to rural
areas. While fossil fuel prices remained low, no incentive existed for further developing wind
generation technology. Later, soaring electricity prices in the 1970s spurred the research and
3
development of wind technology. Congress also passed the Public Utility Regulatory Policies
Act (PURPA) in 1978 which promoted renewable energy in a variety of different ways.1
Montana Power Company began studying wind power potential in the late 1980s and
early 1990s in partnership with Montana State University, and a few small wind projects were
developed near Livingston with the help of PURPA. In 1998 a 195 kilowatt (kW) wind farm
was installed near Livingston and additional small facilities known as qualifying facilities (QFs)
came online in 2001, 2003, 2004 and 2005. Wind turbine technology at that time only allowed
wind farms to operate at 25% capacity while today‟s turbines can run in excess of 40% capacity
in some Montana locations.2
Deregulation and the Montana Public Service Commission
Montana‟s energy generation facilities and distribution system were owned and operated
by the Butte-based Montana Power Company until 1997. An elected five-member Public
Service Commission (PSC) regulated the electric rates, which were among the lowest in the
nation. In 1997, the Montana Legislature passed a controversial, industry-driven utility
restructuring law allowing Montana Power to sell its transmission and distribution system to
South Dakota-based NorthWestern Energy, and its generation facilities to Pennsylvania-based
Pennsylvania Power and Light (PPL). After the transition period ended, NorthWestern Energy
became Montana‟s dominant residential electricity supplier and began buying energy on the open
market to supply its 330,000 Montana customers. Without utility-owned generation in the state,
Montana rates skyrocketed. “NorthWestern only recently began re-acquiring its own powergeneration sources, to reduce the amount of electricity it buys on open markets to serve its
Montana customers” (Dennison, 2010b, para. 9). The PSC has a quasi-judicial authority over the
actions of NorthWestern Energy and a second utility called Montana-Dakota Utilities (MDU),
which serves about 24,000 electric customers in eastern Montana (MDU, 2010). NorthWestern
and MDU must get PSC approval for their rates, tariffs, large purchases including Power
Purchase Agreements (PPAs), and resource plans.
1
2
Gutsche, Gail. 2010. Interveiw by author. Missoula, MT. October 7, 2010.
Gutsche, Gail. 2010. Interveiw by author. Missoula, MT. October 7, 2010.
4
Great Strides for Wind, 2005 to the Present
Great strides were made for wind development in Montana in 2005. Montana‟s first
commercial wind farm was installed, the Montana Legislature passed its Renewable Portfolio
Standard and passed legislation creating a new tax classification for wind that lowered the
taxable property rate for wind farms from 12% to 3%.3 In 2008, Montana‟s wind farms account
for only 2% of the total electricity generated in the state (EIA, 2008). But, considering there was
less than 1 MW of wind installed at the beginning of 2005, it has grown at a fair pace over a five
year period. Today four commercial wind projects are installed, totaling close to 400 MW of
firm power. In the grand scheme, 400 MW is not much electricity, but according to the
Governor‟s office of Economic Development, more than 50 additional wind projects are in the
works which could add 4,000 MW to Montana‟s portfolio (MT OED, 2009).
Montana’s Four Commercial Wind Farms
Judith Gap, the first commercial wind farm in Montana, was installed in Wheatland
County in October 2005. Originally conceived by a Montana farmer and German entrepreneur
who conducted a feasibility study for the project with a grant from the U.S. Department of
Agriculture, the project was sold to Chicago-based Invenergy in 2004. As Judith Gap moved
forward, its fate relied on the Public Service Commission‟s 4-1 vote to allow Invenergy to sell its
power to NorthWestern Energy. Without a long-term contract (a PPA) with a utility, wind
developers cannot secure the bank financing they need to build. Today, Judith Gap is a 90
turbine, 135 MW wind farm with a proposed 52.5 MW expansion (MT DNRC, 2010).
Glacier Wind, the largest wind farm in Montana, was installed near Shelby in July 2008.
Glacier Wind generates 510 MW of electricity and was developed for out of state markets. Even
though no direct transmission lines connect Glacier Wind to California, its energy is contracted
with San Diego Gas and Electric and contributes to California‟s renewable portfolio standard.
California can do this because California‟s RPS allows utilities to use tradable renewable energy
credits. Even though the electricity produced by Glacier Wind cannot physically make it to
California, Glacier Wind‟s energy is 100% dedicated to the California market.4
3
4
Jennings, Matt. 2010. Interview by author. Missoula, MT. October 6, 2010.
Jennings, Matt. 2010. Interview by author. Missoula, MT. October 6, 2010.
5
Two small community scale commercial wind farms have also been developed since
2005 to serve NorthWestern Energy‟s renewable portfolio standard: Horseshoe Bend Wind Park
and Diamond Willow Wind Farm. Horseshoe Bend was installed in January 2006 outside of
Great Falls with 9 MW of power. It is owned and operated by United Materials, a local
aggregate and highway construction company. Diamond Willow was installed by MDU near
Baker in January of 2008 and produces 19.5 MW of electricity (MT OED, 2009).
2005 Legislature Sends a Message: Montana is Open for Business
In 2005, Montana had a Democratic Governor, a split State House, and a Democratic
majority in the Senate. This make-up allowed for two significant pieces of pro-wind legislation
to pass, which sent a strong, positive message to the renewable energy industry that Montana
was open for business. The first was SB 415, sponsored by Sen. Jon Tester, which created a
graduated renewable portfolio standard (RPS). The second, SB 115, was also sponsored by Sen.
Tester, which lowered the property tax rate for wind developers from 12% to 3%.5
Montana‟s RPS requires Montana‟s two regulated utilities, NorthWest Energy and MDU,
to supply 10% of their electricity from renewable sources by the year 2010, and 15% by 2015
(Beltrone, 2010). Montana is already on track to easily meet its RPS requirement in 2015.
Unlike California‟s RPS, which allows for tradable renewable energy credits (TRECs),
Montana‟s RPS says that utilities must demonstrate that the wind energy they purchase can
physically flow from the turbine to the end user. Even though Montana does not have a TREC
RPS, wind farms in the state are free to participate in California‟s TRECs. As mentioned earlier,
Glacier Wind sells power to California to fulfill California‟s RPS even though there are no
physical lines connecting Montana to California.6
According to Matt Jennings, who worked with then State Senator Tester in 2005 to pass
SB 415, “the biggest political hurdle for passing Montana‟s RPS was cost and, as a result, some
compromises were made.” Opponents argued that developing renewable sources would raise
their electric rates. The compromise made to the bill is that,
“the utility is only required to buy renewable power if the cost of the energy and
its ancillary services (includes the power needed to firm the baseload of wind) are
5
6
Jennings, Matt. 2010. Interview by author. Missoula, MT. October 6, 2010.
Furey, Kevin. 2010. Interview by author. Helena, MT. October 8, 2010.
6
less than the average portfolio. Ironically, because of where the electricity
markets were going at the time, NorthWestern Energy was able to lock Judith Gap
into a 20 year contract at $32 per megawatt. The cost to firm it is about $8 per
megawatt, so the real cost for Judith Gap is $40 per megawatt. Right after that,
PPL jacked up its prices for selling to NorthWestern Energy to $45/MW and in
2012 PPL‟s baseload rates will go up to $52/MW, which is about 1/3 of all the
power that NorthWestern Energy consumes.”7
Enormous Wind Potential, No Load
Montana‟s wind potential is huge, but in-state demand, or load, is very low. According
to the National Renewable Energy Laboratory‟s most recent assessment, Montana ranks 3rd in
the nation for wind energy potential, behind Texas and Kansas respectively (RES, 2010). In a
Harvard study, Montana is tied with Kansas with the 2nd highest wind potential in the country
(Lu, McElroy, and Kiviluoma, 2009). While only a fraction of the 944,000 MW of wind
potential could be developed into wind farms, even that dwarfs the 1,500 MW of electricity used
by Montana consumers. Montana already exports about half of the electricity it generates; it has
the capacity, but doesn‟t need the additional energy. California and Nevada have the demand,
but do not have the capacity. Any future wind development in Montana has to be sold to out-ofstate customers.8
Greatest Challenge for Wind Development in Montana: Lack of Transmission
Several challenges hold Montana back from fully realizing its wind energy potential. The
greatest and most daunting challenge is lack of transmission. Montana has 50 wind farms in
various levels of production but the current electric grid does not have the means to move
electricity from Montana to California and Nevada, where the demand is. The current
transmission path is at capacity and was not built to move large amounts of electricity half way
across the country.9 Better use and upgrades to the current system will create additional
capacity. But the stark reality is that, if Montana wants to sell more energy to out-of-state
7
Jennings, Matt. 2010. Interview by author. Missoula, MT. October 6, 2010.
Furey, Kevin. 2010. Interview by author. Helena, MT. October 8, 2010.
9
Furey, Kevin. 2010. Interview by author. Helena, MT. October 8, 2010.
8
7
customers, it must build more generation facilities and new transmission lines. It‟s a huge
controversy in the state.10
Part II: Montana Has a Choice to Make
Montana is at a critical juncture where wind development is concerned. Policy-makers
are asking themselves hard questions about what Montana‟s role should be. Does Montana focus
on providing clean energy for Montana only, or tap its wind potential and contribute to the global
market? According to Montana Public Service Commissioner, Gail Gutsche,
“it is a societal and philosophical question. We have to decide: do we want to
play nationally, and internationally? On one side, there are the people who say
we just need to produce for Montana consumers and, if that is the case, we
already produce two times more energy than we use. Energy is a commodity just
like everything else we sell: cattle, wheat, etc. Some people feel that enough is
enough. I say we play.”11
State Representative Betsy Hands (D-Missoula) agrees. “We need to see ourselves as an
exporter of green energy.”12 Gutsche feels it is the responsibility of NorthWestern Energy and
the Public Service Commission to hold public meetings to educate people about what it means if
we do expand our wind and build additional transmission and what it means if we do not. She
feels it is important to explore publicly “what it means for the country if we do not allow
California to buy our wind.”13
Option#1: Develop Wind as an Export Commodity
THE BENEFITS OF BUILDING NEW TRANSMISSION
Serving RPSs Around the West
If Montana develops wind generation as an export commodity, a couple of important
benefits will result. One is that Montana will help serve other western states‟ renewable
portfolio standards (RPSs). Twenty-nine states and Washington D.C. now have renewable
10
Gutsche, Gail.
Gutsche, Gail.
12
Hands, Betsy.
13
Gutsche, Gail.
11
2010.
2010.
2010.
2010.
Interveiw by author.
Interveiw by author.
Interview by author.
Interveiw by author.
Missoula, MT. October 7, 2010.
Missoula, MT. October 7, 2010.
Missoula, MT. October 7, 2010.
Missoula, MT. October 7, 2010.
8
portfolio standards (see Figure 1) and they are spurring the growth of renewable power all over
the west.14 California‟s RPS is 33% by 2020 and Nevada‟s is 25% by 2025. California and
Nevada‟s total energy use is so great that they cannot produce all the renewable energy they need
in-state. To meet their standards, most states require utilities to purchase renewable energy
credits (RECs) that are verified by the Western Renewable Energy Generation Information
System (WREGIS). WREGIS verifies that the power produced is from a renewable source, that
it can flow from the generator to the consumer, and certifies that Utility X purchased the power
from Generator A.15
Figure 1: U.S. RPS Map, 2010. Source: Grasslands Renewable Energy
Unlike Montana, California has tradable RECs (TRECs) which means it does not have to
demonstrate a path between the generator and the end user. But that could change in future
years. As described earlier, California‟s use of TRECs is what allows San Diego Gas and
Electric to contract with Glacier Wind in Montana even though no transmission lines connect the
two. Traditional RECs require the utility to purchase power from a generator with the capability
of sending power to it. Montana‟s RPS does not allow its utilities to purchase energy with
14
15
Keogh, Ross. 2010. Interview by author. Missoula, MT. October 7, 2010.
Gutsche, Gail. 2010. Interveiw by author. Missoula, MT. October 7, 2010.
9
TRECs but Montana wind farms can participate in California‟s TRECs. The rule applies to the
utility, not the wind farm.16
California‟s TRECs make it possible for future wind farms in Montana to contract with
California utilities without building new transmission. However, the power generated in
Montana still has to go somewhere, creating big challenges for NorthWestern Energy.
According to Kevin Furey, “the fear of NorthWestern Energy is that there will be
more projects like Glacier Wind. Currently NorthWestern buys the electricity
from Glacier Wind and pays almost nothing for it (like $0.01/KWh) because
Glacier Wind gets money for selling the REC to California and gets the
production tax credit. If Glacier Wind only needs to make $50/MWh, it may have
already made $40/MWh by selling it to California and collecting the production
tax credit. But, NorthWestern Energy has to deal with it.”17
NorthWestern is required by the Public Utility Regulatory Policies Act (PURPA) to
purchase power from “qualified facilities” (QFs), facilities that produce less than 10 MW; but
not at any price. “PURPA says that the rates cannot discriminate against the QFs, they must be
just and reasonable to electric consumers, and must be in the public interest.”18 The Montana
Public Service Commission uses PURPA‟s guidelines to approve the rate and where the
renewable attributes go. For a certain price, NorthWestern must take the energy generated by the
QF onto their transmission system. As the largest utility in the state, NorthWestern is Montana‟s
“balancing authority,” meaning it has the responsibility of managing the state‟s transmission
system and ensuring it is not out of balance. Montana‟s existing transmission lines are at
capacity. If future wind farms develop in Montana, and continue to contract with California
utilities without added transmission, NorthWestern will not be able to manage the additional
power on the lines. Another issue for NorthWestern if new wind farms contract with California
via TRECs is that NorthWestern will need to build new gas plants to “firm” the wind (see Part 3:
Challenges of Wind Development in General). To build a new gas plant, NorthWestern “would
have to get the permitting and build the facility close to where the wind generation is and that is
not easy to do.”19
16
Furey, Kevin. 2010. Interview by author. Helena, MT. October 8, 2010.
Furey, Kevin. 2010. Interview by author. Helena, MT. October 8, 2010.
18
Gutsche, Gail. 2010. Interveiw by author. Missoula, MT. October 7, 2010.
19
Furey, Kevin. 2010. Interview by author. Helena, MT. October 8, 2010.
17
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New transmission increases reliability
In addition to serving RPSs around the West, a second benefit of building new
transmission in Montana is that it will increase reliability for the system overall. However,
experts do not all agree on how significant the added reliability will be. The following are
perspectives on the proposed Mountain States Transmission Intertie (MSTI):
According to Ross Keogh, a planner and analyst for Sagebrush Energy, the question for
policy-makers is “do the benefits of reliability justify the associated costs of developing the
wind? A well-interconnected electrical grid can be better utilized and can allow energy to move
around more efficiently. The connection of Montana to Idaho on the MSTI pathway will make
the system significantly more reliable.”20
On the other hand, according to the Regulatory Assistance Project's (RAP) draft
comments on MSTI, “the MSTI line is not going to be looped with existing transmission
facilities and is not expected to create any reliability benefits for existing NorthWestern local
customers” (Allen, 2010, p. 2). Former Montana legislator and PSC staffer, Kevin Furey says
that only 1-2% of the MSTI line will improve reliability for Montana.21 Public Service
Commissioner Gail Gutsche acknowledges that there will be some level of increased reliability
for Montana consumers, but it is not clear what it will be.22
THE CHALLENGES OF DEVELOPING NEW TRANSMISSION
Although the controversy over building new transmission is rooted in a philosophical
debate about Montana‟s role as an exporter of green energy, Montanans are primarily concerned
about two very pragmatic issues: who is going to pay for it, and where is it going to go? In short,
people do not want their electric rates to increase and they do not want new transmission lines on
their property, upsetting their way of life. The controversy is exacerbated by mistrust and the
spread of misinformation by various stakeholders. In addition to the challenges posed by cost
and placement, line loss is a third transmission challenge for Montana‟s wind export industry.
20
Keogh, Ross. 2010. Interview by author. Missoula, MT. October 7, 2010.
Furey, Kevin. 2010. Interview by author. Helena, MT. October 8, 2010.
22
Gutsche, Gail. 2010. Interveiw by author. Missoula, MT. October 7, 2010.
21
11
Cost: Who pays for new transmission?
Several new transmission projects are in the pipeline (outlined in the next section: 6 Big
Transmission Proposals) that would be dedicated solely to the export of wind energy to the
Pacific Northwest and Southwestern markets. But, even Montanans who want to see wind
developed as an export commodity in the state do not want their electricity rates to increase as a
result. There are several differing points of view on this issue.
New transmission lines are developed by utility companies because it is their
responsibility to provide space for new generators on their lines. For example, NorthWestern
Energy is not required to build the proposed Mountain State Intertie Line (MSTI) to the size it is
currently proposed, but they do have to build something. A Federal Energy Regulatory
Commission (FERC) rule called the Open Access Transmission Tariff (OATT) says that
NorthWestern, as the state‟s transmission provider, has to accommodate wind developers who
want to use its system to transmit electricity. NorthWestern does not currently have 1,500 MW
of transmission service requests (TSRs) from wind developers, but it knows that MSTI will
eventually fill up and wants to build for the future.23
Another rule under FERC‟s OATT says that NorthWestern‟s “transmission customers
must pay for the incremental cost of the upgrades” (Allen, 2010, p. 2). New transmission is very
expensive to build and Montana ratepayers do not want to pay to export wind energy out of state.
According to NorthWestern Energy,
“MSTI is being developed to serve transmission customers seeking to export
power, rather than to serve native load customers in Montana. This implies that
NorthWestern Energy would not be expected to request inclusion of MSTI‟s costs
in rate base. Rather, NorthWestern Energy would recover the costs of MSTI from
those parties that subscribe to use the MSTI service. Consequently, the costs of
the MSTI project would not be included in Montana retail electric rates” (Allen,
2010, p. 6).
The Montana Public Service Commission (PSC) approves NorthWestern Energy‟s
electricity rates and does not want Montana customers to pay for any of MSTI. But a FERC rule
says that individuals who benefit from new lines have to pay their fair share. MSTI would
improve some level of reliability for Montana so Montana customers may have to pay for some
of that. The PSC‟s mindset is that Montana‟s system doesn‟t need MSTI to increase reliability
23
Furey, Kevin. 2010. Interview by author. Helena, MT. October 8, 2010.
12
because its reliability is fine. Since the power being transmitted on the line is not for Montanans,
Montanans shouldn‟t have to pay anything. That may pose an issue in the future because FERC
may say that Montanans have to pay for some of it, but that is still unknown.24
FERC rules also say that the utility is guaranteed to recoup 100% of what they spend and
has a right to make a profit. If NorthWestern spends $10 million on infrastructure, it can transfer
that cost to the ratepayers. “As long as they spend the money prudently, it benefits the public,
and it is „fair, just and reasonable,‟ the PSC has to approve their rates,” says Gail Gutsche. “But
we don‟t want new transmission lines to cost Montanans more than their fair share. We want to
insulate Montana ratepayers from what out of state people will pay for wind. California and
Nevada pay a lot more for electricity.”25 Also, according to draft comments on MSTI from the
Regulatory Assistance Project, “NorthWestern has filed a proposed amendment to its OATT that
would require wind generators to manage the regulation services burden they impose on
NorthWestern when the energy they produce is exported” (Allen, 2010, p. 3).
According to Kevin Furey, the fear that building new transmission will increase costs for
Montana ratepayers is “largely unfounded due to the economics and physics of electricity. Part
of this question should be resolved by FERC within the next several years.”26 There is also hope
that FERC will set rules about who incurs the upfront costs for transmission projects.
Transmission developers want wind developers to pay up front and arrange to pay the wind
developer back over the years. Wind developers want the utility company to pay up front and
arrange to pay the utility back by paying extra for the power that is shipped on the line. Montana
consumer groups do not want the Montana utility to have to pay for any of it because they want
the customers in California to pay via the California utilities.27
As if the issue was not complex enough, the controversy around who pays for new
transmission is further fueled by mistrust and the spread of misinformation among the
stakeholders. Rep. Betsy Hands wonders if there is even enough outside data to make informed
decisions about new transmission. The main two sources of information are the utility
companies and the Consumer Credit Council. She‟s not sure how sophisticated these entities are
24
Furey, Kevin. 2010. Interview by author. Helena, MT. October 8, 2010.
Gutsche, Gail. 2010. Interveiw by author. Missoula, MT. October 7, 2010.
26
Furey, Kevin. 2010. Interview by author. Helena, MT. October 8, 2010.
27
Furey, Kevin. 2010. Interview by author. Helena, MT. October 8, 2010.
25
13
and skeptical of their interest in expanding the green economy.28 Public Service Commissioners
opposed to building new transmission have been spreading the word that Montanans will have to
pay higher rates with MSTI. According to former PSC staff member, Kevin Furey,
“Commissioner Brad Molnar is really opposed to MSTI. He has a warped perception that
Montanans are going to have to pay California rates if we build so much transmission; he is just
wrong.”29 Others question the entire economic model being used. According to Ross Keogh,
“the underlying economics of building MSTI for the sole purpose of renewable
energy are difficult, if not impossible. To overcome them requires a bunch of
innovative ways of maximizing the usage of the supply and demand. I would
challenge anyone to show an economic model that says that a transmission line
like MSTI can be built and solely funded by the use of that transmission mined by
wind developers.”30
Placement: Where will the new transmission go?
The second great challenge of building new transmission is placement. Transmission
lines are enormous compared to residential distribution lines (see Figure 2) and landowners do
not want them on their property, disrupting their way of life. Environmental concerns also play a
role in the discussion, but are not the source of as much controversy as landowner issues.
Figure 2: The Size of New Transmission, Source: Byron, 2010
28
Hands, Betsy. 2010. Interview by author. Missoula, MT. October 7, 2010.
Furey, Kevin. 2010. Interview by author. Helena, MT. October 8, 2010.
30
Keogh, Ross. 2010. Interview by author. Missoula, MT. October 7, 2010.
29
14
The planning and implementation processes for building new transmission lines is multistate, multi-jurisdictional and takes years to complete. Planning happens at the regional level.
The Western Electricity Coordinating Council (WECC) coordinates stakeholder groups to
conduct regional transmission expansion planning, but critics argue that utilities are too
dominant in the process. They say that small wind energy developers and environmental groups
need a larger seat at the table.
WECC serves as the regional planning and policy facilitator for the Western
Interconnection. The Northern Tier Transmission Group (NTTG) is the sub-regional planning
body encompassing Montana. NTTG conducts a biennial planning process based on a subregional 10 year transmission study focused on moving power from developing resources to
growing loads within the Western Interconnection (WECC, 2010). Ultimately, NTTG proposes
to WECC where new transmission should go.31
On the implementation side, FERC is responsible for siting new transmission lines and
the Montana Department of Environmental Quality (DEQ) carries out the permitting and
oversight. The final route for new transmission is determined through processes provided by the
National Environmental Policy Act (NEPA), the Montana Environmental Policy Act (MEPA)
and the Montana Facilities Siting Act (MFSA). NEPA, MEPA, and MFSA all require
environmental reviews and over 50 siting and permitting authorities are required in the
implementation process. The PSC does not have much of a role in the transmission and
implementation process, but former PSC Commissioner Ken Toole sat on NTTG‟s Steering
Committee in 2010 and the PSC as a body provides comments to FERC. Opportunities for
public comment are also built into the planning and implementation process but, again, critics
argue that utilities control the process. Public open houses and landowner and right-of-way
meetings are held, meetings are held with elected officials, and public comment periods are
required by law in the environmental review process32,33 (NWE, 2009).
Outrage among landowners with regard to powerlines is stronger now than it has ever
been in Montana. Montana citizen landowner groups are fighting to keep new transmission lines
off private property and lawsuits have been filed. For example, NorthWestern Energy is having
31
Hands, Betsy. 2010. Interview by author. Missoula, MT. October 7, 2010.
Hands, Betsy. 2010. Interview by author. Missoula, MT. October 7, 2010.
33
Gutsche, Gail. 2010. Interveiw by author. Missoula, MT. October 7, 2010.
32
15
great difficulty with its proposed MSTI line due to protests from landowners who claim it would
“come at their expense through loss of property value to benefit NorthWestern Energy” (Gevock,
2010, para. 4). Jefferson County filed a lawsuit against the MT DEQ in May 2010, alleging it
was shut out of the planning process and asking for an injunction halting MSTI until the county
is allowed to participate (Gevock, 2010).
While transmission planners do their best to align new transmission on public lands, it is
impossible to keep it completely off private lands. A citizen landowner group called Move
MSTI argues that if MSTI “is being built to benefit the public, it should be placed on public
lands” (Byron, 2010, para. 26). Move MSTI has various concerns about the impacts
transmission lines have on people and private property including negative health effects caused
by the close proximity to electromagnetic fields (EMFs), devaluation and loss of property, and
negative impacts on local industries such as farming and ranching (Move MSTI, 2010).
NorthWestern Energy says that it chose the current path for MSTI “because it runs along existing
power lines or other linear features, like highways and railroads, to the greatest extent possible”
(Byron, 2010).
Rep. Betsy Hands thinks that “in some ways it is a lot better to run the lines
through populated areas” where there are existing transmission and transportation
corridors “rather than building new transmission through remote wildlife habitat.” But,
she emphasizes the importance of compensating landowners appropriately.
“So far there has been no way to get the stakeholders together to discuss. There is
no community trust and each landowner just gets paid off. We would like to see
the utility company doing something for the entire community. It would be better
to honor private property owners by giving them the opportunity to collectively
bargain with the utility rather than having each landowner enter into private
negotiations. The private negotiations pit neighbors against each other and create
bitterness and untrustfulness within the community; not a good thing for a small
town. Wyoming has a community trust so that some of the profits go back to the
whole community.”
At some point the legislature can use eminent domain and force the utilities onto peoples‟ land,
but would like that to be their last resort.34
Environmental groups have been much quieter than landowner groups in the transmission
line placement discussion. In the beginning, it seemed like they were against building new
34
Hands, Betsy. 2010. Interview by author. Missoula, MT. October 7, 2010.
16
transmission because of concerns about negative impacts on birds and sensitive wildlife habitat.
But it seems that now that the environmental community is generally supportive because of the
positive impact new transmission will have for wind development and climate change overall.35
Environmentalists may also be more comfortable with the transmission siting process
thanks to the Western Governors‟ Association‟s (WGA) Wildlife Pilot Project. According to the
project‟s website, the pilot began in 2007 “in response to burgeoning renewable energy and
electrical transmission project proposals in the West.” The WGA “adopted policy to identify key
wildlife migration corridors, crucial habits, and options for preserving landscapes recognizing
that landscape scale wildlife information was critical to respond to new energy proposals”
(Kiefer, 2010). The WGA Wildlife Project allowed Idaho and Montana to partner and create a
“transboundary wildlife mapping tool for fish, wildlife and habitats along the Idaho-Montana
Divide, making it “easier for developers and state agencies to identify areas where [transmission]
development can occur with minimal impacts to wildlife” (WGA, 2010, para. 4).
Line Loss: Does it make sense to export wind energy to markets so far away?
Clearly Montana has a huge surplus of energy to offer markets in California and Nevada.
But the longer the distance electricity has to travel, the greater the amount of electricity that will
be lost on the line. Critics of new transmission argue that it is not necessary for Montana to send
power all the way to California when there is plenty of wind potential in Wyoming and Idaho to
meet demand. According to Kevin Furey, “from here to California, about 10% of the power we
generate will be lost on the line because of the distance it has to travel. California ratepayers will
pay more because of that.36
According to Ross Keogh, the marginal difference in wind energy output between
Montana wind farms and sites in southern Idaho is not nearly enough to justify the construction
of new transmission lines in Montana; not for the sole and exclusive purpose of bringing wind
power to out-of-state markets. The cost of MSTI is equivalent to 1/5 of Montana‟s total state
budget.”37
35
Hands, Betsy. 2010. Interview by author. Missoula, MT. October 7, 2010.
Furey, Kevin. 2010. Interview by author. Helena, MT. October 8, 2010.
37
Keogh, Ross. 2010. Interview by author. Missoula, MT. October 7, 2010.
36
17
SIX PROPOSED TRANSMISSION PROJECTS FOR MONTANA WIND POWER38
The following new transmission projects (Figure 3) are currently proposed in Montana
for the sole purpose of exporting wind to out-of-state markets in the Pacific Northwest and
Desert Southwest. These projects would add an additional 6,400 MW of transmission capability
to the state (Wagner, 2010.)
Figure 3: The Six Proposed Transmission Projects in Montana
Source: MT Office of Economic Development, Energy Promotion and Development Division, 2010
38
Unless otherwise noted, content for this section was obtained from the Edison Electric Institute (EEI). (2010).
Transmission projects: At a glance. Updated February 2010. Retrieved from
http://www.eei.org/ourissues/ElectricityTransmission/Documents/Trans_Project_M-O.pdf
18
1. Mountain States Transmission Intertie (MSTI), 500 kV AC line
Proposed by Northwestern Energy, 2007 (MSTI, 2010; EEI, 2010)
Figure 4 Source: Edison Electric Institute
Location: Connects to a proposed Townsend Substation 5
miles south of Townsend, Montana to the Midpoint Substation
10 miles north of Jerome, Idaho. Midpoint is a primary electric
distribution point in the western United States.
Length: approximately 430 miles depending on the final route;
70+% is on state and federal public lands
Cost: $1 billion
Capacity: 1,500 MW
Status: In the planning, siting and permitting stage.
NorthWestern is working to identify MSTI customers,
construction is expected to begin in March 2012 and commercial operation date is March 2015.
Description
NorthWestern Energy has two existing transmission lines that run along the general MSTI
pathway from Townsend southwest out of the state. However, existing lines are congested and
NorthWestern has done all it can to upgrade them. MSTI would “relieve existing congestion
between Montana and Idaho” and move a significant amount of renewable power to regional
markets (EEI, 2010). MSTI would be a green energy line and provide a key pathway for
Montana wind generation to demand centers in the Pacific Northwest and the Desert Southwest.
NorthWestern responded to “the Western Area Power Authority‟s (WAPA) Request for
Interest and to DOE‟s Federal Loan Guarantee for Electric Power Transmission Infrastructure
Investment Projects. Both applications are pending response” (EEI, 2010). MSTI is quasi-public
infrastructure. Although owned and operated by a private company, they have public access
requirements and are open and used by everyone. It also has ancillary benefits like increased
reliability.39
Critics of the MSTI line are quick to point out that MSTI is completely dependent on other
projects. It stops at a substation in southern Idaho; not at a major load center. The hope is that
39
Furey, Kevin. 2010. Interview by author. Helena, MT. October 8, 2010.
19
another utility will build a connecting transmission line to get the power to southern Nevada.
But, if no other transmission projects happen, the construction of MSTI will not result in a single
new MW of power.40 However, according to the Regulatory Assistance Project, there are a
number of transmission proposals in play that would relieve those constraints (Allen, 2010).
MSTI faces significant public backlash and is tied up in legal battles, making its future uncertain.
2. BPA / Colstrip line upgrade, 500kV
Proposed by NorthWestern, the Bonneville Power Administration (BPA), and the other
Colstrip Transmission System owners, 2008 (EEI, 2010)
Location: Colstrip, MT to Taft, MT and beyond to the
Pacific Northwest
Cost: up to $207 million depending on the
incremental capacity increase.
Capacity: Increase existing line by 700 MW
Project Status: Project planning studies will be
completed by late 2011, with anticipated construction
in 2011/12, and in service by 2012.
Figure 5 Source: Edison Electric Institute
Project Description
“NorthWestern, the Bonneville Power Administration (BPA), and the other Colstrip
Transmission System owners, have completed initial technical studies to increase the existing
500 kV transmission system by up to 700 MW. This system extends from Colstrip in eastern
Montana to the Pacific Northwest. The line east of Townsend, MT is owned by NorthWestern
and its partners while the line west of Townsend is owned by the BPA. The Montana 500 kV
transmission system is used to move the existing coal-fired Colstrip generation to the Northwest,
of which approximately 70% is exported to serve population centers outside of Montana. The
upgrade is currently being studied in greater detail to identify specific facilities required and the
plan of service. The upgrade is anticipated to serve the export market as well by moving
renewable power to growing markets” (MT DOC, 2010a, p.3).
40
Keogh, Ross. 2010. Interview by author. Missoula, MT. October 7, 2010.
20
3. Montana Renewable Collector System, five 500kV lines
Proposed by NorthWestern Energy, 2010 (EEI, 2010)
Figure 5 Source: Edison Electric Institute
Location: 5 transmission lines begin in different
areas of central Montana (Great Falls, Belt/Judith
Gap, Martinsdale, Broadview, and Ennis) and
lead to a proposed substation in Townsend, MT.
Length: approx. 675 circuit miles of new
transmission constructed for all five collector
lines.
Cost: each line may cost up to $225 million.
Each will be unique and cost will be determined
by location and routing.
Capacity: to be determined
Status: Planning, siting and permitting stage: 2010-2012. Construction expected to begin in
2012 with a commercial operation date of 2014.
Description
The proposed Collector Project potentially consists of “five generator lead lines, or
collector lines, that originate in the high wind areas of Montana and move renewable wind
energy” to a proposed Townsend Substation. The Townsend Substation connects the collector
lines to existing transmission traversing “Montana from east to west and to NorthWestern‟s
proposed MSTI line” that begins at the Townsend Substation and ends at the Midpoint
Substation. From Midpoint, wind generators using MSTI would have “access through existing
and proposed new transmission to energy consumers in the Pacific Northwest and the Desert
Southwest” (EEI, 2010).
According to the Montana Department of Commerce, “WAPA & NorthWestern Energy have
signed agreements to coordinate the planning of two regional wind energy transmission projects
which will help move Montana‟s wind power out of the state to purchasing markets” (MT DOC,
2010a). The two projects cited are MSTI and the Montana Renewable Collector System.
21
NorthWestern responded to WAPA‟s Request for Interest for financing from stimulus funds, but
WAPA has not replied.
4. Montana Alberta Tie Ltd. (MATL), 230 kV AC line
Proposed by Tonbridge Power Company, 2005 (MATL, 2010; MT DOC, 2010b)
Figure 6 Source: Montana Department of Commerce, Infrastructure Projects
Location: Ties into Alberta grid at a new substation
located 9 miles northeast of Lethbridge, Alberta,
Canada and runs to NorthWestern Energy‟s Great
Falls substation just north of Great Falls, Montana.
An additional substation will be constructed near Cut
Bank, Montana to provide a convenient connection
point for wind farms in that area.
Length: 214 miles
Cost: $215 million
Capacity: 300 MW bi-directional
Status: Construction began in the fall of 2010 and an official groundbreaking ceremony with
elected officials was held on October 27, 2010. Expected to be in service by mid 2011.
Description
MATL is the first privately funded transmission line, or “merchant” line, to be built in the
West (MT DOC, 2010b). It is also the first transmission interconnection between Montana and
Alberta and allows energy to flow in both directions (MATL, 2010). MATL is fully subscribed
with wind energy, with gas firming. It is under construction, but also tied up in litigation.
Similar to the MSTI project, private property owners do not want MATL on private land.
Construction began on public lands until the disputes with private landowners can be resolved.41
The Spanish wind energy developer, Naturener USA, plans to build a 309 MW wind farm
north of Cut Bank called Rim Rock that will connect to MATL. Rim Rock will create an
estimated 200 jobs during construction and 30 permanent jobs at project completion. Eager to
meet its RPS and to ensure Rim Rock‟s construction, “San Diego Gas & Electric asked the
41
McCormick, Chantel. 2010. Phone interview by author. Philadelphia, PA. November 12, 2010.
22
California Public Utilities Commission to approve its proposed $600 million financing of the
project. The CA PUC is not expected to act on the utility‟s request until next year (Dennison,
2010a).
MATL is financed in part by a $161 million ARRA loan from WAPA‟s Transmission
Infrastructure Program (TIP). It is the only project funded thus far with WAPA‟s new borrowing
authority under the federal stimulus program (WAPA, 2010).
5. Chinook Transmission Line, 500 kV HVDC line
Proposed by TransCanada, 2006 (WECC, 2009; GOED, 2009)
Figure 7 Source: Chinook Power Project, WECC Regional Planning Project Report, September 15, 2009
Location: from Harlowton, Montana through Borah,
Idaho to the Eldorado Valley south of Las Vegas,
Nevada.
Length: 1,000 miles
Cost: $3 billion
Capacity: 3,000 MW
Status: Currently searching for bids from
commercial wind companies.
Description
Formerly known as the “NorthernLights Inland Project,” Chinook is designed to ship wind
energy from Montana to markets in California, Nevada and Arizona. TransCanada is currently
searching for bids from wind companies to fill the line, but “hasn‟t received sufficient levels of
commercial interest to move the project forward” (Dunn, 2010, para. 3). “In 2006, Governor
Schweitzer signed a Memorandum of Understanding with the states of Idaho and Nevada
concerning the development of this project” (GOED, 2009).
23
6. Wind Spirit Project, 230 kV AC & HVDC collector lines, hydro pumped storage
Proposed by Grasslands Renewable Energy, 2009
Figure 8 Source: MT Office of Economic Development, Energy Promotion and Development Division, 2010 (WSP
lines in green)
Location: 6 lines proposed that all touch MT (but
serve projects in other states as well) and a pumped
storage facility on Gordon Butte, near Martinsdale in
Meagher County, MT.
Cost: Energy collection, storage and transmission
system: $3.25 billion
Capacity: 1,000 MW baseload and 3,000 megawatts
peak
Status: Grasslands has agreements with ten wind
developers who will provide wind projects varying in
size from 50 to 500 MW. The pumped storage
facility has a preliminary permit from FERC. A lease with the landowner, who owns the water
rights, is in process of being signed. A water-use permit is needed from Montana DNRC.
Description
Grasslands‟ Wind Spirit Project (WSP) is unique when compared to other proposed
transmission projects in Montana because it attempts to solve many of the great challenges of
wind development in Montana: “the long distance between wind supply and demand, the high
cost of transmission, the low capacity factor of wind, and the increasing cost of transmission.”
Chantel McCormick, Vice President of Grasslands Renewable Energy, says that “out of all the
big six transmission projects, Grasslands is the one with the best chance of moving forward and
bringing wind to MT.”42
Grasslands Renewable Energy is a small, Bozeman-based start-up company that
aggregates geographically diverse wind farms constrained by transmission and builds
transmission for them. Its Wind Spirit Project would collect power from wind farms (and other
renewable sources) in Montana, North Dakota, Alberta and Saskatchewan and feed it into a
series of three collector lines in eastern Montana. The collector lines would potentially connect
42
McCormick, Chantel. 2010. Phone interview by author. Philadelphia, PA. November 12, 2010.
24
to Colstrip and then a new transmission line would connect Colstrip to TransCanada‟s proposed
Zephyr line in Wyoming. The project is dependent upon the construction of Zephyr which
begins in Wyoming and ends near Las Vegas. Zephyr is expected to be in operation by late
2015.43
McCormick says NorthWestern Energy‟s MSTI project is flawed because it is proposed
to run through the environmentally sensitive, mountainous area of southwest Montana. She
argues that it makes more sense to develop transmission in eastern Montana and run it southward
into Wyoming. The land is flatter and more wide open in eastern Montana and less protected
than in the southwestern part of the state. Eastern Montana is also more economically depressed
so communities are more likely to embrace the economic prosperity that wind development has
to offer.44
Grasslands has agreements with ten wind developers who will provide wind projects
varying in size from 50 to 500 MW. The wind development companies work out lease
agreements with landowners to build wind farms on their properties. Then, Grasslands builds a
power generation sub-station on each property and runs a small power line from each wind farm
into a 230 kV collector system. The wind developers pay the landowners for use of their land
and pay Grasslands for use of the transmission and distribution lines it builds. A utility company
in California then buys the power from the wind developer over a long-term contract and sells it
to its California ratepayers. Ultimately, the cost of the lease, transmission and wind turbines is
all built in to each consumer‟s electric rate.45
One additional element of the WSP is described in Forbes magazine as “the linchpin of a
system that could service 3,000 MW (peak output) of wind turbines” (Fahey, 2010, para. 8). The
author is referring to Grasslands‟ incorporation of a pumped hydroelectric storage facility into its
model. One of the great challenges of generating wind energy as a purely renewable resource is
that it needs a back-up source of energy to generate a steady stream of electricity while the wind
is not blowing. The process of balancing an intermittent energy source is referred to as
“firming” and is discussed in greater detail in the next section. Wind Spirit not only firms its
wind power by aggregating wind farms from geographically diverse areas, it also uses a pumped
43
McCormick, Chantel. 2010. Phone interview by author. Philadelphia, PA. November 12, 2010.
McCormick, Chantel. 2010. Phone interview by author. Philadelphia, PA. November 12, 2010.
45
McCormick, Chantel. 2010. Phone interview by author. Philadelphia, PA. November 12, 2010.
44
25
hydroelectric storage facility to guarantee a steady stream of renewable energy to the entire
system .46
The proposed pumped storage facility, called the Gordon Butte Project, would be
developed on an expansive cattle ranch less than 10 miles from the existing transmission in
Colstrip. Grasslands would build two reservoirs, one on top of Gordon Butte and one 1,200 feet
below, each holding 1.5 billion gallons of water. A wind farm would also be developed on the
property. “When the wind is blowing strong, some of the output will power an electric motor
that will push water uphill. When the wind is weak, the motor becomes a 400-megawatt
generator as the water reverses course” (Fahey, 2010, para. 7). “Adding the cost of turbines and
financing, the system would cost $10 per watt of steady capacity... If that $10 cost proves
realistic, Grasslands could deliver wind to California at 6 cents a kwh;” California utilities
currently pay about 10 cents under a 20-year contract (Fahey, 2010, para. 9).
Option #2: Focus on Developing Wind for Montana
There are people in Montana who do not think Montana should participate in the western
electricity market. They support wind, but do not support building new transmission. They
believe that Montana should develop renewable energy for its own consumption and that other
states should do the same for their citizens.47
Linda Rogers, one of the founders of Move MISTI argues that the development of big
wind farms and transmission projects should take place closer to where the energy is consumed.
"The national grid has power generated thousands of miles away from where it's being used, and
that doesn't make sense. Small generation facilities near the point of delivery are more
economical and environmentally friendly” (Byron, 2010, para.19).
A second argument posed by those who do not want Montana to be a major wind
exporter is that the industry will come at the expense of Montana‟s traditional economic drivers,
such as farming and ranching. According to NorthWestern's MSTI application, filed with the
46
47
McCormick, Chantel. 2010. Phone interview by author. Philadelphia, PA. November 12, 2010.
Furey, Kevin. 2010. Interview by author. Helena, MT. October 8, 2010.
26
MT DEQ, “the project will disrupt farming operations in places” (Byron, 2010, para. 21). The
application states that the construction of new substations and transmission lines in Montana will
“permanently disrupt active farming operations in nearby areas, by dividing or
fragmenting agricultural fields, obstructing access, impeding the delivery and use
of water for livestock and irrigation, reducing the efficacy of windbreaks, and/or
disrupting the operation of farm equipment” and that “maneuvering harvesting
equipment around structures may be difficult” (Byron, 2010, para. 22).
Van Jamison, who works for a wind developer in Great Falls, says “to focus solely on
supplying power to Montana is „insanely parochial‟ and draws the analogy that it would be like
only producing enough cows to feed Montanans. He explains that “exporting to out-of-state
customers is part of the competitive strategy. That‟s because out-of-state markets, like
California, are willing to spend between 8 and 9 cents per kilowatt hour, compared to local bids
in the 5.5 cent range” (Halstead-Achayra, 2009).
Community Wind Projects & Distributed Energy
Most opponents of industrial wind farms and new transmission in Montana would rather
see Montana develop community wind projects. According to Chantel McCormick, Vice
President of Grasslands Renewable Energy, “definitions for „community wind‟ vary,” but “the
common theme is local ownership.” Community wind projects differ from industrial wind
projects because “local communities play a significant role in decision-making” and “landowners
can not only get turbine leases,” but can also “join the project as part owners via investment of
their wind rights or money.” The electricity generated usually serves the local community
“which can result in competitive prices and keep more money circulating through the local
economy” (2010a, p. 26). Community wind is also more efficient because it is generated very
near to where it is used and less electricity is lost in transmission. Community wind also reduces
the size and number of power lines that must be constructed.
Montana's RPS has a community renewable energy provision requiring that a portion of
the RPS be met with “small projects owned by a majority share of Montana-based businesses or
organizations” (Brouwer, 2010, para. 6). According to McCormick, the concept of community
wind hasn‟t really taken hold in Montana yet. Governor Schweitzer has focused primarily on
industrial wind projects because of all the jobs associated with them. But, two community wind
27
projects are under development now and “several new community wind projects have been
announced in the southwest and central regions” of Montana (2010, p. 26).
Community wind projects often integrate well with the distributed wind generation
model. Distributed wind energy generally refers to a network of community wind farms that all
feed into the same grid. The turbines work as an aggregate, firming and balancing each other as
the wind blows in different areas. Rep. Betsy Hands agrees that it is ideal to develop a system
based on local energy transmission. Distributed energy is empowering for communities because
it puts them in control of a shared resource. And, “it is actually safer in terms of terrorism
because there are no centralized energy generation facilities to target.”48
Part III: The Challenges and Benefits of Wind Development in General
THE GENERAL CHALLENGES OF WIND GENERATION
Separate from the enormous challenges associated with new transmission and deciding
whether Montana should become a major wind exporter, several challenges afflict Montana wind
development no matter who it‟s going to. The most obvious challenge is that wind is
intermittent, making it difficult to predict and difficult to manage. A second is that the cost of
wind is unknown. Montana wind development is also challenged by a lack of reliable data and a
lack of cohesion and coordination among stakeholders. Finally, political obstacles pose
challenges for wind developers in the state as well.
Wind is Intermittent
Wind, by nature, is intermittent. The wind blows in varying directions, at varying speeds
and sometimes not at all. Montana may rank among the top states for wind potential and #1 in
the nation for wind speeds class 3 and above (GOED, 2009), but utilities must still meet the
challenge of balancing intermittent wind flows with constantly changing demand.
Judith Gap is one of the most efficient wind farms in the country, yet still only operates at
a 40% capacity factor. That means that 60% of the time, its turbines do not produce electricity
and another form of energy must be used to back it up (Halsted-Acharya, 2009). Turbine
48
Hands, Betsy. 2010. Interview by author. Missoula, MT. October 7, 2010.
28
efficiency is also dependent upon certain wind speeds. The turbines at Judith Gap Wind Farm
start spinning at about 6 mph, power production begins at 7.8 mph and the turbines run at
maximum capacity at 33.5 mph. The turbines shut down in winds exceeding 55 mph to protect
the turbine (MT DNRC, 2010).
Utilities manage their distribution and transmission system by closely monitoring the
“load,” or demand for electricity, and adjusting the power supply to meet the demand. With
coal, gas or hydroelectric power, the power supply is generally predictable. Unless a generator
breaks down, it is generally easy to control the amount of electricity produced. Load is less
predictable because it goes up and down as people use energy differently throughout the day.
Even though utilities have 100 years of experience with predicting how much energy people use
at given times, there are always little changes that need to be monitored. Utilities have a “load
following” which is an instantaneous response that follows the increases and decreases in the
load. By law, utilities must always have the ability to generate enough electricity to meet
ultimate peak demand; it could be just one hour of one day in August, but they have to be
prepared for the huge peak in demand for that one hour when it occurs. And, not only that,
utilities must have generators in reserve in case something breaks down.49
According to Public Service Commissioner, Gail Gutsche, NorthWestern Energy has
been reluctant to move forward with wind because they are not as familiar with managing it. Its
intermittency presents a learning curve for utilities used to managing more traditional sources of
energy. “NorthWestern is still learning how wind works and what to do when there is peak
energy usage during one hot week in the summer and the wind isn‟t blowing;” or when the wind
is blowing and there is no demand.50
Former Public Service Commission staffer, Kevin Furey, also acknowledges the added
challenge utilities have with managing wind:
“With wind, utilities need to manage the load following on the usage side, but
have the added challenge of also managing the supply side. The utility never
knows how much wind energy will be generated at a given time because it is
based on wind flow. As the industry grows, utilities get better at predicting wind
flow by analyzing weather forecasts and how wind flow patterns are created by
different types of fronts. But, wind flow predictions are rarely ever perfect.”51
49
Furey, Kevin. 2010. Interview by author. Helena, MT. October 8, 2010.
Gutsche, Gail. 2010. Interveiw by author. Missoula, MT. October 7, 2010.
51
Furey, Kevin. 2010. Interview by author. Helena, MT. October 8, 2010.
50
29
Utilities use the load following to maintain system reliability. They must ensure that the voltage
does not increase or decrease too much because generators can be damaged when there is too
much, or not enough, power on the line. Also, if the voltage changes in too large of an amount,
it can cause significant damage to the facilities of large industrial customers (Furey, 2010).
“Firming” Wind
When the wind is not blowing, a utility fills in the gaps in its wind supply with a back-up
energy source to maintain system reliability. The process of backing up wind is called
“firming.” Natural gas is generally used to firm wind because, unlike coal, it can be quickly
turned up or down. According to Gail Gutsche, NorthWestern Energy promised the Montana
Public Service Commission that if it approved the Mill Creek gas plant, it would strive to pursue
more wind. “Gas prices are volatile so there is some nervousness about that, but we approved
the gas plant as a „regulating‟ plant, meaning it will only be used to firm wind.” The plant can be
retrofitted to be a load plant in the future, if needed.52
Although natural gas emits only half as much carbon as coal, it is certainly ideal to firm
wind with a carbon-free energy source (EPA, 2007). As described in Part II, Grasslands‟ Wind
Spirit Project uses pumped hydroelectric storage and wind farm aggregation to firm wind. Dr.
Steven Chu, U.S. Secretary of Energy, has frequently touted the benefits of shaping intermittent
wind energy with pumped-storage hydro generation" (Symbiotics, 2010, para. 9). Rhyno
Stinchfield, CEO of Billings-based Montana Wind Resources “sees promise as more wind farms
sprout up. Ultimately, he said, a multitude of wind farms in different locations would back up
one another” (Halsted-Acharya, 2009, section 3).
Cost of Wind is Unknown
Another general challenge for wind development in Montana is that the cost of wind is
unknown. “If wind costs ratepayers more, residents don‟t want it,” says Public Service
Commissioner, Gail Gutsche. There is a lot of argument across the board about the cost of wind.
NorthWestern Energy says the cost is too high, yet the price for wind at Judith Gap is really low.
Judith Gap proves that wind can be developed at a low cost to consumers, but NorthWestern is
52
Gutsche, Gail. 2010. Interveiw by author. Missoula, MT. October 7, 2010.
30
still in a learning-and-transition phase, and they are not convinced.53 Matt Jennings argues that
energy costs in Montana are volatile for all source of energy except for wind. "With a wind
farm, you know what it costs to operate for the next 30 years” (Dennison, 2010a, para. 25) .
Gutsche argues that if we want renewables to work, we also have to promote efficiency.
“We cannot lose sight of conservation as we are in this transition. The energy we
don‟t use is always the cheapest. If efficiency is used in conjunction with
renewable energy, it will be much more affordable. “People need to wrap their
heads around this. If we all bring our usage down by 15%, it‟s amazing what we
can save. The PSC is pushing for more efficiency and the utility is working on it.
Efficiency always costs half the price of a kilowatt hour, no matter how it is
generated.”54
Lack of Reliable Data
Arguments about the unknown cost of wind are tied in with another challenge associated
with wind development: the lack of reliable data. Wind proponents produce numbers showing
that wind is cheap while wind opponents produce different numbers showing that it is expensive.
For example, two of Montana‟s newly elected Public Service Commissioners claimed during
their fall 2010 campaigns that wind energy “is more expensive than fossil fuels like coal.” Ben
Brouwer, from Montana‟s Alternative Energy Resources (AERO) responded in a guest column,
quoting the current prices for Judith Gap‟s wind, Colstrip 4‟s coal and PPL‟s mix of coal and
hydro, proving that the wind is the cheapest option of the three. Then, John Hines,
NorthWestern Energy‟s Chief Supply Office, wrote a letter that Montana newspapers published
on Election Day questioning Brouwer‟s figures, which were obtained directly from the PSC‟s
website (Wood, 2010).
Several people who work in the energy policy and planning arena in Montana agree that
there is general lack of reliable data as well as a lot of misinformation floating around. In many
instances, the utility is the only source of information. Rep. Betsy Hands says “it‟s tough to
challenge a utility on what it says their production and demand is when all you have is the
utility‟s data; there is no way of knowing whether what they‟re saying is true.”55
53
Gutsche, Gail. 2010. Interveiw by author. Missoula, MT. October 7, 2010.
Gutsche, Gail. 2010. Interveiw by author. Missoula, MT. October 7, 2010.
55
Hands, Betsy. 2010. Interview by author. Missoula, MT. October 7, 2010.
54
31
Lack of Coordination Among Stakeholders
A third challenge for wind development is the lack of a coordinated advocacy arm and
cohesion among all the wind stakeholders in Montana. Ross Keogh from Sagebrush Energy
says, “Montana has problems with recognizing the true benefits of wind for the state. We lack
amongst interest groups a significant analytical understanding of what we need and how to
advocate for it. We lack a solid advocacy arm with the right numbers and message for wind.”56
Rep. Betsy Hands agrees. “We need to be more thoughtful in expanding renewable energy. It is
one of the top issues in Montana, but clearly we have very little agreement on energy and utility
issues.”57
Part of the lack of coordination is based on feelings of mistrust between stakeholder
groups. Their power is not balanced within in the energy policy and planning process and
relationships are stressed by past political battles. As mentioned in Part I, the WECC‟s mission
is to coordinate stakeholder groups to conduct regional transmission expansion planning. But,
critics argue that utilities are too dominant in the process. “The conversation about MSTI is
happening between PPL and NorthWestern Energy and no one else is involved. Governor
Schweitzer‟s Energy Promotion is all about promoting transmission. Therefore, the consensus
and the political direction is that we need to build more transmission.”58
Small wind energy developers and environmental advocates must have a more powerful
role in the planning and policy process. Renewable companies are innovators and leaders in the
industry, while wind development is still relatively new for NorthWestern. According to Ross
Keogh,
“we make these decisions in a policy vacuum. Right now decisions are basically
dictated by corporations, full of misinformation, are fairly hard to understand, and
are not very transparent. There is no better example of this than the deregulation
of Montana Power. It occurred with no consideration of the result to Montanans
and hundreds of millions of dollars were lost.”59
For many wind promoters, it is difficult to trust NorthWestern Energy when they spend every
legislative session arguing that “renewable energy is not reliable, not cost-effective, is too risky
56
Keogh, Ross. 2010. Interview by author. Missoula, MT. October 7, 2010.
Hands, Betsy. 2010. Interview by author. Missoula, MT. October 7, 2010.
58
Jennings, Matt. 2010. Interview by author. Missoula, MT. October 6, 2010.
59
Keogh, Ross. 2010. Interview by author. Missoula, MT. October 7, 2010.
57
32
to integrate, and is going to cost Montanans more.” It is difficult to trust that NorthWestern
wants wind development now and that we should join them in advocating for MSTI.60
According to Matt Jennings, who has worked both the policy and small business side of
wind energy development, a shift in power is reliant upon better coordination between the
environmental policy advocates and renewable energy developers.
“We need to bridge the communication gap between the business community
working on renewables and the environmental community. For example, at the
Northwest Energy Coalition conference this year, 30 environmental groups were
there discussing legislative strategies for promoting renewable energy and I was
the only one there from a renewable energy company. They were discussing the
issues in an abstract world without the „jobs and business‟ end of it represented.
That is going on at the federal level too.”61
The ultimate goal of leading a more coordinated effort is, of course, to build the best system
possible for Montana. “Keogh sees a critical need for a coordinated, regional plan to balance
power, including the West's vast wind resource, across the grid. The alternative is an erratic
power supply that increases the risk of outages and damage to equipment, he said” (HalsteadAcharya, 2009, balance of power section, para. 3).
Better coordination and cooperation is also needed on the regional level where existing
transmission could be used better, but states and transmission companies are too competitive
with one another. The electricity industry is about profits first and what is best for the region is
not the top priority. For example, if Bonneville Power Administration (BPA) connected one of
their lines in Oregon into California‟s system, Montana could send wind energy to places to like
Sacramento and San Francisco. “If you did that you could get a flow of power so wind in the
northwest would be balanced with solar in the Mojave Desert and geothermal in California. But
they don‟t do it because everyone has their turf.”62 In a perfect world, Betsy Hands says that
politics and competition would not be a part of the process. “We all have to realize that we need
the most integrated and efficient system, which means putting your state‟s political agenda aside
and doing what‟s right for the country. But that‟s never going to happen.”63
60
Keogh, Ross. 2010. Interview by author. Missoula, MT. October 7, 2010.
Jennings, Matt. 2010. Interview by author. Missoula, MT. October 6, 2010.
62
Jennings, Matt. 2010. Interview by author. Missoula, MT. October 6, 2010.
63
Hands, Betsy. 2010. Interview by author. Missoula, MT. October 7, 2010.
61
33
Political Challenges
Political obstacles create great challenges for wind development in Montana. Within the
state, many Republican legislators object to wind. They argue that it is more expensive, that it‟s
wrong to have a government mandated RPS, and that government subsidies block the free
market. Of course, they completely disregard the fact that wind in Montana is cheaper than
fossil fuels and that the federal government subsidizes fossil fuels.64 But, Matt Jennings feels
that Democrats and Republicans are equally to blame. Republicans may not like renewables
from a free market perspective, but Democrats are failing at making the right arguments; it is
their battle to lose. Democrats need to get the business community involved and make this about
economic development.65
There are political obstacles to Montana wind development at the federal level too. In
Matt Jennings‟ opinion, renewable energy policy at the federal level is failing for a couple of
reasons. First, in his opinion, the Department of Energy (DOE) is run by a bunch of scientists
focused on researching nuclear waste disposal who have no sense for what it takes to build a
winning political strategy for renewables. If the DOE wants to move a renewable energy agenda
forward, it needs to partner with the private renewable industry sector and let the business side
drive the energy policy discussion.66
According to Jennings, Democrats in Congress have the right intentions, but are poor at
execution. For example, President Obama and the Democratic controlled Congress dedicated
$200 million in stimulus funds for renewable energy development. But, instead of boosting the
renewable economy, they “created huge, lengthy, burdensome grant programs that take two
years to process.”67 Policy-makers need to consult with the renewable business community so
that grants better support the real-world ideas it has to offer.
Another example of poor execution on the part of the Congressional Democrats is with
the most recent federal climate change legislation. Jennings worked on energy policy for U.S.
Senator Jon Tester. He says the last federal energy bill failed because “there was a lot of bad
strategy and they failed to have a plan B.” The renewable business community should have been
64
Furey, Kevin. 2010. Interview by author. Helena, MT. October 8, 2010.
Jennings, Matt. 2010. Interview by author. Missoula, MT. October 6, 2010.
66
Jennings, Matt. 2010. Interview by author. Missoula, MT. October 6, 2010.
67
Jennings, Matt. 2010. Interview by author. Missoula, MT. October 6, 2010.
65
34
involved in the strategy and they lost on an economic argument as a result. It should have been a
bi-partisan bill, there should have been room for compromise and the bill should never have been
put up for a vote in the Senate committee when it was sure to lose on the floor.68
THE GENERAL BENEFITS OF WIND GENERATION
Although wind development in Montana faces challenges, it also brings many powerful
economic, environmental and social benefits. Wind development creates jobs, generates tax
revenue and landowner revenue, and creates price stability for consumers. From a social
perspective, wind development enhances energy independence and national security, provides
revenue for schools, and encourages local ownership. Environmentally, wind energy reduces
greenhouse gas emissions, promotes clean air and water, reduces the need for mining and
mining-related operations, and preserves land and the visual aesthetics of the state.
Economic Benefits
Wind energy development in Montana creates highly-skilled jobs and stimulates
economic growth in rural communities. For every one megawatt of capacity installed, 22 direct
and indirect jobs are created: 5 for installation and 17 in manufacturing (National Wind, 2010).
Today, nearly 400 American manufacturing facilities make wind components. According to the
International Trade Commission (ITC), “less than 5% of the value of turbine parts used in the
U.S. is imported from China. General Electric, the turbine supplier for Judith Gap, is the number
one wind turbine manufacturer in North America” (McCormick, 2010b).
A typical 100 MW wind farm creates100 to 155 construction phase jobs and 10 to 11
permanent jobs, normally lasting 20-25 years. The 140 MW Judith Gap Wind Farm employs 12
full-time staff and 75% of its construction costs went to Montana-based contractors. “Glacier
Wind phases 1 (106.5 MW) & 2 (103.5 MW) each generated 150 construction jobs and each
currently employ 10 full-time staff” (McCormick, 2010b). Developing 1000 MW of wind power
in Montana would create between 1,000 to 1,550 construction phase jobs and over 100
permanent jobs. If all six of the proposed transmission projects outlined in Part II are developed
in Montana, over 11,500 jobs throughout the state (MT DLI, 2010).
68
Jennings, Matt. 2010. Interview by author. Missoula, MT. October 6, 2010.
35
Wind farms also inject significant tax revenue into local communities. Montana‟s
property tax rate for wind farms larger than 1 MW is 3%. Generators under 1MW are property
tax exempt. The revenue generated flows to local communities, helping build new schools,
roads, bridges, and other infrastructure (McCormick, 2010b). For every 1,000 MW of wind, $5
million to $10 million is generated in annual property tax payments (Costanti and Beltrone,
2010).
Electrical transmission projects also generate significant long-term tax revenue for
Montana counties. The Montana Department of Labor and Industry estimates that the six big
transmission projects proposed in Montana would have a total economic impact of $1.3 billion
on Montana‟s economy (Wagner, 2010). There is a 3% property tax on lines transmitting wind
energy and a 12% property tax on lines transmitting non-renewable energy. Montana levies an
additional tax on electricity generators called the Wholesale Energy Tax (WET) at a rate of
$0.00015 per kilowatt hour. The WET is levied on generators if the power is leaving the state
and on electricity distributors if the power is delivered within state (Severtson, 2010). The WET
will generate over $400,000 for Montana‟s general fund annually per 1,000 MW of wind
developed (McCormick, 2010b). Finally, Montana‟s corporate income tax rate on companies
owning transmission lines is 6.75% (Severtson, 2010).
In addition to generating tax revenue for state and local services, wind farms also provide
economic benefits for farmers and ranchers who lease their land for renewable projects.
Landowners generally receive annual per megawatt payments for each wind turbine on their
property and earn a typical rate of $4,000 to $10,000 per turbine per year ($2,000-$5,000 per
MW). This allows them to continue harvesting their traditional agricultural resources and use
their land to bring in an additional source of income. For every 1,000 MW of wind, $4 million to
$10 million is generated in annual lease payments (Costanti and Beltrone, 2010).
A fourth economic benefit provided by wind farm development is price stability for
consumers. The price of fossil fuels has fluctuated immensely in the last several years. Wind
power offers a stable, fixed rate and is free (National Wind, 2010). When compared with fossil
fuels, “wind provides much greater long-term price stability for utility customers, simply because
there is no fuel supply cost. Prices for finite supplies of coal and natural gas are notoriously
volatile and will only rise as global energy demand grows” (Brouwer, 2010).
36
Social Benefits
One of the great social benefits of developing wind energy is that it reduces dependence
on fossil fuels, both domestically and internationally, and increases national security. Wind
energy does not require mining or transportation to continue fueling it because it is fueled by a
native, renewable source of energy. If the nation fully developed its capacity for wind, $20
billion worth of oil could be saved each year. That is equal to the world‟s current production of
oil. Also, as discussed earlier, distributed wind generation helps safeguard from potential
terrorist threats to centralized energy generation facilities (National Wind, 2010).
A second social benefit of developing wind energy in Montana is its support for schools.
Montana owns 5.1 million acres of "school trust lands.” Wind developers who lease school trust
lands pay a portion of their revenue to public education. According to the Montana Department
of Natural Resources and Conservation “Montana K-12 schools receive about $60,000 annually
from the 640 acres of trust lands at the Judith Gap Wind Farm” (Clean Energy Pioneers, 2010,
para. 9).
Local wind project ownership also produces great social benefits for Montana
communities. As discussed previously, Montana's RPS has a community renewable energy
provision requiring that a portion of the RPS be met with “small projects owned by a majority
share of Montana-based businesses or organizations” (Brouwer, 2010, para. 6). Locally owned
wind farms are price-competitive, more efficient and require less transmission infrastructure.
They are responsible for “higher job creation, worker pay, local project value, local spending, as
well as project returns” (Costanti, 2004).
Environmental Benefits
The development of wind energy in Montana has tremendous positive impacts for our
planet. According to the National Renewable Energy Laboratory (NREL), “for each 1,000 MW
of wind power Montana produces, 2.9 million tons of C02 emissions will be averted annually”
(Clean Energy Pioneers, 2010, para 6).
Wind energy development protects Montana‟s land, air and water from nonpoint source
pollution because wind turbines do not emit pollution of any kind. The use of wind farms also
37
reduces pollution that would otherwise be associated with the mining and processing operations
necessary for fossil fuel development.
Wind farms also protect open space and the aesthetics of the landscape because they can
be spaced apart over large geographic areas, deterring other forms of development. Many people
feel that modern wind turbines are “elegant, beautiful sculptures that are striking and aweinspiring” (National Wind, 2010, land preservation and visual aesthetics section, para. 2).
Wind development also helps to conserve water. “For each 1,000 MW of wind power
Montana produces, 1.2 billion gallons of water will be saved” (Clean Energy Pioneers, 2010,
para.6). And, 600 times more water is needed to produce electricity with nuclear power and 500
times more water is needed to produce electricity with coal, than with wind (National Wind,
2010).
Finally, wind farms can have significant impacts with sensitive wildlife, but they are
fairly easy to mitigate. According to Montana Audubon,
“the problem with wind farms is straightforward: if farms are located in areas
heavily used by birds, such as a migration flyway or on a nesting area for rare
species, lots of birds are unnecessarily killed each year. However if these areas
are avoided, bird deaths are not a problem” (Montana Audubon, 2010, para. 1).
Part IV: What is needed in addition to wind to reduce global warming?
Unfortunately, even if Montana builds all six proposed transmission projects and
becomes a major wind exporter to California and the Southwest, it will still not be enough to
slow climate change. America must participate in a significant overhaul in the way we generate
and use electricity. Several policies and changes can be made to the current system to steer
movement in the right direction. In this final section, a few local Montana energy professionals
share their vision of what is needed, either to further promote wind or in addition to wind, to
reduce carbon emissions and hopefully slow the affects of climate change before it is too late.
National Policy
As people experienced with state and federal energy policy, Matt Jennings and Kevin
Furey had a few national policy ideas to share that would help streamline renewable energy
38
development and move the country toward a cleaner energy future. First, as discussed in the
previous section, wind developers are too dependent on the federal renewable development tax
credit and live in a constant state of flux with investors from year to year, waiting for its renewal.
Jennings believes that Congress should pass a long-term extension of the renewable development
tax credit program, with a phase-out. This means that Congress will know how much the tax
credit will cost the federal government each year and the wind industry will know how long the
credits will last. For example, the credit could decrease by a dollar each year until it reaches
zero.69
Second, the nation needs a national renewable portfolio standard (RPS).70 Currently, 29
out of 50 states have their own RPSs. Each state‟s rules are slightly different, creating
geographic barriers and unnecessary complexity for regional transmission planning. A national
standard will provide uniform rules and save utilities $14 billion. It will create more jobs, jumpstart the manufacturing industry and speed up investment in critical transmission infrastructure
and system upgrades (Cooper and Savacool, 2007).
Third, something has to be done at the national level about transmission. America is
heading toward a new energy future and must have the right infrastructure to support it. New
transmission is so costly and so permanent that planning must be done; and done right. New
transmission must accommodate a visionary perspective and create a pathway toward renewables
and efficiency and away from fossil fuels. Kevin Furey thinks we may need “an interstate agency
for transmission where the federal government builds a backbone transmission system from the
Midwest and West to the load centers on the East and West Coasts.”71
Smart Grid
Kevin Furey feels that, in addition to developing wind and other renewable resources, it
is critical that we realize a vision of implementing a national smart grid. As we move into a
more technology-savvy era, our patterns of energy use (the load) are becoming less and less
predictable. But, the big increases and decreases during peak use are still predictable. For
example, people wake up in the morning and use lots of energy (high demand), then there is mid69
Jennings, Matt. 2010. Interview by author. Missoula, MT. October 6, 2010.
Jennings, Matt. 2010. Interview by author. Missoula, MT. October 6, 2010.
71
Furey, Kevin. 2010. Interview by author. Helena, MT. October 8, 2010.
70
39
level of usage during the day, and then everyone goes home at night and uses a lot of electricity
again until they go to bed. Over the middle of the night there is very little usage (low demand).72
The idea of the smart grid is that people will level out the little increases and decreases in
their electricity use if given the proper incentives. The smart grid simply allows the market to
rule. Each household would have a meter in it allowing residents to see how much they are
paying for electricity each hour so they can decide if they want to run their dishwasher at 7 pm or
1 am. Electricity prices would be based on demand and would change throughout the day based
on their hourly value. Energy used during peak hours would cost more than energy used at lowuse hours. Power could be free in the middle of the night if there‟s no load. And, on a really hot
day in California, consumers would see that it costs $1.00 per kilowatt hour (very expensive) to
blast the air conditioner at 55 degrees in the middle of the afternoon.73
Ross Keogh also envisions a smart grid “which could tap into the latest and best
technologies.” In addition to being provided with “instant information on the cost of the
electricity… he also envisions „smart‟ appliances that could switch to a dormant mode when
demand peaks and cost rises. Those are the little tweaks that will be really important when we
reach 30 to 40 percent wind generation” (Halstead-Acharya, 2009, by pulses and spurts section,
para.10).
A second vision for utilizing the smart grid, which would have major impacts for curbing
climate change in the U.S., is for electric vehicles to allow for energy storage. Consumers could
purchase electric vehicles that would both feed electricity from the battery into the grid and
charge the battery by siphoning electricity off the grid. This would allow consumers to be a part
of the smart grid and actually play the energy market. For example, a person who owns an
electric vehicle could charge his vehicle at night when energy prices are low. Then, in the
morning or evening, he could plug in again and feed energy to the grid while energy prices are
high.74
72
Furey, Kevin. 2010. Interview by author. Helena, MT. October 8, 2010.
Furey, Kevin. 2010. Interview by author. Helena, MT. October 8, 2010.
74
Furey, Kevin. 2010. Interview by author. Helena, MT. October 8, 2010.
73
40
Efficiency Programs
There is considerable potential in energy efficiency and conservation that we should take
advantage of. “We should try to do the small things first, before making a mad rush to build new
transmission,” says Kevin Furey. But, unfortunately, “that is unlikely to happen because there is
not a lot of money to be made in energy efficiency by big corporations, and small distribution is
not as widespread and aggressive as the wind and the transmission industry wants.”75 According
to the Regulatory Assistance Project, “the amount of energy efficiency potential in the electric
sector, even if vigorously pursued, represents only a fraction of future loads.” And, “despite the
significant potential for cost-effective investments in energy efficiency, there are still reasons to
question whether that potential will be fully realized” (Allen, 2010). “Ultimately, we have to do
all of it: new transmission, a smart grid, efficiency, and all the small stuff,” says Furey.76
Distributed Energy
According to Pennsylvania "Energy Czar" Daniel J. Desmond,
“we need smaller scale residential and business site generators that are connected
to the local distribution lines... The energy economy of the future needs a vastly
greater number of players participating in a distributed grid and supply network.
If we had policies that encouraged the growth of distributed power systems then,
when it came time to say, well, do we need a new transmission line, which
nobody wants? We don't need to invest so much money in transmission
infrastructure… If we have better investment in distributed energy, we could
minimize or even eliminate the need to build new power lines” (Smith, 2010,
While our security is based... section, para. 3).
Conclusion
Montana has made great strides with wind development in the last five years. But the
looming philosophical question remains: do we move ahead with building the transmission
necessary to develop Montana‟s enormous wind potential for out-of-state markets? Or, do we
focus on building a distributed network of wind farms so Montana communities can power
themselves and forgo building major, long-distance transmission projects? As Gail Gutsche
emphasizes, public meetings need to be held to fully educate Montana citizens about what this all
means and what the consequences are on both sides for Montanans and for our planet. Building
75
76
Furey, Kevin. 2010. Interview by author. Helena, MT. October 8, 2010.
Furey, Kevin. 2010. Interview by author. Helena, MT. October 8, 2010
41
new transmission serves the renewable portfolio standards of other western states and improves
some level of reliability for Montana. But, it also presents significant challenges associated with
cost and line placement. Property owners must be honored and compensated appropriately for
taking transmission lines onto their property. As Rep. Betsy Hands suggests, community trusts
should be established so landowners can collectively bargain with utilities for the best possible
compensation for themselves and their communities. Aside from issues related to new
transmission, developing wind in general poses its share of challenges and benefits. Wind is
difficult to manage, the cost is unknown, there is a lack of reliable data, a lack of cohesion and
coordination among stakeholders, and political obstacles. But it also presents exciting
opportunities for economic growth, environmental protection, and social benefits. Once again,
Montana stands at the precipice of developing another one of its vast natural resources. But this
time, instead of coal or copper or old growth forests, its resource is wind; clean, free, unlimited
wind - a resource that could potentially save the glaciers and our planet.
42
Contributing Personal Interviews
Kevin Furey
Foreign Service Officer, U.S. State Department
Kevin Furey served in the Montana State Legislature from 2004 to 2007. He then served as a U.S.
Army Civil Affairs Officer in Operation Iraqi Freedom from 2008 to 2009. Furey served as an
Energy Development Officer for the Montana Department of Commerce Energy Promotion Division
from 2008 to 2010. He served as a Rate Analyst for the Montana Public Service Commission where
he researched alternative energy and energy efficiency for the Public Service Commissioners.
Currently, Kevin is Foreign Service Officer with the U.S. State Department.
Gail Gutsche
Montana Public Service Commissioner
Gail Gutsche served in the Montana State Legislature from 1999-2005 where she served two
sessions as Vice Chair of the Natural Resources Committee. Gutsche was elected to the Montana
Public Service Commission in 2008 and became the second woman to be elected to the position.
Her current PSC term ends January 2013. For 12 years, Gutsche was co-owner of a Montana-based
canoe-touring business and has a lengthy background in journalism and publishing where she has
worked as an editor, writer, and advertising sales representative.
Rep. Betsy Hands (HD 99)
Montana State Legislature
Betsy Hands has served in the MT State Legislature since 2007. She is the former the
Executive Director of HomeWORD, a non-profit community housing organization,
and most recently participated in a fellowship with the Western Governors‟
Association.
Matt Jennings
Student, University of Montana School of Law
Matt Jennings has 10 years of experience in government affairs and energy policy. He was an Aid in
the Montana Legislature in 2005 where he worked on the passage of Montana's renewable portfolio
standard and tax incentives for renewable energy. He then served as Legislative Assistant to U.S.
Senator Jon Tester where he worked on the Energy Independence and Security Act of 2007 and the
Lieberman-Warner climate legislation. In 2009 Jennings served as Government Relations Director
for Grasslands Renewable Energy, based in Bozeman, Montana. He now attends the University of
Montana School of Law where he is focused on utility regulation and energy siting .
Ross Keogh
Principal Planner and Analyst, Sagebrush Energy
Ross Keogh has served for four years as the principal planner and analyst for Sagebrush Energy,
which is a renewable energy development and consulting company. Mr. Keogh is also involved
in several transmission and planning working groups related to renewable energy transmission
and integration in the inter-mountain west. The focus of his development work has been in
Idaho and Montana. Sagebrush Energy recently supported the Utah Associated Municipal Power
Systems in their development of the Horse Butte Wind Farm in Bonneville County, Idaho which
began construction in the 4th quarter of 2010.
Chantel McComick
Vice President, Grasslands Renewable Energy
Chantel McCormick is the Vice President of Grasslands Renewable Energy. Before that, she
served as the Senior Energy Development Specialist for the State of Montana during three
years of the Schweitzer Administration.
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