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BPA policies work against Montana wind energy

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Earlier this month, NorthWestern Energy officially dedicated its new 40-megawatt wind farm, Spion Kop, near Great Falls. The wind farm is already exceeding expectations and NorthWestern Energy deemed it a “phenomenal” energy resource providing cheap, clean energy for thousands of Montana households.

Energy from the wind farm will cost approximately $54 per megawatt-hour, nearly $10 per megawatt-hour cheaper than NorthWestern’s Colstrip coal energy. Spion Kop also exemplifies Montana’s famously constant and energetic winds, exceeding the productivity of wind farms in other states.

Spion Kop’s success is a timely reminder of Montana’s ability to contribute to the nation’s clean energy needs. Montana could potentially supply thousands of megawatts of cost-effective, clean energy to the Pacific Northwest, California and the Southwest.

Today, Montana exports nearly half of all the electricity we produce. Most of our exported energy comes from coal plants. But coal’s contribution to the electric grid is facing new scrutiny as we are forced to confront climate change.

In fact, just last month President Obama announced his plan to reduce greenhouse gas emissions from existing coal facilities – a necessary step to combat climate change. Given the president’s plan, Montana must actively replace coal exports with new renewable energy or we will lose the broad economic benefits we currently enjoy from energy production.

That is why anyone interested in economic opportunity for Montana should be concerned with the Bonneville Power Administration’s transmission policies.

BPA is a federal agency within the Department of Energy that controls much of the region’s transmission system. Last week, BPA upheld a discriminatory transmission fee that charges Montana energy generators 50 percent more to travel across BPA’s transmission network than any other Pacific Northwest state. The fee is essentially a tax on Montana energy to travel across a 90-mile section of the Colstrip transmission line, while energy traveling across the other 14,000 miles of BPA’s network is not subject to this extra charge. The fee is so uneconomic that it has resulted in 184 megawatts of transmission capacity being left unutilized for more than 20 years.

If this unnecessary fee were removed it could allow for the development of a 184-megawatt wind farm, earning BPA additional revenue, and creating $389 million in investment, 369 construction jobs and 24 permanent jobs in Montana. Removing this fee would be a zero-cost way to create economic opportunity for Montanans.

In addition to its discriminatory rate treatment of energy from Montana, BPA is dragging its feet on a transmission upgrade that would present tremendous economic opportunity.

Earlier this month, Sen. Max Baucus, D-Mont., urged Obama to direct BPA to speed up a proposed upgrade of the Colstrip transmission line (a priority he and other Montana political leaders have communicated to BPA). The upgrade project would add 600 megawatts of capacity with no new wires or transmission footprint. With the upgrade, wind energy from Montana could access West Coast markets.

The upgrade would cost hundreds of millions of dollars to complete, which is a steal of a deal in the transmission world. But if BPA won’t take a zero-cost approach to utilizing 184 megawatts of unused capacity by eliminating the discriminatory fee, one must question if the agency will ever spend real money to allow 600 megawatts of Montana wind into West Coast markets.

Montana wind power would be a hot commodity in the West if it were granted fair access to markets. The state’s wind is stronger and steadier than the winds elsewhere. And our wind matches up well with the needs of the region, tending to blow at times of day and year when energy demand is great.

Federal policy goals on transmission are clear: Our existing infrastructure should be optimized and fully utilized. BPA should reconsider its discriminatory rate treatment of Montana’s wind energy and it should move forward on upgrading existing transmission.

If Montana wind continues to be denied fair access to energy markets, our energy-dependent economy may be at risk.

Jeff L. Fox is the Montana policy manager for Renewable Northwest Project, a nonprofit regional advocacy group promoting environmentally responsible renewable energy resources.

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