Monday, March 04, 2024

Cold snap fuels Montana’s coal power debate

The record-breaking cold snap Montana saw this month brought days of below-zero temperatures across the state — and with them what major Montana utility NorthWestern Energy said was record-high electric demand from its customers.

The arctic blast, and how the state’s energy system responded, triggered a wave of analysis from folks engaged in Montana’s running debate over renewable energy, coal generation and the future of the state’s electric grid.

The Montana Environmental Information Center, for example, posted a video to Instagram on Jan. 12 citing data from the U.S. Energy Information Administration to push back on NorthWestern’s longtime assertion that it can’t reliably supply Montanans with winter power without maintaining coal-powered generation.

The data, noted MEIC co-director Anne Hedges, showed that coal generation had dropped by about half on Jan. 7, a shift she interpreted as a sign of trouble at the Colstrip power plant. Wind generation, she noted, surged over much of the subsequent three days.

“During the coldest part of the year, half of the largest plant in the western United States is not working — but yet the grid hasn’t collapsed, our lights turn on, so perhaps we need to start rethinking our connection to coal,” Hedges said.

For its part, NorthWestern pointed in a Jan. 17 press release to a later, colder stretch of the cold snap, stressing that it had relied heavily on Colstrip, natural gas plants and hydroelectric dam generation to keep electricity flowing to Montana customers. “Wind and solar generation could not produce much, if any, power during the extreme cold,” wrote NorthWestern spokesperson Jo Dee Black.

In a follow-up email, Black said the decline Hedges noted was the result of Colstrip’s operators bumping up planned maintenance in one of the power plant’s two operational units so both units could operate through the most extreme stretch of cold.

Black also wrote in her initial release that additional generating capacity, like the natural-gas generation plant the company is building near Laurel or the expanded Colstrip stake the company plans to acquire in 2026, would have allowed the company to avoid spending $18 million on energy from other utilities during the cold snap.

Travis Kavulla, a former Republican member of Montana’s utility regulation board who now works as the vice president of regulatory affairs for Houston-based energy company NRG, took to Twitter to critique that latter argument, saying that it’s not necessarily a bad thing for Northwestern to be partially reliant on power purchases — provided the company is smart about how it manages that trading.

“It cannot be expected that Montana would have every single megawatt of capacity it needs to supply the state during the absolute worst hour of the decade. If Montana did, that would mean customers would be paying an absolute fortune,” Kavulla said in a subsequent interview.

Kavulla and other energy analysts routinely note that regulated utilities like NorthWestern have a financial incentive to own and operate as much generating capacity as possible since they typically earn a profit on the infrastructure they own. That dynamic is often criticized as promoting the over-construction of expensive generating plants while discouraging utilities from finding cheaper ways to serve their customers.

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