Montana Consumer Counsel, others: NorthWestern should provide more information

NWE said application is comprehensive, parties just need to sign NDAs

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NorthWestern Energy needs to provide more information about the bids it rejected and their costs to customers before its application to build a power generation station can be evaluated, according to formal comments filed on the proposal pending with the Montana Public Service Commission.

“The Commission’s minimum filing requirements are designed to ensure that the Commission and interested parties have essential context for their evaluation of a utility’s application for pre-approval of electricity supply resources,” said a filing by the Montana Environmental Information Center and Sierra Club. “To comply with these requirements, NorthWestern must make available price terms and other information related to the 2020 RFP (request for proposal) bids … which are a key component of NorthWestern’s application.”

NorthWestern, though, said it has filed an exhaustive application, and all the details on bids will be available to interested parties once the PSC deems them intervenors and they sign nondisclosure agreements. The PSC regulates monopoly utilities in Montana.

“All the information is available to the intervenors approved by the Montana Public Service Commission who meet their obligation to sign NDAs,” said NorthWestern spokesperson Jo Dee Black. “And that protects the competitive and proprietary information of the bidders that weren’t selected.”

Ensuring confidentiality means getting the best deal for customers, Black said; some companies won’t bid on an RFP if their financials or trade secrets aren’t protected, and the 180 proposals NorthWestern received in its recent RFP is “a competitive field.” Plus, it’s early in the process.

“More information will be accepted by the PSC, and there’s discovery that goes back and forth between the parties and us,” Black said.

In order to shore up its energy capacity, the monopoly utility issued a request for proposals in 2020 and received proposals from 21 parties. Last month, NorthWestern submitted an application to the PSC to build a $250 million natural gas fired plant in Laurel and enter into a contract for battery storage.

The Laurel plant would add 175 megawatts to the utility’s portfolio, and NorthWestern aims for it to be online by January 2024. In its application, NorthWestern notes it has 837 megawatts to address a peak load of 1,200 megawatts, leaving at least a 363 megawatt deficit.

The Montana Consumer Counsel; MEIC and Sierra Club; and NW Energy Coalition and Renewable NorthWest are among the groups asking the Public Service Commission to order NorthWestern Energy to provide details on the rejected bids and also make sure the clock on a decision doesn’t start ticking until more information is available.

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The Montana Consumer Counsel said NorthWestern not only hasn’t provided enough information for an analysis of the RFP process, it has not asked in a timely fashion for protective orders, which would make relevant material available to parties that sign NDAs. For example, the Consumer Counsel said NorthWestern redacted the final ranking of bids.

“Such redactions inhibit the parties’ ability to replicate, or to verify, the basis for, NorthWestern’s conclusion that the Laurel Generating Station and Beartooth battery are the most cost-effective resources when compared to other alternatives,” said the filing signed by Montana Consumer Counsel staff attorney Jason Brown.

The NW Energy Coalition and Renewable NorthWest also asked the PSC to request more specifics from NorthWestern to ensure the plan for Laurel is indeed “in the public interest.” The filing also said the utility didn’t, but should, get approval for its purchase of the Byron Pipeline, which will serve the Laurel project.

“(The application) fails adequately to explain differences in cost and other ‘relevant functional differences’ between the proposed resource acquisition and the cost of each alternative … and the application fails to compare bids … and as a result, fails to provide adequate justification for the choice made,” said the advocacy groups.

The MEIC said the Commission hasn’t yet issued protective orders for all of the bids, and NorthWestern hasn’t yet provided price terms and other information. So the timeframe for a final decision shouldn’t start until all the information is available, subject to protective orders, the MEIC said.

In a phone call, the MEIC’s Anne Hedges also said in this case, it’s important for customers — not just attorneys under NDAs — to be able to scrutinize the proposal.

Up until now, she said, NorthWestern has filed applications for smaller facilities or for acquiring more of an existing facility.

“This is where they’re going to be building something brand spanking new,” Hedges said. “It is large. It is going to cost customers for decades to come. And it’s upward of $300 million (with all in costs).”

In other words, the project comes in at roughly one third of the cost of the dams purchase, she said. She said the commitment is huge, and customers deserve to have as much information as possible, such as an appraisal, comparisons and alternatives.

“Was there something that was less expensive both in the short term and in the long term?”

Companies want to protect proprietary information, she said, but she believes there’s a way to provide the public with more detail and not compromise secrets of private entities.

“Absolutely there’s a way to do that. We just have to try,” Hedges said.

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PSC staff attorney Lucas Hamilton said commissioners will decide by July 2 if NorthWestern’s application is sufficient. He said it’s normal for interested parties and commissioners to request additional materials, but asking for more information is different than finding a docket “inadequate.”

“That’s really what the threshold question is. Do we have enough information to say the filing itself is adequate?” Hamilton said.

As part of the process, he said the Commission solicits objections to requests for protective orders, and parties that don’t believe certain information should remain private can file an objection. To date, he said, no one has made such an objection.

Hamilton said the agency is still fielding questions and comments, but it has sought to offer interested parties an ample chance to review the application.

“We as a commission have really focused on trying to provide, in advance, as much opportunity as possible for our intervenors to get in early in this process and to look at the application critically and evaluate it in relation to our procedural rules about minimal filing requirements,” Hamilton said.

NorthWestern’s Black said she hopes the docket can proceed without delay, especially given the utility’s exhaustive RFP was publicly available for more than 18 months.

“NorthWestern Energy’s portfolio serving our Montana customers is critically short of capacity to meet peak demand,” she said. “It’s in the best interest of our customers, for both price and reliability, for this process to move as efficiently as possible.”