Future resource planning by Puget Sound Energy and Portland General Electric seem to signal that the long-awaited promise of Montana wind power may finally come true.

Three Montana wind proposals have survived the first round of cuts in PSE’s current request for proposals for generating resources according to information provided to Clearing Up by PSE, while PGE’s draft integrated resource plan identified Montana wind as a least-cost option, cheaper even than a natural gas-fired power plant.

Factors favorable to Montana wind projects have been aligning in recent years, and developers are not wasting time. They are dusting off proposals previously put on hold and beating the brush looking for new potential sites.

As utilities in Washington and Oregon accelerate their exit from coal-fired generation, Montana wind power is an increasingly attractive option. However, significant challenges remain. Foremost are NorthWestern Energy’s high transmission rates and the region’s reliance on bilateral contracts. Both could be economic drags on development.

Montana wind power’s benefit to Northwest utilities is well understood. The wind blows hardest in Big Sky Country in the winter, when the need is greatest in western Washington and Oregon.

It offers far more benefit to the Northwest power supply than wind power in the Columbia Gorge and even solar generation.

Its benefit to the regional system in the winter is roughly twice that of solar, according to analysis by the Northwest Power and Conservation Council for the Seventh Power Plan, which measured resource value in terms of its capacity factor and how much flexibility it adds to the Northwest’s hydroelectric system.

Despite that value, it makes up only about 10 percent of installed wind capacity in the region. Transmission capacity constraints and high transmission costs have long hampered development of Montana wind power. That percentage almost certainly will significantly increase in the next decade.

Puget Sound Energy’s current competitive solicitation for new generation resources and PGE’s draft IRP both underscore the increasing value Montana wind can offer to utilities further west (CU No. 1903 [12]).

PSE received nearly 100 proposals for new resources, including six from Montana developers. The utility has winnowed the list down to 23 proposals. So, while roughly one out of every four proposals survived PSE’s initial analysis, half of Montana wind proposals advanced.

Clearing Up was allowed to view the RFP responses in person at PSE headquarters in Bellevue, Wash., but the company declined to comment on the bids.

“We are near the end of our evaluation process and close to making a short list,” PSE spokesman Andrew Padula told Clearing Up. “Unfortunately, we won’t be able to discuss who made the short list and typically don’t make any public announcements until after all contracts are signed.”

The three Montana wind proposals are all substantial projects, according to the information from PSE. One project is a 300 MW wind farm to start commercial operation in 2020. The other two have 2022 dates for coming on line; the capacity of one is 400 MW, and the other is between 200 MW and 300 MW.

The Clearwater Wind Farm project and a wind farm on the Northern Cheyenne Indian Reservation just south of Colstrip could be among the three proposals, according to people familiar with wind development in Montana.

Orion Renewable Energy Group is developing the Clearwater Wind project. The company has proposed a facility with up to 750 MW nameplate capacity north of Colstrip. It currently is first in NorthWestern Energy’s interconnection queue. That request was submitted in 2015, and the project has progressed with starts and stops since then. However, it appears to be gaining momentum. On July 29, the Rosebud County Commission had a special meeting scheduled to discuss a tax abatement requested for the development.

“A tax abatement is typically requested toward the tail end of a development schedule,” noted Anne Hedges, executive director of the Montana Environmental Information Center.

It is unlikely Orion would have asked for the tax break if it was not optimistic that it is close to finalizing a contract for the project, she said.

Orion Renewable Energy Group did not reply to a request for comment.

If PSE went ahead with a Montana wind project, it could move the output over capacity it owns on the Colstrip Transmission System, which connects the coal-fired power plant into the Northwest grid. Puget Sound Energy has 50/50 ownership of the 614-MW Colstrip units 1 and 2 with Talen Energy.

In June, Talen announced that the 40-year-old twin 307-MW boilers would shut down at the end of the year. That will free up 300 MW of capacity owned by PSE on the Colstrip Transmission System (CU No. 1906 [9]). Puget Sound Energy did not comment when asked if it is willing to use that capacity for a long-term contract allowing wind power to move west out of Montana.

NorthWestern Energy owns the other half of the CTS capacity currently subscribed to moving Colstrip output westward.

However, NWE declined to comment on the capacity’s future availability.

PSE and Avista have to remove coal from their portfolios by 2025 under Washington’s new Clean Energy Transformation Act. The utilities are scheduled to depreciate their shares in Colstrip units 3 and 4 in 2027. In Oregon, PacifiCorp plans to stop billing its customers for coal costs in 2030, and PGE plans to follow suit in 2035.

A 2018 study by NorthWestern Energy (and requested by PSE) found 800 MW transmission capacity would be freed up by closing units 1 and 2. Units 3 and 4 use the remaining 1,400 MW capacity on the CTS (CU No. 1858 [10]).

With that horizon, interconnection requests have increased in recent years. The 13 active transmission requests filed with NWE since 2018 total 2,895 MW of capacity. With an average nameplate capacity of 273 MW, the projects are substantially larger than the 86.6 MW average size of projects filing requests since 2001. BPA currently counts 850 MW of wind in its transmission queue from Montana developers.

There are well over 2,000 MW of wind capacity in active development, said Jeff Fox, Renewable Northwest’s Montana policy lead. “And that is a conservative estimate.”

Stacy Gasvoda, project development manager of Haymaker Wind, said that given the push, to exit coal, and the soon-to-be available transmission capacity that will bring, “it’s just a matter of time before you see more Montana wind” delivered to utilities in Washington and Oregon.”

The company’s proposed 600 MW development, Haymaker Ranch Wind Energy, is located in Wheatland County in central Montana, near Two Dot, the 9.7 MW wind farm owned by NorthWestern Energy.

Haymaker Wind’s interconnection request for 600 MW of wind generation already is moving through the CTS’s approval process, and is in the second of three study phases.

The studies, conducted by NorthWestern Energy, require developers to file interconnection requests with, and pay a $10,000 fee to, each of the CTS’s five owners—NorthWestern Energy, Puget Sound Energy, Avista, PacifiCorp and Portland General Electric.

Transmission costs can vary greatly depending on whose capacity is used to move energy from Montana to the West. The range runs from $6.02 per MWh using only BPA capacity to $24.34/MWh if it has to move from NorthWestern to Avista to BPA, according to a 2018 report by BPA and the Montana Governor’s Office (CU No. 1858 [10]).

NorthWestern charges substantially more than other CTS owners for transmission and associated expenses. In May, NWE asked FERC to approve a 50 percent increase to its Open Access Transmission Tariff [ER19-1756]. NWE says that the increases are needed to recover system investments and costs (CU No. 1903 [15]).

Renewable energy advocates and wind developers are concerned the increased transmission costs will make Montana wind significantly less attractive to Washington and Oregon utilities. NWE’s transmission rate filing was followed by protests and intervention requests from BPA, Talen Energy, the Montana Large Consumer Group, the American Wind Energy Association and Renewable Northwest.

“NorthWestern’s proposal to raise rates is a real concern,” Hedges said. “And I think they’re doing it to kill Montana wind.”

Cheap Montana wind will put more downward pressure on the region’s energy market prices, which in turn affects marginal resource costs. And that could make it harder for NorthWestern to justify building new gas plants, Hedges said.

NorthWestern identified natural gas resources as its clear preference in its latest resource procurement plan (CU No. 1886 [11]).

When asked, NWE spokeswoman Jo Dee Black did not directly deny the allegation made by Hedges and others.

“NorthWestern Energy’s draft Montana Electric Procurement Plan addresses the capacity deficit through an incremental competitive solicitation process, with a third party that will consider bids from all sources,” Black told Clearing Up.

Despite the company’s insistence that it will be a competitive process, developers and renewables advocates remain skeptical.