PSC to investigate NorthWestern Energy’s cold spell response

Blair Miller

(Daily Montanan) The Montana Public Service Commission voted unanimously Tuesday to investigate how NorthWestern Energy and another utility planned and handled power generation and costs during the record cold snap that hit Montana earlier this month.

Stemming from the PSC’s 2022 investigation into resource adequacy and electrical supply risks in Montana, as well as criticism over NorthWestern’s handling of the spell that brought below-zero temperatures to most of Montana for several days this month, commissioners voted to send letters to NorthWestern Energy and the Montana-Dakota Utilities Company asking a series of questions about the choices the companies made to power Montana when usage spiked.

Since the PSC was authorized in 2022 to “investigate and identify the size and scope of the issues facing Montana and the Western Region,” staff recommended the commission now take a detailed look at the performance of both companies’ energy systems during the latest Arctic cold period.

Temperatures dropped below freezing on Jan. 10 and did not reach above-freezing levels again until Jan. 21 in Helena. Low temperatures bottomed out at -36 there but remained in the -35-to–5-degree range for several days between Jan. 12 and 15, which NorthWestern said created a record demand that outpaced the previous record set in December 2022, when a similar stretch of frigid air moved through Montana.

The company said it had to import energy from out of state to supply more than half of customers’ demand during that stretch, which cost upwards of $14 million. In the days after the energy demand peaked, the company said it could have avoided millions of dollars in total purchases if it was currently operating two other plants. Energy market purchases by the company are passed through to customers’ bills.

NorthWestern said operating the under-scrutiny Yellowstone County Generating Station, a 175-megawatt natural gas plant near Laurel, could have saved $14 million, and Avista’s 222-megawatt share of Colstrip, which the company is set to acquire on Jan. 1, 2026, could have saved $18 million in buys from the energy market.

NorthWestern also said its natural gas system supplied a record amount of natural gas to keep the grid active.

“NorthWestern Energy’s Montana natural gas-fired generation facilities and the Montana Colstrip power plant, along with our hydro generation in Montana, supplied about half of the power for our customers during the extreme temperatures,” the company said on Jan. 17. “Wind and solar generation could not produce much, if any, power during the extreme cold. Energy market purchase, most imported from out-of-state, were made to meet more than half of our Montana customers’ energy demand.”

NorthWestern Energy CEO Brian Bird said the cold snap showed why Montana needs “additional 24/7, on-demand resources” both to meet demands and “to add even more variable wind and solar generation to the Montana grid.”

But some have been critical of the fact that Colstrip Unit 4 was down for scheduled maintenance at the start of the cold period, ramping up production on Jan. 13 when temperatures were at their lowest, and that the company hasn’t invested in more battery storage to capture the wind energy generated when cold fronts move through ahead of storms.

The Billings Gazette also reported that the company did not buy much, if any, power ahead of the storm in order to curb the financial hit to its nearly 400,000 customers in Montana despite having the power to do so.

PSC staff told the commissioners that the first step in the review of the companies’ response to the January 2024 cold snap was to send both companies letters asking them to answer a series of questions about their systems, the choices they made to buy power and keep the systems running, and how much money those choices cost consumers or brought into the company.

The letter also asks the company to answer whether the Western Power Pool, a consortium of Western energy companies, initiated any sharing and whether NorthWestern received or provided any capacity or energy under the Western Resource Adequacy Program.

And finally, the commission asked the company to further explain what maintenance was performed at Colstrip that left it out of service during the initial days of the cold snap, when Colstrip decided maintenance was needed, NorthWestern’s involvement in the decision-making process for the maintenance, and whether it is normal for maintenance to occur in the months where there is the most demand for energy.

The company will have to respond with the information in a spreadsheet by Feb. 13. Commissioners will also send a similar letter to the Montana-Dakota Utility Company.

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