BUTTE, Mont., Oct. 12 /PRNewswire/ -- NorthWestern Energy's (NYSE: NWE) Mill Creek Generating Station will begin serving Montana electric customers by January 1, 2011, prompting the company to file an application to include it in energy supply rates on an interim basis until the actual revenue requirement is approved.
The 150-megawatt natural gas fired plant is the first newly constructed facility to be approved under the law which allows public utilities to obtain "preapproval" of electric generation resources prior to acquisition, or in this case, construction. The Montana Public Service Commission approved in part the preapproval application in May 2009 with the requirement that the company submit a compliance filing within 90 days after the plant is placed into commercial operation. The compliance filing will be used to determine the plant's final revenue requirement.
The company has submitted an interim rate request based on costs in the original preapproval filing that updates for certain known and measurable changes. As a result, this interim addition of the Mill Creek Generating Station in energy supply rates is expected to add $4.12/month to the total bill of typical residential electric customers using 750 kWh/month.
"The Mill Creek Generating Station is an important contribution to providing our customers greater independence from regional market forces," said Bob Rowe, CEO. "We have been relying on out-of-state third party providers for regulation service since the mid 1980s and the resource has been difficult to obtain, short-term in nature and expensive as regional providers keep more of this resource for their own transmission balancing needs."
Rowe added, "We're sensitive to the cost concerns in our local economy. Although rates will initially increase, the construction of Mill Creek will provide assurance that we will be able to continue to provide this critical regulation service to our customers over the long-term."
The Mill Creek Generating Station will be one of the few of its kind in the country because it will primarily be a regulating reserve plant, which means that it provides the reserve capacity necessary to maintain transmission system reliability and balance on a minute-by-minute basis as demand and resources fluctuate. The $200 million dollar facility east of Anaconda, Montana is on-time and on-budget, has generated approximately 250 construction jobs at its peak, 10 permanent jobs and will contribute more than $8 million dollars in new annual revenue to the Anaconda-Deer Lodge County when it is finished.
About NorthWestern Energy
NorthWestern Energy is one of the largest providers of electricity and natural gas in the Upper Midwest and Northwest, serving approximately 661,000 customers in Montana, South Dakota and Nebraska. More information on NorthWestern Energy is available on the Company's Web site at www.northwesternenergy.com.
SOURCE NorthWestern Energy