NorthWestern Energy to issue RFP for new capacity resources in Montana

NorthWestern will increase service reliability, retain low rates by strengthening capacity position

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Dec 12, 2019, 16:30 ET

BUTTE, Mont., Dec. 12, 2019 /PRNewswire/ -- NorthWestern Corporation d/b/a NorthWestern Energy plans to issue a request for proposals ("RFP") in January 2020 for about 280 megawatts of dispatchable capacity resources to begin delivering services to Montana customers in 2023. NorthWestern Energy will structure the RFP as an all-source capacity solicitation considering proposals for generation, storage, and demand-side products delivered under a variety of procurement structures.

NorthWestern Energy submitted its 2019 Electricity Supply Resource Procurement Plan to the Montana Public Service Commission in August, summarizing its current capacity position. The 2019 Plan identifies the need to add additional capacity to the Montana system that can serve customer peak demand and reliably serve load over sustained durations.

Currently, NorthWestern Energy experiences a peak customer demand of approximately 1,205 megawatts with an existing supply portfolio peak capability of approximately 755 megawatts, resulting in a capacity deficit of nominally 450 megawatts. Considering a reserve margin typically required by utilities to account for unexpected system outages and extreme demand events above the observed peak, NorthWestern Energy's capacity deficit today is approximately 650 megawatts, growing to 725 megawatts by 2025 due to a few expiring PPA's and modest customer growth. The planned RFP is focused on securing reliable, cost effective capacity resources to account for a portion of the current capacity deficit.

NorthWestern Energy's capacity deficit and reliance on market purchases to serve load are significantly higher than other utilities in the Pacific Northwest region resulting in increased reliability risk and price risk for Montana customers during periods of peak demand. As a result, the RFP will request firm proposals for dispatchable capacity that can provide uninterrupted services over sustained system peak periods as well as consider customer benefits associated with capacity products offering increased operational flexibility. NorthWestern may issue additional RFPs in the future to fulfill the system needs outlined in the 2019 Plan.

The RFP Administrator will be Aion Energy LLC. All correspondence related to the RFP should be via email and directed to the RFP Administrator at [email protected]. Parties interested in participating in the RFP must complete a Prequalification Form and execute a non-disclosure agreement ("NDA"). Interested parties can receive the Prequalification Form and the NDA form by sending an email expressing interest to the RFP Administrator. The Prequalification Form must be completed and the NDA executed by 5:00 p.m. mountain standard time on January 10, 2020.

About NorthWestern Energy (NYSE: NWE)
NorthWestern is regulated by the Montana Public Service Commission and serves more than 573,200 residential and business customers with electricity and natural gas in Montana. NorthWestern also provides electricity and / or natural gas to approximately 726,400 customers in Montana, South Dakota, and Nebraska. We have generated and distributed electricity in South Dakota and distributed natural gas in South Dakota and Nebraska since 1923 and have generated and distributed electricity and distributed natural gas in Montana since 2002. More information on NorthWestern is available on the company's website at www.northwesternenergy.com.