HELENA – Montana’s largest electric utility has agreed to a buy power from a proposed 80-megawatt wind farm in north-central Montana at less than $23 a megawatt hour – a price well below the average of its overall portfolio.
NorthWestern Energy says it has agreed to a 15-year contract to buy power from the South Peak wind farm, which will be constructed near Geyser by Minnesota-based Allete Clean Energy.
“We negotiated an agreement that will result in a very low cost wind project for our portfolio to help protect customers’ bills,” said John Hines, vice president of energy supply for NorthWestern.
NorthWestern residential consumers pay about $66 per megawatt hour (mWh) for their electricity and the company pays about $60 per mWh for its share of power from the coal-fired plants in Colstrip.
Al Rudeck, president of Allete Clean Energy, told MTN News Monday that construction on the project will begin later this year or in early 2019. It’s scheduled to go on line in December of next year, he said.
The contract calls for NorthWestern to pay $21.03 per mWh for power produced by the project and another $1.58 per mWh for the “capacity charge.”
Rudeck said several factors led to the low price for the project’s power, including bigger, more efficient turbines from General Electric, a great location near transmission lines, and a good wind resource.
Allete is part of a group of companies that includes Minnesota Power, another utility.
“We came from the utility; we understand what it’s like to be in NorthWestern’s shoes,” Rudeck said. “We realize how you need projects in the customers’ interest.”
The South Peak project will be Allete’s first wind project in Montana. It has built or is building projects in five other states, including North Dakota.