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Montana seeks local benefits -- Nordex US manufacturing facility

Montana Power has agreed with Montana Wind Harness to buy 150 MW of wind power for $31.65/MWh, a deal that also calls for the construction of a wind turbine assembly plant in the state. Wind Harness will supply the power for 20 years from 2003. Nordex won the contract and expects to use 1.3 MW turbines.

The condition of the contract requiring Nordex USA to build an assembly plant and a maintenance centre is contingent on the approval of Nordex AG's board in Germany. The two facilities would create up to 65 new jobs. Nordex USA's Robert Paul says there is a strong possibility Nordex will build the assembly plant. As much as 2000 MW of new wind generation is expected in the next few years in the Northwest and local turbine manufacture would meet a clear need, he says.

The deal could well provide other economic benefits for Montana. The wind plant will be on at least three separate sites. Lease payments for any turbines placed on state lands will be used to support schools. "We wanted to bring as many economic attributes with the project to Montana as possible," says James Carkulis of Montana Wind Harness.

Montana Power had released a bid for wind to help fill its default generating portfolio for customers who choose to stay with the utility when the state's electricity market fully deregulates in July. Talks with the short list of developers slowed in the summer when market prices dropped to as low as $30/MWh, but in the end, Montana was able to get a clean energy project at market rates, Paul says.

Carkulis, a first-time wind developer, is teaming with Ameresco Inc of Framingham, Massachusetts, to gain capital and expertise. He says he intends to double the size of the project in the next few years, although he has yet to negotiate a power purchase agreement for the additional MW. Montana has one of the highest wind resources of all states in the country, but wind development pushes the limits of the transmission system when it reaches about 500 MW of capacity, says Carkulis. Also competing for transmission space will be nearly 1500 MW of new thermal generating plants now under construction in the state.

Montana Wind Harness is now conducting avian and environmental studies. There may be a chance for construction to begin in late 2002, says Carkulis, but it is more likely between March and December 2003.

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