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Montana utility tries again -- New wind solicitation

Northwestern Energy, seeking to avoid the problems encountered in June 2002 when state regulators reversed its wind contract with Montana Wind Harness, released a new solicitation for wind bids last month with the help of a private consultant. The Montana utility is asking developers to bid on ten and 20 year contracts, one or more projects, and in 25 MW increments, but it does not specify the amount of wind energy required. It states it will not accept bids for less than 10 MW.

The Montana Public Service Commission (PSC) refused to approve the Wind Harness contract as a part of the utility's default supply portfolio because of bidding and documentation problems (Windpower Monthly, July 2002). Northwestern's Claudia Rapkoch says the utility, with the assistance of Seattle consulting firm Lands Energy, has been careful in restructuring this latest solicitation by making the contract very clear, but still "afforded itself the opportunity to pick and choose among providers." It expects to choose one or more projects and to negotiate power purchase agreements by the end of March.

One of the losing bids last year was Navitas Energy, now linked to Spain's Gamesa, one of the largest wind plant operators. Navitas says it bid with the lowest price with its 50 MW Golden Sunlight project on the site of an abandoned gold mine. The Wind Harness winning bid was $31.65/MWh for a 150 MW project while a Navitas affiliate, Northern Alternative Energy (NAE), bid 50 MW at $28/MWh.

Instead of waiting for this latest solicitation, NAE's John Jaunich chose to seek approval for the project as a qualifying facility (QF), which would require Northwestern to buy the project's output in order to get it approved in time to receive federal production tax credit incentives. The PSC approved the QF designation, but allowed Northwestern to pay only its short term cost of power -- about $10/MWh -- which Navitas says is unrealistic.

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