Energy policy issues often divide Americans along partisan lines, pitting proponents of coal-fired electrical generation against advocates for alternative sources. So it’s remarkable that one issue has united Montanans of both major parties, along with lawmakers from Washington state, renewable energy proponents and supporters of the Colstrip power plants.
This diverse group wants the elimination of a transmission fee so high that capacity is being wasted.
This story starts back in 1981 when Bonneville Power Administration, a federal agency, built a 1,900 megawatt transmission line between Townsend and Garrison in Western Montana. The Colstrip partners contracted to use 1,700 megawatts of capacity. BPA had a tentative deal with the Western Area Power Administration to use the remaining 200 megawatts of capacity at a higher price than the Colstrip energy would pay.
The 1,900 megawatt line was built, but the WAPA deal fell through. Electricity generated at Colstrip moved over the line under a contract that requires Colstrip partners to cover the costs of maintaining the line.
Wasted capacity
A wind energy development near Forsyth now wants to contract with BPA for 184 megawatts of capacity that isn’t being used, but developers say the extra charge makes the deal unworkable.
If the fee is reduced and the wind energy firm uses the now-unused capacity, its payments will help cover costs now borne by Colstrip partners, including NorthWestern Energy, which serves Montana customers, and Talen Energy, which markets Colstrip electricity outside Montana. Ratepayers in Montana and Washington would benefit because regulated utilities would see lower costs for providing power.
The Montana House approved a resolution sponsored by Rep. Daniel Zolnikov, R-Billings, calling on the BPA to eliminate the Montana intertie rate because:
- It adds 40 percent to the cost of traversing the BPA network.
- Full subscription of the intertie would reduce the Townsend to Garrison rate paid by the Colstrip partners by as much as 9.5 percent, including costs passed on to Montana consumers.
- Elimination of the Montana intertie rate would make new generation facilities in Montana more competitive.
U.S. Senators Maria Cantwell and Jeffrey A. Merkley made a similar case in a June 12 letter to BPA Administrator Elliott Mainzer in Portland, Oregon. The Democratic senators urged Mainzer to eliminate the Montana Intertie rate and, instead, “charge network rates beginning at Townsend.”
The senators noted that decision would be consistent with BPA’s obligation for “encouraging the widest possible diversified use of electric power at the lowest possible rates to consumers consistent with sound business principles.”
Democratic Montana Gov. Steve Bullock, U.S. Sen. Jon Tester and the state’s all-GOP Public Service Commission support nixing the Montana intertie rate.
July 26 decision
Yet last week the BPA announced a draft decision to retain the exorbitant rate that keeps this transmission capacity from being used – and unnecessarily adds to the cost of Colstrip power.
Charging the regular rates of BPA’s 15,000-mile transmission network on that 90-mile stretch through Montana is a no-brainer. It would be a win for BPA, its customers and their customers. More electricity would move through Montana and the unit price of transmission would drop.
The BPA’s final decision, which is expected on July 26, should reflect the business- and consumer-friendly change that state officials, legislators and energy producers want.
The benefits of reducing the fee for using the transmission capacity that has gone unused for nearly 40 years are simply undeniable.
