NorthWestern plans millions in infrastructure improvements

NorthWestern plans millions in infrastructure improvements

Tim Leeds

NorthWestern Energy plans to invest hundreds of millions of dollars in the next few years to keep its transmission and distribution system up to par.

"We've identified the need, we've identified the different strategies to address the needs and what that would cost, " CEO and President Bob Rowe said during a meeting in Havre.

The plan is, from 2010 through 2017, to invest an additional $290 million in infrastructure and maintenance in the electrical system and an additional $70 million in the gas system.

Rowe and other NorthWestern officials said the problem is one of aging infrastructure — one faced by companies and organizations across the nation, including for communications, roads and bridges, and water and sewer as well as for electric and gas transmission and distribution.

NorthWestern is pushing to upgrade its system rather than just repair it, increasing quality and reliability as well as preparing for advances in technology, including incorporating the buzz-worthy term "smart grid technology" where appropriate for its customers.

The plan, if approved by the state Public Service Commission, will come at a cost to customers.

"It's not as big as you might think, " said Curt Pohl, NorthWestern's vice president of retail operations.

Pohl said that, for an electricity customer averaging 750 kilowatt hours a month, the cost would go from $80.19 a month today to $86.80 a month in 2017.

For gas customers who pay an average $97.15 a month today would increase to $101.87 a month.

Rowe added that those rates are dependent on the cost of the electricity and gas.

"We're just saying, freezing everything else in time for right now and adding the infrastructure costs, " that is what the bill change would be.

Pohl said that the cost of transmission and distribution of both gas and electricity have been very stable in recent years.

Part of the relatively low yearly increase — Pohl said it would amount to about 1 percent to 1.5 percent a year for the seven years — is a request to defer initial expense. NorthWestern has requested the Public Service Commission to increase rates to recoup the initial investment over the next two years — the program is planned to be phased in, with $16 million to $18 million to be spent in the first few years, then ramped up in subsequent years — until later in the project.

"That will allow us to get started right now, " he said.

The vision of the project has several goals, Rowe said.

On the electric side, those include arresting and reversing a trend of aging infrastructure, increasing the ability to accommodate growth in users, maintaining reliability and improving it for the most rural customers, and positioning NorthWestern to adopt smart grid technology.

John Carmody, director of engineering and planning at NorthWestern, said what smart-grid technology means is vague at this point.

"If somebody's got a good definition, I'll take it, because right now there are more definitions than there are approaches, " he said.

The basic idea is to allow customers some say in how they use their power. Carmody said that, especially as the technology becomes more efficient and less expensive, NorthWestern will continue to look at how to incorporate that technology.

"Where it rolls out further downstream is that we will be working through pilot projects and working to see where the value is for our customers, " he said.

NorthWestern Energy plans to invest hundreds of millions of dollars in the next few years to keep its transmission and distribution system up to par.

"We've identified the need, we've identified the different strategies to address the needs and what that would cost, " CEO and President Bob Rowe said during a meeting in Havre.

The plan is, from 2010 through 2017, to invest an additional $290 million in infrastructure and maintenance in the electrical system and an additional $70 million in the gas system.

Rowe and other NorthWestern officials said the problem is one of aging infrastructure — one faced by companies and organizations across the nation, including for communications, roads and bridges, and water and sewer as well as for electric and gas transmission and distribution.

NorthWestern is pushing to upgrade its system rather than just repair it, increasing quality and reliability as well as preparing for advances in technology, including incorporating the buzz-worthy term "smart grid technology" where appropriate for its customers.

The plan, if approved by the state Public Service Commission, will come at a cost to customers.

"It's not as big as you might think, " said Curt Pohl, NorthWestern's vice president of retail operations.

Pohl said that, for an electricity customer averaging 750 kilowatt hours a month, the cost would go from $80.19 a month today to $86.80 a month in 2017.

For gas customers who pay an average $97.15 a month today would increase to $101.87 a month.

Rowe added that those rates are dependent on the cost of the electricity and gas.

"We're just saying, freezing everything else in time for right now and adding the infrastructure costs, " that is what the bill change would be.

Pohl said that the cost of transmission and distribution of both gas and electricity have been very stable in recent years.

Part of the relatively low yearly increase — Pohl said it would amount to about 1 percent to 1.5 percent a year for the seven years — is a request to defer initial expense. NorthWestern has requested the Public Service Commission to increase rates to recoup the initial investment over the next two years — the program is planned to be phased in, with $16 million to $18 million to be spent in the first few years, then ramped up in subsequent years — until later in the project.

"That will allow us to get started right now, " he said.

The vision of the project has several goals, Rowe said.

On the electric side, those include arresting and reversing a trend of aging infrastructure, increasing the ability to accommodate growth in users, maintaining reliability and improving it for the most rural customers, and positioning NorthWestern to adopt smart grid technology.

John Carmody, director of engineering and planning at NorthWestern, said what smart-grid technology means is vague at this point.

"If somebody's got a good definition, I'll take it, because right now there are more definitions than there are approaches, " he said.

The basic idea is to allow customers some say in how they use their power. Carmody said that, especially as the technology becomes more efficient and less expensive, NorthWestern will continue to look at how to incorporate that technology.

"Where it rolls out further downstream is that we will be working through pilot projects and working to see where the value is for our customers, " he said.