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Long in the planning stages, the Highwood Generation Station may be moving forward soon.

Supporters say financing could be just around the corner.

Tim Gregori is CEO of Southern Montana Electric (SME), the "cooperative of electric cooperatives" that is heading up the project. He said there is "justifiable optimism" that financing is nearly within reach, based on the current conditions and financial market.

Ron Roodell, manager of Beartooth Electric Co-op, said he too feels "much more hopeful," noting that two other natural-gas plants were recently permitted in Montana.

Last spring, Standard and Poor's gave SME an investment grade bond rating of BBB, which is considered medium-quality investment grade. The rating noted risks, "given inexperience in operating its own plants." The report also points out that the co-op has above-average member retail rates with the prospect of upward pressure.

First proposed as a coal-fired plant near Great Falls, Highwood is now being proposed as a natural-gas facility that will be built in three phases of 40 megawatts each.

The price tag for the first phase would run less than $100 million, Gregori said.

"We've gone from a 250-megawatt generating station with a price tag of $1 billion to this," he said. "The magnitude of the project is not even comparable."

Last winter, when the project switched directions, SME contracted with PPL Montana for power through 2019. At that point, some people expected SME to scrap Highwood.

With the first-phase plant of its natural gas facility, SME can generate just as much power as the co-ops need, Gregori said. And natural gas emits only half the carbon dioxide of the same-sized coal plant.

As of Oct. 16, the state's Department of Environmental Quality signed off on the proposed plant's air quality permit. The permit becomes effective Nov. 1 and SME could begin construction any time after that, unless the state Board of Environmental Review orders a stay. Appeals are allowed until Nov. 16.

Among the many comments the DEQ received was one from the National Park Service, which opposed a permit based on the adverse effects the facility would have on the Great Falls Portage National Historic Landmark. In response, Gregori said SME had addressed the agency's issues.

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While SME and its supporters seem to be drawing near another pivotal juncture, the Highwood proposal continues to draw controversy.

The Yellowstone Valley Electric Cooperative is no longer directly involved in Highwood, having lost faith when the Rural Utility Service denied funding for the initial proposal.

"It's no longer in the best interests of our members," said Yellowstone's CEO Terry Holzer. "They've squandered millions of dollars trying to keep this project going without any accountability."

But at least some of SME's other member co-ops continue to back the project. Scott Sweeney, manager at Fergus Electric Cooperative, said he supports Highwood because it will offer diversity for SME's portfolio and a more predictable way to sell blocks of energy. Even with a decade of power contracted through PPL Montana, it will be good to get started now, he said.

Roodell also favors the project, although he predicts it could be five years or more before the benefits are realized.

"We have a significant investment at this point," he said. "Do you walk away from it or do something that makes economic sense?"

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