$3.2 billion Montana energy project adds key investor (2024)

A major power transmission project linking Montana to energy markets in the Midwest picked up a key commitment Tuesday from Colstrip Power Plant shareholder Portland General Electric.

The $3.2 billion North Plains Connector would bridge the Eastern and Western energy grids by running 415 miles of high voltage, dedicated current line between Colstrip substation and Center, North Dakota.

North Plains is being developed by Texas-based Grid United.

Effectively, the line allows energy to move between the West Coast to the Midwest, something no major U.S. transmission line currently does. The connection increases the potential for new Montana energy generation and should make power more available, and thereby cheaper, during peak demand times driven by extreme weather.

Oregon ending coal power

For Portland General Electric, faced with state law requiring coal-power to be phased out, North Plains extends the utility’s reach for renewable energy in a way that increases the probability that there’s some to be had, regardless of whether the wind is spinning turbines in the Pacific Northwest. It’s a strategy spelled out in PGE’s latest integrated resource plan, a 20-year energy roadmap in which the utility explains how it will reach into areas of the country with different climates, to address gaps in the availability of wind and solar energy.

“We really identified the need for diversity, and we call them climate zones. And in that IRP, you saw us focus on Wyoming as a proxy, and the desert southwest as a proxy for solar. But really, what we signaled is if you can get wind from diverse regions, solar from diverse regions, you now have a portfolio of variable resources that looks more similar to a baseload resource,” said Brett Greene, PGE’s Senior Director Clean Energy Origination and Structuring. “Now, I don't want to say, ‘We’ll never replace a coal or a gas resource,’ but if you add wind and solar that actually blows throughout the day and you pair it with battery storage, you’re going to make a lot of progress on decarbonizing.”

The utility’s expected ownership share of North Plains Connector transmission capacity is 20%. The 525-kilovolt line can move 3,000 megawatts of electricity at any given time. Grid United is the project developer and has told Lee Montana Newspapers previously that the line should be complete within four years.

Grid United expects to begin the permitting process for North Plains in October, said Brant Johnson, vice president of development. That means Montana and North Dakota will begin review of siting and construction, while the U.S. Department of Energy determines whether the transmission line warrants an environmental assessment, or a more thorough Environmental Impact Statement under the National Environmental Policy Act, or NEPA.

Grid United estimates construction will create 600 jobs in Montana and North Dakota.

In Oregon, decarbonizing has been written into utility law since 2016, which is when legislators created law requiring PGE and PacifiCorp to abandon “coal by wire.” The utilities will do so no later than the end of 2029. Both utilities own shares of the Colstrip Power Plant and will leave the 1,480-megawatt coal burner in southeast Montana generator in the next few years.

Portland General Electric has a 296-megawatt ownership share in Colstrip Power Plant, dating back to the 1980s construction of generating Units 3 and 4.

The Portland utility with just under a million metered customers is holding onto its share of the 500-kilovolt Colstrip Transmission Line, which coupled with the North Plains Connector will bridge Portland General Electric with energy markets deep in the United States. Greene explained that the North Plains Connector will also enable PGE to sell its own generated renewable power when it has a surplus. Corporate filings show the utility generated more than a gigawatt of wind energy in February.

Importing power

Just as important is the ability to access power generated outside the Pacific Northwest and Montana during times of peak demand, when the crush of the region’s utilities scrambling for extra power drives up market prices. In mid-January, the utilities in the northwestern United States paid close to $900 a megawatt hour for electricity as subzero temperatures created a surge in regional demand for electricity. There was more affordable electricity to be had from southern Idaho to the Midwest, but utilities in northwestern states, particularly Montana lacked the transmission lines to access more affordable energy. The situation cost customers of NorthWestern Energy in Montana tens of millions of dollars in expensive market purchases.

Demand for energy in the Pacific Northwest is surging with the arrival of data centers, centrally located computer servers and other networking equipment assembled to process vast amounts of information. Each data center can consume as much electricity as a small town.

“The new reality is, I think this is across the United States and definitely in the Pacific Northwest, is the amount of demand growth we're all experiencing from data centers. And for us, it's not just data centers here in Oregon, but also semiconductors,” Greene said. “So, we have a lot of federal and state funding that is driving that economic development. And that's all energy demand that we need to meet on aggressive timelines.”

Currently the timeline for new development is too slow to keep up with demand, Greene said.

The PGE commitment to North Plains Connector is the second utility buy-in for transmission line developer Grid United. Minnesota-based Alette secured a 35% stake in the transmission project in early 2023. Earlier in May, Alette was purchased for $6.2 billion in share purchases and debt acquisition by Canadian Pension Plan and Global Infrastructure Partners, a major infrastructure investor.

"We welcome PGE joining us in our efforts on this historic and transformative infrastructure project for our nation," Bethany Owen, ALLETE CEO said in a press release. "Large-scale projects require collaborative solutions. We look forward to working with PGE and their strong team to advance this critical project."

Allete owns the 80-megawatt South Peak wind farm in northcentral Montana.

North Plains would be the just the second large cross-state transmission project built in Montana in at last 30 years. Improved transmission is considered crucial for Montana's energy export industry.

Montana ranks fifth in the nation for wind energy potential, as scored by the National Renewable Energy Laboratory. For actual wind generation, the state is middle of the pack. Montana ranks 50th on the Grid Modernization Index, with no state grid modernization plan and no mention in Montana's energy plan of modernizing the grid for resilience.

The Grid Modernization Index is produced by GridWise Alliance, a nonprofit which describes itself as a diverse membership of electricity industry stakeholders focused on accelerating innovation that delivers a more secure, dependable, resilient, and affordable grid to support decarbonization of the U.S. economy.