SME Goes Natural Gas

By KARL PUCKETT • Tribune Staff Writer • February 2, 2009

In uncertain regulatory climate has prompted a developer to scrap its plans for a $900 million coal-fired power plant east of Great Falls and turn instead to renewable energy to meet the needs of its 65,000 Montana customers.
Southern Montana Electric Generation and Transmission announced today that it will seek financing to construct a 120-megawatt combined cycle natural gas-fired facility, in addition to six megawatts of wind power.

For the past four years, SME has been working on the 250-megawatt coal-fired Highwood Generating Station, but it faced stiff opposition in the courts and a state environmental appeals board.

SME already was planning to build 6 megawatts of wind power at the coal-fired facility, but CEO Tim Gregori said additional wind megawatts could be added now depending on the outcome of financing.

Repeated appeals of the project made obtaining financing for Highwood Generating Station too uncertain for financing institutions, which prompted the change in direction, Gregori said.

“That cast a stigma not only on our plant, it cast a stigma on any energy development in the state,” he said.

The election of Democrat Barack Obama, who has pushed renewable energy and more emissions controls of greenhouse gases, was a factor in the decision because it created more uncertainty about the future of coal-fired power, Gregori said. But he said the state’s regula-tory system as the main factor in the about-face.

The system was used by opponents to repeatedly appeal the project, Gregori said. But the new plans are another example of how the developer has listened to the public’s concerns and responded, Gregori said.

Bozeman-based Earthjustice attorney Abigail Dillen, which represented opponents in the courts and before the state Board of Environmental Review, said she looked forward to working with SME in its investment in renewable energy.

“We are thrilled they’ve decided to move away from coal,” Dillen said.

Anne Hedges of the Montana Environmental Information Center, calling coal-fired power plants the leading emitter of climate changing pollution, said SME’s decision was an “enormous step forward.”

“We can no longer continue to ignore global warming,” she said.

She added that SME should still move the natural gas fired power plant and the wind generation to a new site, calling it an industrial facility in the middle of farmland.

If opponents oppose Highwood now even after the changes, they are “hypocrites,” Gregori said.

SME broke ground on the coal-fired facility this past fall. Gregori said much of the preparation work will fit well with construction of the natural gas facility.

SME is speaking with the same “entities” about financing as it was when the project involved a coal-fire power plant, Gregori said.

Highwood is proposed by four rural cooperatives and would serve 65,000 Montanans including some customers served by the utility arm for the city of Great Falls.