December 1, 2011

NorthWestern Energy Builds a Regulating Reserve Plant

By William T. Rhoads, PE, Dr. John S. Fitzpatrick, and Richard P. Walsh, NorthWestern Energy and Gary T. Wiseman, PE, The Shaw Group

Offsetting Carbon Emissions

One of the more unique provisions of HB 25 is the requirement that a utility generating electricity from a new facility using synthetic or natural gas offset its carbon dioxide (CO₂) emissions by implementing “cost effective carbon offsets.” Cost effective carbon offsets are defined as “any combination of certified actions that are taken to reduce carbon dioxide emissions or that increase the absorptions of carbon dioxide, which collectively do not increase the cost of electricity produced annually on a per-megawatt-hour basis by more than 2.5%.”

Unlike other carbon offset programs, Montana’s law does not require offsetting a quantity of CO₂. Instead, the statute requires spending a sum of money, to be determined by the MPSC, for offset activities. NWE elected to implement the carbon offset requirement through a grant program, making funds available to third-party providers who will implement the programs. Possible program types in which the investment can be made include agriculture and forestry (such as tree planting and reforestation), general conservation (adding parks within 25 miles of the plant, funding conservation easements, or permanently protecting lands that support critical wildlife species), and energy conservation (building energy efficiency and other energy loss–reduction projects).

A request for proposals from carbon-offset providers was circulated in the spring of 2010. The 26 applications received were evaluated by an advisory council consisting of representatives from MPSC, the conservation community, and NWE. A project priority list and recommendations for funds was submitted to the PSC for a final decision. A compliance hearing with the MPSC is scheduled for November, during which carbon offsets will be discussed. The final decision is pending with the MPSC.

Third-Party Operator

When its plants were sold to PPL Montana in 1999, most of NWE’s expertise in plant operation was lost. Because the May 2009 MPSC order approving DGGS required NWE to operate the plant with its own personnel after three years, in early 2009, NWE solicited bids from three third-party operators. NAES was selected in June 2009, and the plant operations contract was in place by the end of 2010. Having the plant operator on board early was helpful during discussions with the potential CT and other major equipment suppliers regarding plant operations and spare parts inventory needs.

5. Follow the leader. This figure shows the automatic generation control (AGC) signal requested from NorthWestern Energy’s System Operations Control Center (pale blue line) and the output from Dave Gates Generating Station following that signal (green line) over a typical 24-hour weekday. Engines are started and stopped as required to follow the AGC signal. The vertical scale is 100 MW, maximum. Wind power capacity of 150 MW is connected to this system. Courtesy: NorthWestern Energy

As of September 30, 2011, the six engines at the DGGS have operated 16,488 hours, producing approximately 251,000 MWh net. Two-unit availability has been 99.38%, which provides sufficient regulation capacity except in extreme temperature conditions when three units are needed. An impressive 5,465 engine starts have occurred since commercial operation. The plant has served as a reliable replacement for third-party contracts for regulation service by consistently meeting a monthly control performance standard (CPS2) greater than 90%, the required reliability standard (Figure 5, p. 60).