CWAG ENERGY CONFERENCE BIG SKY, MTCollaborative Efforts to Find Solutions: A Case Study – The Mountain States Transmission Intertie (MSTI)Presented by : Mike Cashell, Vice President - TransmissionFebruary 17, 2012

• Transmission – electric and natural gas– Serving the state – extensive

natural gas and electric transmission systems serving large territory

– Serving the region – proposed new lines to address regional concerns

TRANSMISSION 2

• System demographics– 300,000 electric customers– 7,000 miles of transmission

lines serving an area of 97,540 sq. miles

– Voltage levels ranging from 50 kV to 500 kV

– Registered with NERC as a Balancing Authority, Planning Authority and Transmission Planner

– Critical service to our core customers

– 2012 Capital budget of $22 million

ELECTRIC TRANSMISSION IN MONTANA & REGION 3

– 500 kV AC line from Townsend MT to Midpoint Substation near Twin Falls ID

– Approximately 450 miles depending on final route• 70+% on State and

Federal Public Lands expected

– 1500 miles of alternatives reviewed

– Advanced Stages of public siting and Review – began in 2007

– MFSA Application filed in July 2008

– 1500 MW Path Rating – Current Project cost is

approximately $1 billion

Mountain States Transmission Intertie (MSTI) – WHAT IS IT?

4

WHY MSTI? MT IS BETWEEN RESOURCES & LOADS 5

INTERMOUNTAIN REGION – TODAY 6

• Vast interconnected region

• 62 projects listed in the WECC project portal are proceeding through path rating

• Some are shown in the graphic

INTERMOUNTAIN REGION – TOMORROW 7

• Transmission Expansion Planning Policy Committee (TEPPC)– Funded, in part, by a grant from the U.S. Department of Energy (DOE) – First Interconnection-wide transmission plan– Some key findings

• Some long-distance transmission to access remote renewable resources appears to be cost-effective under certain conditions

• Utilization and congestion consistently high increases under a variety of conditions for:– Montana to Northwest path– Pacific DC Intertie and California-Oregon Intertie

• High levels of variable generation caused unprecedented levels of conventional generation ramping and cycling

WECC TEPPC 10-YEAR REGIONAL TRANSMISSION PLAN8

• The purpose of the MSTI Project is:– To provide a pathway for delivering renewable energy generated in

Montana to areas throughout the western United States. MSTI will connect proposed new sources of clean energy, particularly wind power, to areas that need more electricity. MSTI is a response to customers’ request for new transmission capacity

– To strengthen the high-voltage transmission system in the western United States by helping to relieve current constraints and improving reliability

• The MSTI Project is needed because:– The Western US needs new sources of electricity– New sources of renewable energy produced in Montana need a

pathway to communities that need the energy– Congestion on the western electric grid needs to be addressed

MSTI PURPOSE AND NEED 9

• A sampling…• Why is NorthWestern Energy proposing MSTI?• What Type of Energy will MSTI Carry?

– Who are the customers?

• Rate Impacts – who pays for MSTI?– Who/What determines Retail Electricity Rates in Montana?– Could Retail Customers end up paying for some portion of MSTI?

• How Much Property Tax Revenue will MSTI generate for local communities?

• What is the role of Mill Creek in the siting process and what is Mill Creek?

• Can MSTI be sited on public lands?• How will NorthWestern compensate private landowners?

Impact to land values?• Impact to local economies?

MSTI – COMMON QUESTIONS/CONCERNS 10

• Public participation and involvement has always been the goal – NWE has always encouraged healthy and robust public communication

• An open process with all Stakeholders– Federal and state agencies, counties, landowners and project developers

• Public Open House Meetings– 24 open house meetings in local communities since 2007– The last round in January/February 2010– Ad hoc Public meetings throughout 2010 and 2011

• Elected Officials Briefings– Over 100 and counting since 2007

• Agency sponsored EIS Scoping Meetings– 2008 – 3 meetings in MT and 3 in ID– 2011 – 12 Agency meetings, 7 in MT and 5 in ID– Ad hoc meetings continuing– Future public meetings and comments after DEIS issued

• HAS IT BEEN ENOUGH? Many wanted more opportunity…

MSTI PUBLIC OUTREACH – WHERE HAVE WE BEEN?

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• Actively look for opportunities for stakeholder input and involvement

• Other NWE Examples include:

– Distribution System Infrastructure Project (DSIP)– Wind Integration Work Group (WIWG)

NORTHWESTERN’S STAKEHOLDER PHILOSOPHY 12

• County Leadership and vision– Madison County– Jefferson County

• Initial work/scope presented in July 2011 in Virginia City– Illustrated scientific approach – Independent, reputable parties engaged initially by Madison

County

HOW DID THE MSTI REVIEW PROCESS COME ABOUT?

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• NorthWestern Energy supports this third-party, independent review– Review will evaluate impacts and use a modeling process to analyze

unbiased policy data, scientific data and community values– The process will also assess the economic impacts of the project to

each county– All counties throughout the MSTI project area have been invited to

participate

• The MSTI Review Group includes: Madison County, MT; Jefferson County, MT; Western Environmental Law Center; Headwaters Economics; Sonoran Institute; Craighead Institute and Future West

• Funding for the project is expected to come from a variety of sources, in-kind and cash, including counties, states, individuals, foundations, and NorthWestern Energy.

MSTI REVIEW PROCESS 14

QUESTIONSThank you