PSE to build Montana wind farm as coal-fired energy winds down


Puget Sound Energy, Washington's largest private utility, plans to build a wind farm on the high plains in Stillwater County, Montana, that will be large enough to power more than 80,000 homes and aid the transition away from coal.

The 248-megawatt Beaver Creek wind farm is expected to begin generating electricity in 2025, when the investor-owned utility has said it will transfer its ownership stake in a Colstrip, Montana, coal plant that has long provided power to the Puget Sound region.

The wind farm would be PSE's first renewable project since 2012. It could replace about two-thirds of the electricity now generated by PSE's share of the coal plant production.

Only two of four Colstrip units are still producing electricity, and together they generate about 1,480 megawatts. The two other units were retired as a result of a 2016 settlement stemming from a lawsuit filed by the Sierra Club and Montana Environmental Information Center.

Under Washington state law, PSE and other utilities are required to stop using coal-fired power by 2025 and ditch the use of fossil fuels for electricity generation by 2045. This requires big changes from PSE, which serves some 1.2 million electric customers, and in 2020 relied on coal and natural gas for half of its electricity generation.

Last year, hydroelectric power accounted for 67% of Washington state's total electricity generation; natural gas, and renewables (mostly wind), nuclear and coal provide much of the rest, according to the U.S. Energy Information Administration.

PSE's renewable portfolio has increased from about 34% in 2020 to more than 45% last year, mostly through power purchase agreements. The company aims to reach 60% clean energy by 2025.

"PSE is undergoing one of the largest clean energy transformations of any utility in the country," Mary Kipp, president and CEO of PSE, said in a statement. "Our priority is meeting our customers' demand for clean energy while continuing to deliver the safe and reliable energy they also expect."

Colstrip, one of the nation's top carbon dioxide emitters located just north of the Northern Cheyenne Reservation, belched about 10.7 million metric tons of the climate warming gas in 2022. PSE is one of six utilities that own a share of the Colstrip coal plant.

PSE plans to transfer its 25% ownership stake to Talen Energy in the end of 2025. Avista, which also serves customers in Washington, plans to transfer its 13% share to NorthWestern Energy, a South Dakota utility serving Montana. Talen and NorthWestern have said they plan to keep the plant operational.

For PSE and other utilities, one challenge in the transition to new energy sources is finding enough transmission line capacity to bring new sources of power to customers. In Montana, PSE will be able to use an existing line from the Colstrip coal plant to carry wind-power to Washington.

PSE is expanding its renewable energy sources in Montana, and recently entered a power purchase agreement with Energy Keepers, which generates hydroelectric power owned by the Confederated Salish and Kootenai Tribes.

In 2021, PSE signed a 20-year contract to purchase wind power from Montana's largest wind farm, Clearwater Wind, which spans three counties of Southeast Montana.

It will be up to the Washington Utilities and Transportation Commission to determine how this project impacts customer rates, but costs are anticipated to be less than purchasing renewable energy on the market.

The utility plans to eventually add wind turbines in neighboring Sweet Grass County, as well as a lithium-ion battery energy storage system to account for variable wind output. Wind varies hour by hour and minute by minute. This creates big challenges for utility managers, who must ensure that demand and supply are constantly in balance to avoid blackouts. So more energy storage could make power generation more consistent.

The new project would rely on Montana wind, which blows strong in the winter when high pressure systems cause Washington wind farms to produce less energy, and demand in the Puget Sound region peaks, according to PSE.

The wind farm is expected to generate up to 200 jobs during construction, slated for 2024, with an ongoing need for about 15 permanent staff during operation.