NorthWestern Energy building for future with infrastructure, efficiency programs

At NorthWestern Energy, we are commemorating the 100-year anniversary of the formation of Montana Power in 1912. We are doing so by focusing on our customers, the communities we serve and our commitment to delivering a bright future.

A lot has happened since 1912. Today we are a pure utility, which means all of our investments go back into serving our customers. Therefore, our success as a company depends on the success of our customers and of our communities.

Our nearly 30,000-mile electric system is among the most reliable in the country despite our rural and rugged service territory. Our nearly 10,000-mile natural gas system is among the safest, with one of the lowest leaks-per-mile rates in the country. Over the last six years we have steadily increased our investment in the system, totaling approximately $610 million invested back into our existing system – let’s call this base-level spending.

Over the next several years, in addition to our ongoing base-level spending, we plan to invest another $290 million in our Montana electric distribution system and $70 million in our Montana natural gas distribution system through our Distribution System Infrastructure Project. The project is designed to ensure safe, reliable and adequate electric and natural gas distribution systems for decades to come.

On the electric system, that includes aerial and underground facilities, substations, line clearance and the replacement of thousands of distribution poles. We are strongly committed to maintaining safe and reliable service, which also means remaining in complete compliance with pipeline integrity and safety regulations.

Distribution System Infrastructure Project includes technology improvements to increase performance and reliability. This will also provide the foundation for Smart Grid technology, if and when large-scale Smart Grid deployment makes sense. We are participating in the Pacific Northwest Smart Grid Demonstration Project that enables us to learn from various projects in the region and will help inform our future decision-making about technology investments. Our Smart Grid pilot project includes the installation of customer-facing technology to a volunteer group of customers in Helena and to the utility equipment in Philipsburg.

Since 2009, we’ve added regulated electric generation assets dedicated to serving our Montana customers at prices based on the cost of providing service. Over time, we want to transition to additional rate-based or "owned" generation to provide customers with reasonable and stable prices over the long term, regardless of nearer-term market conditions, which can be very uncertain and volatile, by watching prices over the years at the gas pump. We will continue to purchase energy on the market where it makes sense. We are evaluating opportunities to build or buy power production facilities.

Montana Power owned about half of the natural gas production required to serve its customers. These resources were sold as part of supply deregulation, which preceded a period of severe price volatility and record high gas prices in some years. Now, we are actively exploring opportunities to add proven natural gas production to our resource portfolio. In 2011, we made two small purchases of natural gas production in northeast Montana.

Our energy efficiency programs are especially popular with customers. Last year, we helped our Montana customers save nearly nine average megawatts of electricity, which is roughly equal to the amount of energy used by the town of Dillon every year. Yet, demand for electricity is increasing as Montana’s population and economy grow. We’re working to strengthen our transmission system to meet local needs in Montana and to build new lines to meet regional demand.

NorthWestern Energy contributes more than $1.5 million annually to charitable and economic development organizations and recognizes the contribution of employee volunteers within our communities. We are by far the largest property taxpayer in Montana, about $77 million in 2011, supporting services in the 206 communities where we have facilities.

Recently, I had the opportunity to read a scrapbook with photos, stories and poems kept by a 96-year-old retired lineman, now living in Fairfield, who proudly chronicled his career that began in 1936. His story reflects the spirit of our predecessors, who built the infrastructure that made possible what their children and grandchildren enjoy today. That spirit is strong as we build and maintain the valuable infrastructure that will make possible a brighter future for generations to come.

Bob Rowe is the president and CEO of NorthWestern Energy, which provides electricity to 339,400 customers, natural gas to 182,100 and propane to 500 customers in Montana.

Bob Rowe

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