Montana Power finalizes power portfolio for utility customers

By the OGJ Online Staff

HOUSTON, Oct. 16, 2001 – Montana Power Co. finalized its portfolio of purchased power, selecting the cheapest bid.

Montana signed a contract with PPL Montana, a unit of PPL Corp., to supply 450 Mw for 5 years at an average price of $32/Mw-hr starting in July 2002. PPL was chosen from 14 companies that submitted competitive bids.

Montana Power also has a contract with a second supplier that has not been announced because the agreement is not yet final.

Roughly half of the portfolio will come from this bidding process and existing long-term contracts with small generators known as qualifying facilities; another 25% from new generation and previously announced contracts with wind generators; and the remainder of the portfolio will be provided by short term market purchases

Montana Power will submit the completed portfolio to the Montana Public Service Commission for approval.

Montana Power sold all of its power plants when it diversified into telecommunications several years ago. The state began its process of deregulation in 1997. But the state legislature has delayed deregulation. Consumers must still take electricity service from Montana Power because alternative suppliers never materialized.

Montana Power must still serve the state’s consumers even though it has no power plants. Montana Power will not earn a profit on serving these consumers, known as default customers.

Retail choice for electricity has been delayed until 2007 or until the market is sufficiently competitive that consumers can buy power at reasonable prices from a variety of electric providers.

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