Montana Integrated Resource Plan 2023

Energy for Montana's future, as well as today.

Executive Overview

Rainbow Dam at sunset

Executive Overview

NorthWestern Energy’s 2023 Montana Integrated Resource Plan is an analysis of energy supply conditions. It is used to inform the development of an adequate Montana energy supply portfolio for reliable energy service for our customers’ homes and businesses, the state’s industries, and critical services, such as healthcare, for the coming years.

It presents an evaluation of different potential generation resource portfolios that could meet the needs of our Montana electric customers reliably, safely and at reasonable costs over a 20-year horizon.

During the December 2022 extreme cold in Montana, 41% of the electricity powering our Montana customers’ homes, businesses and critical services was imported from out-of-state on the grid. With traditional generation resources, such as coal plants, being retired across the West, the risk continues to increase that energy markets may not have enough electricity available when it is needed to meet our Montana customers’ peak energy demand.

A pie chart showing the Montana 2022 electric generation portfolio.

The Montana Integrated Resource Plan provides information about the energy system’s future needs under different conditions and evaluates various resource types based on their generic costs and characteristics. The plan evaluates: solar and wind renewable generation; battery and pumped hydro storage; natural gas plants; and small modular reactor nuclear plants. It is not a recommendation of any resource type or mix of resources.

The plan is revised every three years to include changes in energy policy, demand and technology, as well as other developments in the energy industry.

The 2023 Montana Integrated Resource Plan identifies that the major risk for customers, which is consistent with previous integrated resource plans, is an overreliance on an uncertain market to address our critical capacity needs.

In fact, recent real-world examples indicate that risks to affordable and reliable energy service for our Montana customers are increasing because of an overreliance on the market for capacity needs.

In addition, each energy company must have sufficient resources to meet its own customers’ peak demands to meet regional reliability requirements. Reliance on short-term market purchases is not sufficient to meet this regional resource adequacy requirement.

NorthWestern Energy’s commitment to provide all our customers with reliable, safe energy service at the most affordable cost and to be responsible stewards of the environment remains the cornerstone of our mission as we enter our second century in the energy business.

Energy for Montana's future as well as today

map of NorthWestern Energy Contracted and Owned Generating Resources in Montana

Energy for Montana's future as well as today

NorthWestern Energy is taking actions now to continue to provide the reliable, safe, cost-effective energy service we do today during the industry’s transition to cleaner generation resources and in the future, when additional cost-effective, carbon-free energy technology is expected to be available that can meet our customers’ needs.

NorthWestern Energy is committed to adding on-demand generation that is located in Montana to ensure we will have adequate resources that can provide energy in all weather conditions for our Montana customers.

This provides the resources needed for reliable energy service at reasonable costs while we plan for Montana’s future.

NorthWestern Energy has an agreement with Avista to acquire its ownership of the existing Colstrip Units 3 & 4, 222 megawatts, on Jan. 1, 2026.

Today, because we don’t have enough on-demand generation, we purchase electricity from the changing energy market to meet the needs of our Montana customers when their energy demand is high, which is when energy market prices are rising.

Regionally, the Pacific Northwest is facing tight electricity supply, conditions that are forecast to persist because on-demand generation, such as coal plants, continue to be retired before replacement resources are available. Energy companies need their remaining generation to serve their own customers and have less now to sell through the energy market than in the past.

Regional resource adequacy programs and markets

A crew works in Great Falls on a cold winter day.

Regional resource adequacy programs and markets

Because the Pacific Northwest faces an increasing probability of near-term shortfalls of energy supply during high-demand conditions, a regional energy resource adequacy program — the Western Resource Adequacy Program (WRAP) — is being developed. Such programs are already established in other regions in the U.S.

The programs’ cooperative approach lets energy company members leverage their shared resources across regions for service reliability planning and to take advantage of the diversity of weather conditions in a multi-state region that influence energy demand. The WRAP standardizes resource capacity values, creating a common framework all members use to measure resource adequacy.

Another customer benefit is that together, program members have lower individual resource requirements for reliable energy service planning than are needed for reliability planning as stand-alone energy companies.

In order to participate, NorthWestern Energy and other member companies are required to have sufficient energy resources so that no member creates an undue burden on the overall system. NorthWestern Energy will have the sufficient resources required to participate in the program with the Yellowstone County Generating Station and an additional share of the existing Colstrip plant.

NorthWestern Energy is also participating in the regional real-time energy market that provides access to economical purchases and sales of energy. We will continue to monitor possible benefits of additional new regional energy markets that are developing.

Proactive planning

Transmission lines in Colstrip, Montana.

Proactive planning

NorthWestern Energy’s 2023 Montana Integrated Resource Plan identifies significant variables that may affect our resource adequacy.

As the future of the existing Colstrip plan becomes clear, NorthWestern Energy may need to replace the on-demand generation this plant, the largest single such resource in our Montana portfolio, provides.

Constraints within the existing transmission system in Montana limit the ability to import energy from and export energy to out-of-state. Transmission availability also limits the types of generation resources that can be added to the system, as well as where new resources can be located.

A reliable energy future for Montana

Hexagon collage of NorthWestern Energy images

A reliable energy future for Montana

NorthWestern Energy’s 2023 Montana Integrated Resource Plan is a data-based analysis of the energy needs of our customers today and through the next 20 years. It is one tool used as we chart the course to continue to responsibly provide essential energy service for our customers in Montana.

Montana 2023 Integrated Resource Plan Frequently Asked Questions

Customer rates would increase and be prohibitively expensive with only renewable generation resources. Energy service would be less reliable.

NorthWestern Energy has an obligation to provide our Montana customers with reliable, safe energy at the most affordable rates possible.

We must meet our obligation so that Montanans’ homes are warm in the winter, hospitals can treat patients and businesses can operate.

Today and in the near-term future, natural gas and coal generation resources are the critical, cost-effective capacity resources keeping the lights on for our Montana customers as technology is developing to make renewable resources more reliable and cost-effective.

NorthWestern Energy is committed to being a good steward of the environment. We have increased our sustainability efforts and our access to clean energy resources. We are committed to achieving net zero emission by 2050.

Wind and solar are variable energy resources and the inputs – wind and the sun – are free. There are even times when NorthWestern Energy’s variable generation resources produce more energy than our Montana customers need, such as on breezy, sunny days with mild temperatures.

But variable wind and solar generation are not resources that are always available and cannot be counted on to meet our Montana customers’ energy needs 24/7, on demand.

NorthWestern Energy does not have enough capacity resources to meet our Montana customers’ high energy needs for long durations, such as cold winter weather that lasts several days. Sizing wind and solar generation projects to have similar capacity values – to be available to serve customers when they need energy service – as natural gas or coal projects, would mean projects that costs hundreds of millions of dollars more. The same is true for wind and solar generation projects paired with battery storage. 

Our customers will pay more for energy from new wind or solar generation sized to have adequate capacity values to keep the lights on during multi-day subzero weather in the winter than from 24/7, on demand resources, such as natural gas plants or existing coal plants. 
The plan uses the capacity values established by the Western Resource Adequacy Program, the regional energy adequacy program for the Pacific Northwest. NorthWestern Energy is a member of WRAP.

Yes. The plan timeline was adjusted so new incentives for renewable generation projects available through the federal Inflation Reduction Act could be included. Modeling for wind, solar, battery and pumped hydro energy storage and geothermal resources in the plan includes federal financial incentives that would pay for about 30% of new for wind, solar, battery and pumped hydro energy storage and geothermal resources generation projects.