Document 3QaVzmZ9KQGxw4qrr185Xmy0O

NorthWestern Energy Delivering a Bright Future their accrcditcd capacity is very close to their nameplate capacity. As a result, thc regional portfolio is shifting away from high-accrcditcd to low-accredited generation sources. A difficult situation is expected to get worse and grave rcliability concerns arc no longer just the province of states likc California and Texas that have had well publicized blackouts. Equally importantly in terms of timing and supply, 185 MW of North Western's current market contract capacity will be expiring by mid-2024. Given thc retirements of facilities throughout thc region, NorthWcstcrn does not have confidence it will be ablc to renew or rcplacc these contracts whcn they expire, especially under as favorable of terms. To thc extent any can be replaced, market conditions indicatc that they will be at much higher costs, which will be passed directly on to customers. Montana's decision to deregulate its electricity sector, and the concurrent decision by Montana Powcr Company to sell all of its electricity generation portfolio, coupled with subsequent plant closures, has placcd NorthWestern in a critically tenuous position of not being ablc to reliably serve its customers' needs during periods of peak loads, such as hot summer and most critically, cold winter days. This is in spite of NorthWestern acquiring a substantial amount of generation since 2011, none of which has been carbon-emitting. In NorthWcstcrn's 2017 and 2019 Electricity Supply Resource Plan (and in the 2020 supplement), NorthWestern identified significant deficiencies and risks to customers due to our portfolio's reliance on market purchases, much of which originates from out of state, plus a lack of reserve margin to reliably serve our customcrs. Thesc Plans empirically and analytically set forth particular capacity vulnerabilities that need to be addressed in order to continue to provide reliable service to our customcrs. In particular, NorthWestern identified a need to have resources available to serve 20-hour, 10-hour, and 5-hour periods in the future when there will be capacity portfolio deficits. Notably, NorthWestern at that time did not identify a need for ncw baseload capacity. As stated in thc 2019 ERPP, "NorthWestern's resource portfolio generally generates enough energy to serve average load, but is significantly short both pcaking and flexible capacity." A key reason that NorthWestern did not plan for ncw baseload capacity was that it had made substantial investments in Colstrip to comply with the 2012 MATS Rule and regional haze requirements. NorthWestern knew that Colstrip would be able to achieve Clean Air Act statutory and health-based standards over the medium-to-long tcrm. NorthWcstcrn had contemporaneous public assurances from EPA to that effect. And NorthWcstcrn knew that there wcrc no significant pollution control technology advancements in thc offing that would change control performance. Consequently, the 2019 ERPP and 2020 Supplement focused investment on thc identified pcaking and flexible capacity needs, as well as improving transmission capabilities. Based on those identified needs, NorthWestern issued a Request for Proposals (RFP) in January 2020. This RIP was explicitly for any type of generation that was ablc to provide 12 Sierra Club FOIA 2025-EPA-04883 ED_018388_00000308- 00013 SC_EVERSPLIT0006150