NorthWestern Corp., d.b.a. NorthWestern Energy, has closed a deal to purchase the 40 MW Spion Kop Wind Project from Compass Wind LLC.
The wind farm, which entered commercial operation earlier this month, is located near the central Montana community of Geyser. The Montana Public Service Commission (MPSC) approved placement of the $86.1 million project into the company's regulated rate base in February. Both the energy and associated renewable energy credits will be used to meet Montana's 15% by 2015 renewable portfolio standard.
Under the terms of the filing with the MPSC - which included a 10% authorized return on equity, a 5% estimated cost of debt and a capital structure of 52% debt and 48% equity - this project represents an approximate levelized price of $54/MWh for a 25-year period, which NorthWestern says is significantly less than the $69/MWh current qualifying facility rate for a project with similar attributes.
NorthWestern expects to recover the Spion Kop Wind project in customer rates beginning in December.