NorthWestern requests ‘time out’ on MSTI

NorthWestern Energy (NYSE:NWE) has halted activity on the $1bn Mountain States Transmission Intertie (MSTI) project until the company can get a clearer idea of the project’s prospects and timeline. 

In an Aug. 2 letter to the Montana Department of Environmental Quality (DEQ) and the Bureau of Land Management (BLM), NorthWestern said that despite the $13.8m the company has invested in the four years since the company submitted its Major Facilities Siting Act application to the DEQ and its environmental report to the BLM, the goal posts for completing the environmental review “continue to be a moving target.

“Given this critical juncture in the MSTI project, NorthWestern is calling for an immediate ‘Timeout’ of all activity related to the cost recovery agreement with your agencies, the cooperating agencies and all third party [environmental impact statement (EIS)] consultants conducting the environmental review,” the company said in the letter. “In general NorthWestern’s concerns about the current environmental review process largely relate to the ever changing scope, schedule delays to complete the EIS and the significant costs of these delays.”

MSTI has encountered multiple delays, the most recent caused by the Idaho BLM’s requirement that transmission projects in the state evaluate alternate routes in order to accommodate environmental considerations for the sage grouse’s habitat. The sage grouse is ground-dwelling bird that was named a candidate for the endangered species list by the U.S. Fish & Wildlife Service (FWS) in 2010. In December 2011, the FWS issued an interim policy for protecting and managing sage grouse habitat in the West.

NorthWestern has funded all agency regulatory work, including third party consultants, the company said.

“Despite this incredible amount of activity, your agencies and contractors have yet to provide a reliable scope, schedule and cost estimate necessary to complete the major milestone activities of a draft EIS and final EIS with some reasonable assurances and, importantly, accountability,” the company said in the letter.

NorthWestern said the stoppage of activity should be in effect until an “appropriate meeting” of the agencies’ management and project management staff can discuss its concerns.

The Idaho BLM and Montana BLM held a conference call with the company “late last week,” according to Idaho BLM spokesperson Heather Feeney.

“We told the company we’d estimate sort of a plus or minus six months of additional time necessary to do the work needed at this point,” Feeney told TransmissionHub on Aug. 15. “We can’t give hard and fast guarantees though; it takes the time it takes. I don’t want to give the impression that the six months is a hard commitment, that if we resumed work today we’d be done in February; we can’t do that. What we commit to is doing the analysis thoroughly.

Part of the BLM’s work involves cultural resource surveys that can only be conducted seasonally, specifically outside of the winter months, Feeney said.

“With the latest sage grouse issue, our timeline delay is six months, but the agencies haven’t been able to get us a time frame,” Claudia Rapcoch, a spokesperson for NorthWestern, told TransmissionHub Aug. 15. “What we’ve said is stop until such time as we can get back together and understand the scope and time frame and have some reasonable assurance that we’re going to get a draft EIS.”

Feeney noted that the sage grouse delays that MSTI is seeing are affecting other projects in the West.

“The delays affecting MSTI are not any more than normal; there are other projects in the same boat when it comes to sage grouse impact analysis,” she said, adding that the BLM can complete its environmental review and make a decision on MSTI before the interim policy is expected to end in 2014.

The 2014 deadline is as far out as it is because the BLM needs to look at “hundreds of land use plans” across the West; for the EIS for MSTI, the agency needs to look at the environmental impacts to resources on the lands where the proposed route will be, which may be a “handful” of lands, Feeney said.

“The 2014 date really doesn’t have any bearing on project evaluations like MSTI. Those can go forward,” Feeney said. “It’s important to understand the reason we’re not doing any work today on MSTI is because the company asked us to.”

Though the interim policy was issued in December 2011, the Idaho BLM sent a letter to NorthWestern advising the company of the extra efforts it would have to make with respect to the sage grouse six months later, in June.

“When the national sage grouse planning effort started, we started to get better information; the interim policy went into effect, and we sent the letter to NorthWestern about the sage grouse facet of MSTI,” Feeney said. “We came to have this more detailed information about sage grouse habitat that exists in the proposed project area for MSTI and said, ‘This is important, we need to consider this in the EIS for MSTI, we need to notify the applicant and let them know we need to be doing that.’”

In July, NorthWestern CEO Robert Rowe said that the line’s fate will be determined by the Bonneville Power Administration (BPA), which is considering “several” options to move power to loads in southeast Idaho. If BPA chooses an alternative to MSTI, the company may walk away from the project, Rowe said.

As of June 30, Northwestern had capitalized $23.5m of preliminary survey and investigative costs associated with the project.

About Rosy Lum 525 Articles
Rosy Lum, Analyst for TransmissionHub, has been covering the U.S. energy industry since 2007. She began her career in energy journalism at SNL Financial, for which she established a New York news desk. She covered topics ranging from energy finance and renewable policies and incentives, to master limited partnerships and ETFs. Thereafter, she honed her energy and utility focus at the Financial Times' dealReporter, where she covered and broke oil and gas and utility mergers and acquisitions.