NorthWestern completes $143m buy of Beethoven Wind farm in South Dakota

NorthWestern Corp. d/b/a NorthWestern Energy (NYSE: NWE) announced Sept. 25 that it has reached a stipulated settlement deal with the South Dakota Public Utility Commission staff concerning NorthWestern’s pending electric rate case and has completed its acquisition of the 80-MW Beethoven wind project located near Tripp, S.D., from BayWa r.e. Wind LLC for $143 million.

The settlement agreement requires a majority approval by the three South Dakota PUC commissioners. If approved, NorthWestern would be allowed to increase base rates by $20.2 million annually compared to the original request of $26.5 million.

The settlement agreement would also place the Beethoven wind project into the company’s South Dakota rate base. As a rate-based resource, customers are anticipated to save approximately $44 million compared to the existing 20 year power purchase agreements with BayWa r.e. The Beethoven project was not submitted in the rate filing made in December; however, under the stipulated agreement the company would be allowed to collect an additional $9.0 million annually for the project.

Under the agreement, NorthWestern would be authorized to earn a 7.24% rate of return on rate base. A hearing is currently scheduled for Oct. 27-30, and the commission is expected to make a final determination in the case by the end of the year.

NorthWestern Energy provides electricity and natural gas in the Upper Midwest and Northwest, serving approximately 692,600 customers in Montana, South Dakota and Nebraska.

The Federal Energy Regulatory Commission on Sept. 21 had approved an application from NorthWestern Corp. and Beethoven Wind LLC for approval of NorthWestern’s buy of the generating assets associated with Beethoven’s 79.55 MW wind facility located in South Dakota, within the Western Area Power Administration–Upper Great Plains East (WAUE) balancing authority area. Pursuant to two long-term power purchase agreements (PPAs), NorthWestern has been contractually entitled to all of the facility’s electrical output through June 2035. 

Beethoven is a wholly owned subsidiary of BayWa r.e. Wind LLC (BayWa Wind), which is 95% owned byBayWa r.e. USA LLC (BayWa USA) and 5% owned by the President and CEO of BayWa Wind. BayWa USA is a wholly owned subsidiary of BayWa r.e. renewable energy Gmbh (BayWa Gmbh), a company organized under the laws of Germany. BayWa Gmbh is a wholly owned subsidiary of BayWa AG, also a company organized under the laws of Germany.

Beethoven Wind told FERC in a Sept. 28 notice: “On September 21, 2015, the Commission issued an order pursuant to Section 203 of the Federal Power Act approving a transaction (the ‘Transaction’) whereby NorthWestern acquired 100 percent of the membership interests of Beethoven. On September 25, 2015, the parties consummated the Transaction. It is BayWa Wind’s understanding that, as described in the application for the Commission order pursuant to Section 203, Beethoven will be merged into NorthWestern, NorthWestern will be the surviving entity of this merger, and Beethoven will cease to exist. Pursuant to the Transaction, BayWa Wind will make appropriate filings with the Commission to terminate Beethoven’s market-based rate tariff, as well as its QF and EWG certifications.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.