Montana-Dakota Utilities Co. applied Oct. 12 at the Wyoming Public Service Commission for approval of a Small Qualified Facility Power Purchase Agreement with the City of Sheridan, Wyoming.
On Sept. 16, Montana-Dakota entered into this agreement. It covers a 240-kW hydroelectric facility to be constructed at the City of Sheridan’s pressure reducing vault located on Beckton Hall Road in Sheridan. The agreement between the City of Sheridan and Montana-Dakota is for a 20-year term with Montana-Dakota purchasing the capacity and energy provided by the facility.
Under the agreement, Montana-Dakota will purchase the total energy output of the facility, estimated to be 837 MWH on an annual basis. Montana-Dakota will also purchase the capacity provided by the facility based on the maximum output at the time of the company’s system peak up to 240 kW per month.
This is a qualifying facility as defined by the Public Utility Regulatory Policies Act of 1978 and Wyoming Rules Chapter 3, Section 35. While not required to do so, the City of Sheridan requested certification as a QF with the Federal Energy Regulatory Commission.
The price for energy and capacity to be paid under the terms of the agreement reflects the currently effective avoided energy cost of $0.02164 per Kwh and avoided capacity cost of $15.68 per kW per month under Parallel Generation Rate 57. The avoided costs were determined in accordance with Chapter 3 Section 35 (f) of the Wyoming Rules.