Study says natural gas plant proposed near Great Falls could increase power costs

A new study says construction of a natural gas plant to supply power to central and southern Montana could lead to a sharp spike in retail electricity rates.

Southern Montana Electric Generation and Transmission Cooperative is considering building a 120-megawatt gas plant near Great Falls. SME supplies power to more than 50,000 customers served by five smaller co-ops.

A study done for one of those co-ops, Yellowstone Valley Electric Cooperative, says high fuel prices and other factors could drive up electricity costs by more than 70 percent if SME builds the gas plant.

SME's previous plan to build a coal plant near Great Falls were scuttled last month. The project ran into financing troubles and opposition from some local residents and environmentalists.

The gas plant study was done by EES consulting.

"Yellowstone Valley did not think the coal plant was a good idea," said the co-op's attorney, John Crist. "The alternative that has been proposed is this (gas plant) and it doesn't look like that's a good idea either."

SME general manager Tim Gregori did not return calls from The Associated Press seeking comment.

In December, Yellowstone Valley sued SME seeking to get out of its power supply contract and recoup $7 million it had invested in developing the coal plant.

That suit is set for trial in April 2010, Yellowstone Valley manager Terry Holzer said Tuesday.