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NorthWestern gets to power Dakota Access pump station

PIERRE -- The state Public Utilities Commission gave its blessing Friday to an agreement for NorthWestern Energy to provide electricity to the pump station planned in rural Spink County for the proposed Dakota Access oil pipeline.

PIERRE - The state Public Utilities Commission gave its blessing Friday to an agreement for NorthWestern Energy to provide electricity to the pump station planned in rural Spink County for the proposed Dakota Access oil pipeline.

The pump station is near Crandon, east of U.S. 281 and southeast of Redfield within the designated rural territory of Bath-based Northern Electric Cooperative. It will be on land sold to the pipeline company by Donald Gene and Rita Mary Massat.

NorthWestern, an investor-owned utility that primarily serves municipalities, has a 110-kilovolt supply line that runs past the property where the pump station would be built.

Because of the location, NorthWestern needed what's known as a service-rights exception from the PUC. The commissioners voted 3-0 to grant it Friday.

PUC chairman Chris Nelson quizzed lawyers for each of the three parties and the commission's staff about the exact scope of the agreement.

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The four attorneys said NorthWestern will supply all of the facilities and buildings now planned at the pump station and can provide additional electricity if the pump station's load increases.

They further agreed NorthWestern can't provide the power to any additional buildings that might be constructed later outside of the current plan.

The agreement also states Northern Electric isn't consenting to NorthWestern engaging in service in any other part of its territory.

Many of the documents filed in the matter received confidential treatment from the commission and its staff at the request of the companies.

Commissioner Kristie Fiegen agreed with the purpose of Nelson's line of questions.

"Any time we work with exemptions we want to make sure it's written in the order properly so we're not before the circuit court," Fiegen said.

Nelson said he appreciated the sides being explicit in their agreement.

"I think it is crystal clear in my mind, so we should not have to visit this issue ever again," Nelson said, emphasizing "ever."

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With the service-rights exception now in place, NorthWestern next needs PUC approval for a contract with deviations to serve Dakota Access.

NorthWestern sent the 10-year agreement Thursday to the PUC.

It calls for the rate charged to Dakota Access to deviate from normal until May 1, 2019, and return to the current rate after that.

"The additional revenue will be credited to the cost of service and will more than offset

the additional costs," the company told the PUC.

Another spot in the filing says the deviation calls for NorthWestern to charge Dakota Access the rate that was in place before NorthWestern's rate increase of July 1, 2015.

Dakota Access will be the only company that receives the discount, but other customers will benefit indirectly as a result, according to NorthWestern's filing.

The demand from Dakota Access is considered by NorthWestern as "a large load" of 9,000 kilowatts at start-up and reaching 13,000 KW when the pump station is operating at capacity.

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That's equivalent to roughly 90,000 to 130,000 electric lamps burning 100-watt bulbs at the same time.

NorthWestern officials told the PUC in a letter that the agreement and work-papers "provide proprietary information concerning both NorthWestern and Dakota Access, including the pricing of electric service."

The letter continued, "Sharing this information to third parties may provide competitive advantages to the competitors of both NorthWestern and Dakota Access."

Lawyers for Northern Electric and its wholesale power supplier, East River Electric Power Cooperative at Madison, previously signed confidentiality agreements regarding the service-rights exception.

"The last thing this chairman wants is a fight over additional facilities at some later time," Nelson said.

PUC lawyer Adam de Hueck said the contract agreement assures existing customers of NorthWestern Energy won't be adversely affected.

NorthWestern won't have to build any transmission lines to reach the Dakota Access site and the service lines would be underground, de Hueck said. There will be two sets of lines.

A Houston, Texas-based group wants to construct the Dakota Access pipeline to carry oil from the Bakken area of North Dakota through South Dakota and Iowa to a connecting point in southern Illinois.

The Spink County site would be the one pump station in South Dakota. There are others planned along the route.

The company has received its South Dakota project permit from the PUC and has clearance from North Dakota and Illinois regulators. The company is currently in the permitting process in Iowa.

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