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Boulder Hydro Limited Partnership v. Northwestern Corp.

Supreme Court of Montana

October 9, 2018

BOULDER HYDRO LIMITED PARTNERSHIP, Plaintiff and Appellant,
v.
NORTHWESTERN CORPORATION, d/b/a NORTHWESTERN ENERGY, Defendant and Appellee.

          Submitted on Briefs: August 15, 2018

          District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. BDV-2016-437 Honorable Michael F. McMahon, Presiding Judge

          For Appellant: Monica J. Tranel, Tranel Law Firm, P.C., Missoula, Montana.

          For Appellee: John Alke, Northwestern Energy, Helena, Montana.

          OPINION

          Ingrid Gustafson Justice.

         ¶1 Plaintiff independent power producer Boulder Hydro LP (Boulder) appeals from an order granting summary judgment to NorthWestern Corporation d/b/a NorthWestern Energy (NWE) in the First Judicial District Court, Lewis and Clark County. We affirm.

         ¶2 The issue on appeal is:

         Whether the District Court erred in granting summary judgment to NWE?

         FACTUAL AND PROCEDURAL BACKGROUND

         ¶3 This is a contract pricing dispute between NWE and Boulder. The Public Service Commission (PSC) regulates Montanan energy sales. The PSC issues orders controlling how utility companies like NWE and qualifying facilities (QFs) like Boulder agree to pricing and term length in their Power Purchase Agreements (PPAs). The PSC sets pricing in PPAs by giving NWE a set list of options from which the QFs may choose, measuring increments of energy in megawatt hours (MWh), e.g., Order 6501f (PSC docket D2003.7.86). NWE provides QFs these PSC-approved options in Exhibit A to the PPA.

         ¶4 There have been several PPAs between Boulder and NWE (or its predecessor Montana Power): one from 1985-2003, one from 2003-2007, and the currently litigated PPA dated July 1, 2007. The 2007 PPA offered by NWE to Boulder included three pricing options set by the PSC in Exhibit A:

1. Rate Option 1 is a fixed payment rate of $49.90 per MWh and allows a term from 7 to 15 years . . . .
2. Rate Option 2 consists of two sub-options: 2(a) and 2(b).
a. Option 2(a) is designed to reflect NorthWestern's actual hourly incremental market purchases ..... This hourly rate per ...

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