FERC Denies Complaint Over $23 Million in Network Upgrade Costs
On March 20, 2025, FERC denied Ponderosa Power, LLC’s (“Ponderosa”) complaint alleging that NorthWestern Corporation’s (“NorthWestern”) application of its large generator interconnection procedures (“LGIP”) was unjust and unreasonable or unduly discriminatory or preferential. The dispute centered around NorthWestern’s requirement for Ponderosa to fund approximately $23 million in network upgrades to accommodate the interconnection of its 70 MW wind-powered generation facility located in Musselshell County, Montana (“Project”).
In its complaint, Ponderosa argued, among other things, that the network upgrades NorthWestern identified are not necessary for their project under the applicable reliability standards. Ponderosa claimed that NorthWestern had assigned the project unnecessary upgrades, which meant the upgrades did not meet the “but for” criteria. According to Order No. 2003 and NorthWestern’s Tariff, “but for” facilities are upgrades that would not be needed if the new generation project were not being connected. Ponderosa also argued that even if the upgrades were deemed necessary, NorthWestern was applying Reliability Standard TPL-001-5.1 in a discriminatory manner. Ponderosa asserted that NorthWestern uses less costly measures like curtailment, load shedding, and generation redispatch for its own operations but is imposing expensive upgrades on Ponderosa instead.
In response to Ponderosa’s complaint, NorthWestern defended its decision, stating that the upgrades were necessary because its studies, performed in accordance with its LGIP and Reliability Standard TPL-001-5.1, identified legitimate thermal overloads and transient stability violations caused by the Project. NorthWestern emphasized that, under FERC’s rules for Network Resource Interconnection Service (“NRIS”), it is required to assess whether a generator can deliver full output to the system during peak demand without relying on temporary or operational fixes.
FERC determined that NorthWestern’s application of its LGIP to Ponderosa’s interconnection request was neither unjust or unreasonable, nor unduly discriminatory or preferential. FERC found that the network upgrades identified by NorthWestern were required under the “but for” standard, as they were necessary to address thermal and transient stability violations caused by the Project. FERC agreed that NorthWestern appropriately conducted its studies in accordance with Reliability Standard TPL-001-5.1 and its tariff, simulating required contingencies and adhering to the standard’s prohibition against using load shedding or curtailment to mitigate the specific violations identified. FERC also concluded that NorthWestern consistently applied its interconnection procedures for NRIS requests and found no evidence that Ponderosa was treated differently from other similarly situated customers.
A copy of the order, issued in Docket No. EL24-147-000, can be found here.
