Combination utility NorthWestern Energy signed natural gas supply, management and distribution delivery contracts with two new ethanol plants being developed in eastern South Dakota.

The company will supply about 6 Bcf/year to the James Valley Ethanol and VeraSun ethanol plants, the seventh and eighth ethanol facilities in South Dakota that NorthWestern Energy has signed on for natural gas service.

NorthWestern Energy has begun construction of a 19-mile, 6-inch diameter steel pipeline to serve the James Valley plant, which is under construction and scheduled to be operational in the second quarter. The facility is expected to use 2 Bcf/year for its new 45 million-gallon-per-year plant being developed near Groton, SD. James Valley is managed by The Broin Companies of Sioux Falls.

The other contract covers about 4 Bcf/year of supply and delivery to VeraSun’s new plant in Aurora, SD, which is scheduled to be operational during the fourth quarter. NorthWestern will begin construction on a 28-mile, 8-inch steel pipeline to serve the 100-million-gallon-per-year ethanol plant in the spring of 2003.

“Our South Dakota service area is rich in production agriculture. Any time we can expand value-added opportunities such as ethanol, everyone wins,” said NorthWestern Energy CEO Mike Hanson. “It is especially rewarding for NorthWestern Energy to play a role in generating economic development initiatives in eastern South Dakota.”

NorthWestern Energy began serving natural gas to its first ethanol plant in Scotland, SD, more than 10 years ago. Today, the company purchases, delivers and manages the natural gas needs for ethanol facilities in Aberdeen, Huron, Wentworth and Big Stone, SD. In addition to the James Valley Ethanol and VeraSun plants, NorthWestern Energy previously signed a contract to provide 2 Bcf/year of natural gas to serve Great Plains Ethanol for its plant being constructed near Chancellor, SD, which also is scheduled to be operational in 2003. The combined annual usage of natural gas for the eight plants is estimated to be more than 11 Bcf/year.

NorthWestern Energy provides electricity, natural gas and related services to more than 590,000 customers in Montana, eastern South Dakota and central Nebraska. The company is a partner business of NorthWestern Corp.

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