Renewable Energy Requirements Out Of Reach For NorthWestern Energy

May 18, 2017

Montana’s largest utility provider announced Wednesday it is looking for small-scale renewable energy projects that it’s required by law to buy. But utilities and their regulators in Montana say that requirement is outdated, and that the law should be repealed.

A 2005 state law requires Montana utilities to buy a total of 75 megawatts of energy from small-scale, locally owned producers of renewable electricity from wind, solar, and hydro sources.

NorthWestern Energy, the state’s largest utility, is about 40 megawatts short of what it needs to comply with the law, after buying all available energy from small local producers. That’s according to a spokesperson from the Public Service Commission, which regulates utilities.

When NorthWestern can’t find enough small-scale local producers, which it often can’t, it must apply for a waiver from state utility regulators, or be penalized with a fine.

The utility company joined the all-Republican elected Public Service Commission in lobbying lawmakers to remove this law during this year’s legislative session.

In January, PSC vice-chairman Travis Kavulla testified in the state Senate that the law does not help grow economically viable renewable energy projects, and there is already a lot of wind, solar, and hydro development going on in the state.

"Keeping this law on the books, candidly, is a waste of time,” Kavulla said.

But the law’s supporters say it does help create local investment in renewables, and point to six small local renewable energy producers in the state as evidence.

Jeff Fox, Policy Manager with the Montana Renewable Northwest, testified against repealing the law:

“The intention here was to drive investment in local communities, it is true that this is not working. But the intention behind driving rural economic development is crucially important to the state of Montana. Renewable energy development is one of the ways you can do that.”

State lawmakers passed a bill to remove the renewable energy requirement, but Governor Steve Bullock vetoed it.

That leaves Northwestern Energy in a tough spot, says company spokesman Butch Larcombe:

“This issue is the law requires these projects be at least 50 percent locally owned. And the reality is developing wind farms, or solar projects or new hydro projects, is really expensive and it has been very difficult for local owners to build, to afford, these projects. So we’ve kind of been going around in circles on this.”

Governor Bullock says he’s willing to work with lawmakers to come up with a renewable energy requirement compromise for the next legislative session in 2019.