On Dec. 13, renewable energy advocates filed suit against the Public Service Commission in Cascade County District Court over the commission’s decision to make major changes to the rate structures Northwestern Energy is required to employ with small renewable energy facilities. The plaintiffs—the Montana Environmental Information Center and Vote Solar along with renewable energy plant developer Cypress Creek Renewables—are disputing the commission’s decision to cut prices from $66 per megawatt hour to $31, and contract lengths from 25 years to 15.
The number of solar projects around the state in various stages of active development plummeted from about 100 to roughly a tenth of that, and that spells a significant loss of economic opportunity for the state, according to Cypress Creek Director of Market Development Casey May.
“It is a long-term investment in the community,” May says. “The primary benefit comes in the form of property taxes that we would pay into the local communities where these projects would be situated.” That’s in contrast to the property taxes that Northwestern pays, which expense the company is allowed to pass on to its customers.
May also says that the construction and maintenance of solar plants would require the hiring of local workers. “We would love to bring those jobs home and have Montanans doing that work,” May says. “There are regular intervals of maintenance that are required, as well as vegetative maintenance on the property.”
The PSC says the lower rates are a more accurate representation of a market in which energy prices have plummeted, and if those rates don’t support development, that’s not the commission’s concern. “This commission is not in the business of promoting the development or the construction of power plants that customers don’t need,” PSC spokesperson Chris Puyear says. “If the rate is too low for a project to be developed, that’s a signal that customers don’t actually need that electricity.”
The main contention of the lawsuit is the way the PSC calculated the rate and contract length. “The capacity contribution we are making to the system and the grid is not being calculated in a way that honestly represents the value that our solar plants would provide to the greater electric system,” May says.
Two components of the suit address the commission’s perceived politics. One is the claim that the commission made decisions based on what it anticipated as reduced clean energy regulatory pressure from the current presidential administration—a claim to which the PSC readily admits in its own fact sheet about the rates, which seems to suggest justification for rolling back carbon reduction tariffs in the EPA’s movement toward repealing the Clean Power Plan. The other is the suit’s list of opinion columns and editorials written by members of the commision, presented by the plaintiffs as evidence of prejudice against renewable energy.
Puyear says the commission is only trying to provide consumers with the best rates it can. “Those kinds of social public policy goals of economic development and employment and environmental impact, those are the domain of the Legislature. Our mandate is very clear. We’re to select the lowest cost resource to reliably serve customers.”