Missoula, Bozeman, Helena working on green tariff with NorthWestern Energy

The City of Missoula this week approved an agreement with the cities of Bozeman and Helena to hire a consultant to work with Northwestern Energy in designing a green tariff that could be used to purchase renewable energy.

All three cities have adopted a resolution to achieve 100% clean electricity by 2030, and expanding the state's renewable energy options through a green tariff is seen as one of the best ways of stepping closer to that goal.

“We see this is the most promising near-term opportunity to get new, large-scale renewables built in Montana to achieve our 100% clean electricity goals,” said Diana Maneta. “We see this is a great step in the right direction.”

Maneta, the energy conservation and sustainability coordinator for Missoula County, which is also a partner in the agreement, said green tariffs are an increasingly common tool that customers of regulated utilities can use to purchase power from clean energy sources, such as wind or solar.

“Green tariffs came about several years ago as a result of large corporations that had clean electricity goals,” she said. “In some states that had deregulated electricity markets, they could contract directly with a solar farm to achieve those goals. But in states with regulated monopoly utilities, that wasn't an option.”

In those states with regulated utilities, customers seeking to purchase clean energy through a tariff, or special rate, had to work directly with the utilities. But in Montana, there is no green tariff and most customers receive power from NorthWestern, a monopoly utility regulated by the Public Service Commission.

In 2019, the PSC directed NorthWestern to explore the possibility of developing a green tariff. That order came about as part of a settlement agreement between the power company and several other groups, including Walmart, the Montana Department of Environmental Quality, and the Montana Consumer Council.

“We do see this as a collaborative process with NorthWestern,” Maneta said. “They've been directed to at least explore one and are working, I believe, in good faith with stakeholders to do so. Our hope is to end up with a green tariff that NorthWestern supports, as well as our four local governments and other stakeholders.”

Maneta said the process of designing rates specific to a green tariff is complicated and beyond the reach of a single local government. Through the interlocal agreement, the four government partners will hire a specialized consultant to help NorthWestern develop the tariff.

If developed and approved, power customers in Montana would have an option of signing up and paying the rate for clean energy. That's of great interest to the four participating governments working to steer their urban areas toward a cleaner future.

“What the rate looks like or how it would differ is unknown. That's what's going to be figured out in the next few months,” Maneta said. “There might be a slight premium, it may be the same or there could be cost savings. It has varied in other states. It's very detailed and specific in terms of how the cost and credits are designed, and the cost of the resources built.”

Members of the City Council gave the agreement their full support. The initial cost of securing a consultant will cost the City of Missoula $20,000.

An additional amount could be budgeted for the purpose in the next fiscal year.

“Business in Montana, in Missoula and across the county are recognizing clean electricity as a smart business choice for any number of reasons,” said council member Bryan von Lossberg. “We have this opportunity to work collaboratively at the table on the design of that."