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Montana, Missoula could lose renewable energy goal if NorthWestern Energy avoids fine

Crews install a solar energy array on Kettlehouse Brewing in Bonner in partnership with the Missoula Electric Co-op in 2018. (Martin Kidston/Missoula Current file)

The Legislature is halfway toward not only allowing NorthWestern Energy to dodge a $2.5 million fine, but also eliminate Montana’s requirement for utilities to use renewable energy.

After a March 17 hearing, a House committee is still considering Senate Bill 237, sponsored by Sen. Doug Kary, R-Billings, which would eliminate a requirement for large-scale utilities to buy a certain amount of electricity from small locally-owned community energy projects as part of Montana’s Renewable Portfolio Standard.

“In Missoula we have both city and county governments working with the utility on carbon-neutral and carbon-free production. They’re taking leadership; they want the citizens involved,” said Jim Morton, Human Resource Council director. “No longer do we want (electricity) coming from far away. If you read this bill, it takes away the community part and goes back to more corporate-centered production.”

Created by the 2005 Legislature, the Renewable Portfolio Standard requires large utilities to acquire 15% of their electricity from renewable resources. That’s not much compared to other states such as Colorado at 30%, Nevada, which is aiming for 50% renewable energy by 2030, and Washington, which plans to be 100% renewable by 2045.

NorthWestern Energy and Montana-Dakota Utilities can reach that 15% by a combination of buying renewable energy credits and buying electricity from small energy projects owned by Montanans. The latter requirement was created in 2012 to both encourage community projects and create jobs.

But while Montana-Dakota Utilities has complied by encouraging and using community-generated power, NorthWestern Energy has not. But it also hasn’t paid the penalty for each year it didn’t comply. That’s partly why NorthWestern Energy lobbyists are pushing for this bill.

Since 2012, NorthWestern Energy has asked the Republican-led Public Service Commission for waivers and got them. The utility had made its own requirement that a small project had to come online within 18 months. None had, because it’s nearly impossible to take care of all the permits and requirements that need to be met, normally a two-year process.

The Montana Environmental Information Center sued NorthWestern Energy in November 2018 for not developing community energy projects and sued the PSC for granting waivers in 2015 and 2016. PSC staff estimated the penalty for each year of noncompliance at $1.2 million.

In August 2019, Lake County judge James Manley ruled in favor of MEIC. NorthWestern Energy was assessed a $2.5 million penalty, but it has yet to pay because it’s appealing the ruling in the 9th District Court of Appeals.

This isn’t the first time legislators have tried to eliminate the community project component of the Renewable Portfolio Standard. In 2017, Sen. Keith Regier, R-Kalispell, carried a similar bill. He said the problem was the requirement that projects be owned by locals, but few Montanans have the millions required to get a project going.

However, that was before the MEIC decision. If Kary’s bill passes, it will not only wipe out the community project requirement, but also NorthWestern Energy won’t have to pay for breaking the law. Kary’s bill already passed the Senate on a party-line vote.

The thing is, that penalty money is intended to augment low-income and tribal energy assistance programs. Low-income energy programs receive the majority of their money from federal funding but Montana ratepayers also pay a small percentage as a 2.4% tax.

If Northwestern Energy paid its penalty, Montana’s low-income assistance program would receive an additional $1 million and the rest would go to six tribal low-income energy assistance offices, including one on the Flathead Reservation.

Keaton Sunchild, Western Native Voice political director, said this Legislative session has already produced a number of bills that are making life harder for Native Americans, but SB 237 has a disproportionate effect on tribal members by robbing the tribal offices of money they are due.

“Everybody wants the Native American vote when it’s campaign time. But once election day comes and goes, it’s time to move on and there’s no real dialogue anymore,” Sunchild said. “At some point, there has to be a line drawn between giving corporations an easier path to success and making a path to a successful life just as easy for everyday Montanans. This bill isn’t aimed at helping everyday Montanans – it’s aimed at helping those that are well-off in our society.”

Morton said the old Montana Power Company used to contribute to the community by providing good jobs and benefits, buying all their vehicles and equipment locally, and even supporting the symphony, but NorthWestern Energy doesn’t. Instead of opposing its customers and the community project requirement, NorthWestern Energy could be helping groups like the All Nations Health Center in Missoula develop a solar project on their property that could then contribute energy to the grid, Morton said.

“Why do you want to repeal it? I know it’s onerous. But why don’t they engage their customers? You need customer loyalty, I don’t care what business you’re in,” Morton said.

SB 237 isn’t the bill that would let NorthWestern Energy off the hook.

House Bill 576 would eliminate Montana’s Renewable Portfolio Standard completely, allowing utilities to focus on fossil-fuel energy, even though many parts of the nation are increasingly moving toward cheaper renewable sources. HB576 passed the House on a party-line vote.

On March 23, NorthWestern Energy lead lobbyist David Hoffman introduced an amendment to HB576 that would combine the two bills to ensure that the company doesn’t have to pay the $2.5 million penalty.

Contact reporter Laura Lundquist at lundquist@missoulacurrent.com.