Green tariff could help spur renewable energy development in Montana
Hiring a consultant won't be a silver bullet in helping the cities of Missoula, Bozeman and Helena achieve their 100% clean electricity goals, but it gives them a seat at the table in designing what could be a significant shift in Montana's energy future.
The Missoula City Council on Wednesday approved an agreement with the three other cities, along with Missoula County, to work with NorthWestern Energy in designing a green tariff for the development and purchase of renewable power.
“We see this as a great step in the right direction” said Diana Maneta, the sustainability program manager with Missoula County. “We're hoping for a green tariff that results in as much new renewable energy as possible in the state of Montana.”
Meant to incentivize the development of renewable energy with increased demand and usage, a green tariff is essentially a special rate for electricity available for consumers solely produced by renewable energy.
That rate could be higher, the same or lower that standard electricity. According to Maneta, it varies by state, and with green tariffs not available yet in Montana, the end cost is still unknown.
That’s where the consultant comes in.
“The purpose of bringing the consultant on board is to figure those details,” she said. “It's very detail-specific in terms of how the costs and credits are designed, and then the cost of the resources that are built to go along with this. So what it'll look like on your bill, if you do sign up is still a little bit uncertain. What I can say is, is that you will likely pay the rate, and there will be two additional line items on your bill.”
The City of Missoula would contribute up to $20,000 previously allocated from the Fiscal Year 2021 budget to the consultant who would conduct a two-year study. More could be allocated in the Fiscal Year 22 budget.
The same amount will be contributed by Missoula County, plus any additional amounts allocated in next fiscal year’s budget.
Bozeman will contribute up to $90,000 in total for both fiscal years, and Helena will contribute up to $8,000 the first fiscal year, in addition to amounts allocated in the FY22 budget.
The consultant would collaborate with NorthWestern Energy in the examination of green tariffs, with it being Northwestern Energy’s responsibility to file the green tariff to the Montana Public Service Commission.
Since 2019, NorthWestern Energy has already been in the process of building a green tariff program for local governments and others in Montana, after the PSC directed them to investigate the possibility of such an option.
“We've had a good experience with Northwestern,” Maneta said. “So far, they have expressed enthusiasm that we're bringing a consultant on board to help advise and inform that process.”
Missoula County in July declined participation in the existing development of a green tariff program led by NorthWestern Energy, saying that it didn’t encourage the development of new renewable energy, instead just redirecting it to the county.
However, Maneta viewed this approach as being able to work more at the table with NorthWestern and local governments’ clean energy goals being better represented with the consultant.
City council president Bryan von Lossberg said the collaboration with local governments is a more effective way to approach a consultant.
Council member Stacie Anderson noted that this wouldn’t be the only step the city takes in their clean energy goals.
“This isn't a silver bullet for achieving our clean energy goals,” she said. “It's really important to reiterate that it's going to take this and a whole host of other things. But this is a really positive step in the right direction.”