Electric Utility Regulators Modify Contract Terms For Small Energy Producers
Montana energy regulators Tuesday set contract terms for what NorthWestern Energy pays small generation facilities, like wind and solar, for the energy they produce.
Regulators on the Montana Public Service Commission lengthened potential contracts from a maximum 15 years to 20 years flat.
They also granted renewable producers more flexibility in charging an electric utility for money the utility saves by purchasing renewable energy instead of fossil fuels. For instance, the new terms permit facilities to collect the amount the electric utility saves by avoiding the emission of carbon dioxide.
The terms also include recalculations for how a small energy producer arrives at avoided costs and what comparison points to use.
Earthjustice attorney Jenny Harbine represents renewable energy interests on behalf of advocacy groups Montana Environmental Information Center and Vote Solar.
“The decision signals that the commission is moving in the right direction in terms of establishing fair compensation and a more level playing field for independently owned wind and solar resources,” said Harbine.
The advocacy groups sued the PSC and NorthWestern in 2017 over contract length and rate cuts for small solar projects. Two different Montana Supreme Court decisions in 2020 affirmed that regulators and the utility unfairly set terms for renewable energy.
The new contract terms the PSC set Tuesday take those legal rulings into consideration. PSC Vice-Chair Brad Johnson voted to pass the terms.
“I am as unhappy as the other commissioners with regard to the specifics that are essentially being forced upon us,” said Johnson.
Earthjustice attorney Jenny Harbine says it’s still unknown how the new terms translate to rates for small wind and solar projects in Montana.