Northwest Renewable News

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bill introduced in Montana aimed at killing-off renewable energy projects January 21, 2009

Developers of small renewable-power projects Tuesday blasted a bill that changes rules used to determine their sales price and contracts, saying it’s an effort by NorthWestern Energy to stall the projects.

Dave Healow, a Billings developer of small wind-power projects, said NorthWestern has a history of delaying and resisting negotiations with small projects that, in most cases, must sell their power to the utility.

“This bill aids them in all of these tactics,” he told the Senate Energy and Telecommunications Committee. “Any delay you pass favors the utility and makes development of these projects more difficult.”

Healow was among several small-project developers and their representatives opposing Senate Bill 178, which is sponsored by Sen. Kelly Gebhardt, R-Roundup.

After the hearing, Gebhardt asked the panel to delay voting on the measure, so he could work on some amendments that might make the bill more palatable to opponents.

NorthWestern Energy, the state’s largest electric utility with more than 300,000 customers, supports the bill, as does Montana-Dakota Utilities.

SB178 directs the Public Service Commission to consider specific, additional factors when setting the price NorthWestern pays for electricity from small, independent producers of renewable power, such as wind or hydropower.

It also extends from four months to nine months the time the PSC can take to make its decision.

State and federal law requires utilities to buy power from these small renewable-power projects, but the PSC must determine the price and, when the utility and the project can’t agree, the contract terms.

John Fitzpatrick, executive director of government affairs for NorthWestern, said the company generally pays above-market prices for this power and can’t always rely on it being available, as is the case with wind power.

The PSC has a “one-size-fits-all” price for these contracts and doesn’t consider the value of the power to the utility, he said. SB178 says the PSC must take into account whether and when the power is immediately available, and adjust the price accordingly, he said.

The bill also requires the small-project producers to sell NorthWestern something called “renewable energy credits,” which the utility can use to meet state requirements to buy a minimum amount of renewable power. Fitzpatrick said current law allows the developer to sell the credits to anyone, depriving NorthWestern of its ability to meet the renewable-power standards.

Small-project developers said Tuesday that the bill gives utilities more legal sway to determine the value of the power, rather than allowing the PSC to use its own independent analysis.

Healow also said the prices paid to his current wind-power projects by NorthWestern are below market prices, and that the higher overall cost quoted by NorthWestern is because of projects whose prices were determined more than 20 years ago.

Ben Singer, who develops small hydroelectric projects, said the law adds another layer of complexity and delay to a process that already can take years to get a project going to arrange a contract with NorthWestern or other utility.

“The more complex the law becomes, the more it will favor the side with the most lawyers,” he said.

“This bill is just another roadblock for renewable generators in Montana,” said Suzanne Bessette, a Helena attorney representing a group of small power producers. “If passed, it will reduce the ability of renewable generators to get project financing and to sell their power.”


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