In the minds of the public, Montana is awash in wind power projects – but a group of small power producers says it’s not so, and is pushing legislation it says will help make the perception a reality.
“(Montana is) missing the boat,” says Dana Dogterom, a partner in Two Dot Wind, which develops small wind power projects in rural central Montana. “At some point, we’re going to get so far behind, we’re not going to catch up.”
Dogterom and his colleagues are behind a bill they say will push NorthWestern Energy, the state’s largest electric utility, to follow state and federal law requiring it to buy electricity from small producers of “renewable” power, such as wind.
The utility, however, opposes the measure, saying power from the small projects is too costly.
“What they’re trying to do is tilt the balance, so we have to take more of (their) power, which is ultimately harmful to consumers,” says John Fitzpatrick, NorthWestern’s executive director of government affairs in Helena.
The power that NorthWestern would buy and is buying from smaller renewable power projects is folded into the electricity the utility sells to its 320,000 Montana customers.
At issue is House Bill 491, sponsored by Rep. Brady Wiseman, D-Bozeman.
Scheduled for a hearing Monday before the House Federal Relations, Energy and Telecommunications Committee, HB491 says if NorthWestern or other utilities don’t follow the law or bargain with the projects in “good faith,” they can be sued and fined up to $1,000 per day of any violation.
It also spells out more starkly how NorthWestern must arrange a contract to buy power from these small producers.
“We’re trying to put some teeth into the law, so that the utilities negotiate in good faith,” Wiseman says.
State and federal law already says utilities must buy from small producers of renewable power, if the producers meet certain qualifications.
The problem, Dogterum and others say, is that NorthWestern repeatedly drags it feet on complying with this law and agreeing to contracts to buy the electricity. The delays are costly for small producers and the utility seems to be making no real effort to close the deals, producers and their representatives say.
“The purpose of our bill is to break the stalemate,” says Mike Uda, an attorney representing the small producers. “These guys are ready to go. They could put people to work.”
Uda estimates that about 15 smaller projects providing some 115 megawatts of power could be developed, if they could arrange contracts with NorthWestern. They include wind and hydro power.
Fitzpatrick says the reason the utility isn’t jumping to sign these contracts is because it thinks the power is too expensive.
“NorthWestern has nothing to gain or lose in a power supply contract arrangement, because all of the costs in such an arrangement are passed directly through to the consumers,” he says. “We’re acting on the consumers’ behalf. Our effort is to keep those favorable to consumers.”
Under available contract terms, some small power producers are getting paid as much as $100 per megawatt hour, Fitzpatrick says, or much higher than the approximate $60 that NorthWestern residential customers pay now.
Supporters of HB491 say this argument doesn’t hold water.
Of the few contracts that have been agreed to, some are tied to market rates, which have reached $100 per mwh in the past year, Uda says. But the average annual price last year was $57, according to the utility’s own figures, he says – less than what consumers are paying for their power from NorthWestern.
Wiseman, the bill’s sponsor, says NorthWestern wants to expand its ownership of power production, and therefore is resisting any purchases from independent projects.
“They want to shut everybody else out,” he says. “They only want (projects) in which they have equity.”
NorthWestern, the former Montana Power Co., got rid of all its power production in the 1990s, in the wake of the 1997 electric utility deregulation bill. After the passage of a bill in 2007 allowing it to get back into power plant ownership, NorthWestern has been looking to build or buy its own plants.
The state Public Service Commission has voted to oppose HB491 in its present form, but Commissioner John Vincent, D-Gallatin Gateway, said the panel may reconsider if some technical changes are made.
Vincent said he hopes the Legislature takes a “good, hard look at (the bill)” as something that could help promote small wind power projects in Montana.
“The reality is that we are moving toward an alternative energy future,” he said. “It’s inevitable.”
Gov. Brian Schweitzer, a vocal booster of wind power, also is keeping tabs on the measure, and may suggest some changes after discussing it with the PSC, said spokeswoman Sarah Elliott.
“Governor Schweitzer has long been an advocate of wind energy small and large,” she said. “The fact is Montana has gone from producing 1 megawatt of wind energy in 2004 to 271 megawatts of wind energy today, and all but two are small scale developments.”
Still, even at 271 megawatts, Montana is well behind states like Wyoming, North Dakota, Colorado, Minnesota, Oregon and Washington.
“If we could put a project up right now, we would,” says Dogterum, the developer. “But NorthWestern isn’t talking to us.”