A bill being debated at the Legislature would strip a key provision in the state’s 2005 renewable energy law, which requires regulated utilities to make a portion of their state-mandated renewable energy purchases from small wind, hydro and biomass facilities.
Opponents of the new bill, including wind farm developers and environmental groups, said repealing the requirement would be a blow to small renewable projects, which they say benefit local communities.
“What concerns me here is that in 2005, legislative intent by this entire Legislature was to spread some energy generation around,” Ron Erickson, D-Missoula, said. “The hope was to help some rural areas.”
John Fitzpatrick of NorthWestern Energy said renewable energy from so-called “community renewable energy projects” is too expensive. Larger generators, he said, can produce renewable power less expensively, which translates to lower power bills for customers when utilities purchase the renewable power.
NorthWestern supports the requirement that utilities purchase so much renewable energy, Fitzpatrick added.
“But we do not buy into the theory that renewable should be required at any price,” he said.
The Legislature approved renewable energy standards for regulated utilities in 2005. Under those standards, utilities must procure a minimum of 15 percent of their electricity from renewable sources by 2015. The current minimum is 10 percent.
To comply with that rule, utilities must purchase at least 50 megawatts of renewable energy by 2012, and 75 megawatts by 2015, from facilities with a capacity of fewer than 25 megawatts – known as community renewable energy projects.
The newly proposed bill does not change the amount of renewable energy utilities are required to purchase, but would allow them to bypass small facilities to meet the requirement.
“I view this largely as a consumer protection bill,” said bill sponsor Rep. Mike Menahan, D-Helena.
Menahan said he strongly supports the 2005 renewable energy standard, but believes it should not make a difference from whom the green power is purchased.
“I think we want that to be met, but we want it to be delivered to us as cheaply as possible,” he said.
Kyla Wiens of the Montana Environmental Information Center spoke against the amendment, arguing that the 24-megawatt Big Otter Wind Farm planned near Belt and the 13-megawatt Turnbull hydroelectric facility near Fairfield would not have been constructed if the requirement to buy power from community projects did not exist.
NorthWestern Energy, the state’s largest utility, is purchasing electricity from those two projects.
“The projects just don’t provide energy, they provide jobs,” Wiens said. “They do pencil out.”
Members of the Senate Energy and Telecommunications Committee heard testimony Thursday. A vote could be taken next week. The bill already passed in the House.
NorthWestern’s Fitzpatrick said the utility sent out requests for proposals to meet the community renewable requirement last year, and had poor success attracting cost-effective projects. It considered 20 proposals, ranging from $54 per megawatt hour to $156 per megawatt hour, he said.
Mark Jacobson of wind developer Invenergy disputed the contention that small projects can’t produce affordable power.
“I would ask you to reconsider eliminating a requirement when there are plenty of projects out there that can meet it,” he said.
Invenergy owns the 135-megawatt Judith Gap Wind Farm. It also is building Big Otter, which it plans to turn over to NorthWestern once it is developed.
House Bill 237, combined with other bills affecting wind energy that are moving through the Legislature, could have a “chilling effect” on development in Montana, Jacobson said.
Sen. Mitch Tropila, D-Great Falls, said it would be a good idea to give the community project requirement a few more years to work before eliminating it.
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