July 21, 2014
Montana

State committee to keep renewable energy requirement

LAURA LUNDQUIST, Chronicle Staff Writer | Bozeman Daily Chronicle | July 21, 2014 | www.bozemandailychronicle.com

The amount of renewable energy that utility companies are required to use will remain unchanged, partly because Montanans pay little to no added cost and it helps preserve clean air, according to a legislative report.

After spending months studying renewable-energy issues, the state interim committee on Energy and Telecommunications published a draft report highlighting the reasons behind its decision to keep Montana’s renewable portfolio standard at 15 percent.

“I don’t want to eliminate the RPS. I don’t see any need to increase it,” said Rep. Alan Olsen, R-Roundup. “It has had some positive impacts. I won’t deny that. What I have a hard time supporting are mandates.”

A renewable portfolio standard requires larger utility companies to get a percentage of their energy from renewable sources. Twenty-nine states have mandated RPSs, which vary from state to state, while another eight states have voluntary standards.

Montana’s standard went into effect in 2008 and required an incremental increase to 15 percent renewable sources by 2015.

Some members of the 2013 Legislature questioned continuing the standard and passed SJ-6, which led to the draft study.

On Friday, committee members debated wording and findings of the report, agreeing to disagree on certain points such as whether the standard has improved air quality.

As the debate drifted into the question of fossil fuels versus renewable sources, chairman Cliff Larsen, D-Missoula, reminded the committee that the report was only about the standard and not oil and gas.

“This is really the last chance we have before we finalize this report. Apart from our politics, is this the right message to respond to SJ-6?” Larsen said.

The report looks at the economic and environmental effects of the standard on Montana.

Economically, renewable energy projects have helped the counties where they’ve been built and the addition of renewable energy hasn’t cost ratepayers.

For example, the 90-turbine Judith Gap wind farm has added $28 million to state tax coffers and pays $55,000 a year for school-trust land permits.

While it was being built, it employed 120 workers, although wind farms provide fewer jobs once they’re in operation.

But some committee members argued that Judith Gap was built before the standard went into effect and now, with tougher Environmental Protection Agency regulations, utilities are turning to renewable energy without the need for a standard.

Even though utility companies always oppose RPS legislation, both NorthWestern Energy and Montana-Dakota Utilities said in a survey that the effect on customers has been neutral.

A 2012 nationwide study by the Lawrence Berkeley National Laboratory found that rate increases were no greater than 1 percent once the RPS goal was reached. The median increase was 38 cents per monthly bill.

All motions passed unanimously until Sen. Mary McNally, D-Billings, proposed that the primary environmental benefit was zero direct emission of air pollutants.

That statement ended up in the report but was opposed by three committee members.

The most contentious portion of the report, according to Larsen, dealt with a requirement that utilities use at least 50 megawatts generated by small renewable energy projects that are at least half-owned by Montanans. After 2015, the amount jumps to 75 megawatts.

But NorthWestern Energy has regularly applied for waivers because it says there aren’t enough qualified projects.

The Public Service Commission was proposing a bill to eliminate the requirement.

“It doesn’t seem to be working to promote what the Legislature intended,” said PSC chairman Bill Gallagher.

Jeff Fox of Renewable Northwest told the Chronicle that the PSC required that the project have half Montana ownership at inception.

“The utilities want big projects for the economy of scale, but it’s hard to get projects of that size going with local ownership,” Fox said. “Instead of looking at day one, allow half ownership to occur during the life of the project.”

The committee said it wouldn’t support a repeal bill and told Gallagher to return in September with recommendations for improvements to the requirement.

“This report shows that renewables have a place in the portfolio,” Larsen said.

The report will soon be available for public comment. The committee will make final decisions at its September meeting.