A wind farm developer is suing the Montana Public Service Commission and NorthWestern Energy, alleging discriminatory pricing for small renewable energy developers, a charge they denied.
Martin Wilde developed two wind projects near Fairfield and sold the power to NorthWestern, and is planning additional wind farms as well.
The PSC regulates public utilities including rates.
Wilde argues in a civil lawsuit filed Tuesday in state district court in Great Falls that Montana’s renewable energy industry has come under attack from the PSC and NorthWestern.
In collaboration with NorthWestern, the lawsuit states, the Commission recently set rates for independent wind and solar developers at rates Wilde alleges were too low and discriminatory against renewable energy.
“The bottom line is there’s sort of a movement under way to stamp out renewables and it began with the election of Donald Trump,” Wilde said in an interview.
Butch Larcombe, a NorthWestern spokeman, said the claims have no merit.
“We’re not discriminating against renewables,” he said. “We have dozens of contracts with QF wind projects across Montana. As usual, our concern is how much we pay for electricity.”
The federal Public Utilities Regulatory ACT, or PURPA, was intended to reduce dependence on fossil fuels.
The lawsuit alleges provisions of the law aren’t being met, and also alleges constitutional violations.
PURPA established QFs, or small power production facilities producing electricity using wind, solar, water and other resources. Under the law, rates paid by a utility must equal so-called “avoided costs” of the utility.
Under federal law, NorthWestern is required to buy power from QFs “but at prices that don’t harm us,” Larcombe said.
“If we pay too much, our customers pay too much, too,” he said.
In Montana, there are close to 40 QFs with the collective capacity to produce on average about 160 megawatts of electricity annually, according to a study done for the Energy and Telecommunications Interim Committee.
When NorthWestern and the QFs disagree over the price of electricty, they can petition the PSC to set the rates.
“Defendants’ actions will stop development of renewable energy in Montana,” the lawsuit claims.
Besides prices, the lawsuit also takes issues with the length of contracts between NorthWestern and QFs, arguing they should be of longer duration to make the projects more viable.
The lawsuit says a conversation between a PSC commissioner and staff member that occurred during a break in proceedings at a June PSC meeting provides evidence for the claims.
Members were setting rates for QFs at the meeting.
In that conversation, a staff member says five-year contracts will “probably kill QF development.” A commissioner says, “Well, actually the 10-year might do it if the price doesn’t. And, honestly at this low price, um, I can’t imagine anyone gonna get into it.”
“Unfortunately for defendants, the microphone and video were still on, capturing an internal admission that the commission’s new discriminatory pricing and contract duration adjustments would ‘kill QF development entirely,” the lawsuit states.
At an Oct. 5 work session, commission members discussed allowing QF contracts up to 15 years, but the lawsuit says that doesn’t fix past damage or “broader, ongoing unlawful discriminatory treatment against renewables.”
PSC spokesman Chris Puyear said PSC attorneys were reviewing the complaint.
“The PSC is endeavored to make a decision (based) on applicable federal and state law and the record in the given proceedings,” he said of QF cases.
The lawsuit also alleges that prices approved for QF facilities before the presidential election were higher compared to prices approved for projects after the election.
“Remarkably, using the arbitrary reasoning of the election result and campaign statements made by then-candidate Donald Trump, the Commission justified reducing the payment for renewable energy by $7.69 per megawatt hour in less than a one-week period, without any evidence or testimony about why this decision was made,” the lawsuit says.
Under the commission’s “post-election methodologies and policies,” rates paid to QFs, including the plaintiffs, are less than one-third of the rates that the PSC awarded NorthWestern for its own generation assets, the lawsuit contends.
It asks for no less than $4.8 million in damages for what it says are discriminatory rates set by the PSC since the 2016 presidential election.
Wilde said he hopes the lawsuit highlights a broader issue and that the court will “slow down this problem.”
The actions, the lawsuit says, violate the Equal Protection Clause of the Fourteenth Amendment.
Wilde also is claiming that a state law giving NorthWestern alone the benefit of pre-approval of its electricity supply resources is unconstitutional because it discriminates against QFs.
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