Montana utility wants to pay less for solar power
HELENA – NorthWestern Energy wants out of its obligation to buy power from additional small, independent solar projects until state regulators reduce the rate and the length of the contracts.
Utility representatives told the Public Service Commission on June 9 the rate NorthWestern is obligated to pay the small projects is too high and hurts consumers, because the cost is passed on to them.
The Montana Consumer Counsel, which represents ratepayers, agrees with NorthWestern, the Billings Gazette reported.
The federal Public Utilities Regulatory Policies Act, which seeks to promote renewable energy, requires utilities to buy electricity from small suppliers at prices and terms set by state governments.
Montana’s solar rate is $66 per megawatt hour, which is similar to the price NorthWestern gets for its own hydroelectric power. NorthWestern proposes lowering the solar rate to $34 to put it more in line with market prices.
NorthWestern attorney John Alke said the utility has contracts or pending agreements with 44 solar projects. Since January, out-of-state developers have proposed 43 solar projects, NorthWestern said in May.
“Montana is currently very attractive to these developers because their profits are so much higher under the current rates set for NorthWestern,” said John Hines, NorthWestern’s vice president of supply. “Entering into these contracts at the current rate results in customers paying higher prices than they should for the energy – especially energy they don’t need in the first place.”
Jenny Harbine with Vote Solar said few of those applications will actually become solar farms. She also argued that suspending the federal act for NorthWestern violates the mandate and harms solar companies investing in Montana projects.
The Public Service Commission is likely to establish new price and contract terms within the next six months, Harbine argued, and said NorthWestern should have to use the current rates until then.
The commission is scheduled to meet Thursday to act on NorthWestern’s proposal.