Federal, state and local policies shape Montana’s renewable energy industry with laws that dictate everything from energy tax credits, to limits on net metering, to solar permitting. Our policy makers need to hear from you, whether you’re a renewable energy installer, consumer or supporter. Only with your voice and your participation in policy decisions will we get the policies in place to allow for the expansion of renewable energy in Montana.
Understanding the Public Service Commission: Part 1
February 28, 2018
As of March 1, 2018, NorthWestern Energy has one month to submit its distributed generation (i.e. rooftop solar) cost-benefit analysis to Montana’s Public Service Commission (PSC). The analysis is the latest in an ongoing debate over net metering policy that most recently resulted in House Bill 219. HB 219 passed in the 2017 Legislature and mandated NorthWestern Energy to study the costs and benefits of distributed generation customers. Throughout this process, a number of questions have come up: why is the utility overseeing the study and not the PSC? What happens once the study is finished? How will this affect Montanan’s ability to go solar?
Many of these questions circle back to the importance of understanding the Public Service Commission and its role.
Many Montanans do not realize the scope of influence the PSC has on renewable energy development in Montana, nor the opportunities they have to engage with the Commission. In this series, we will help you understand this important decision making body, what it does, and give concrete examples of how it operates using the distributed generation cost-benefit analysis as the basis for the discussion.
Where did the Public Service Commission come from?
The Montana Public Service Commission (PSC) dates back to 1907, when the Montana Legislature established a three-person Board of Railroad Commissioners, which was responsible for regulating the rail and transport industry in Montana. Similar to today’s PSC, their charge was to ensure safe and dependable utility services (at this time rails) at reasonable costs. In 1913, these three Commissioners became ex-officio members of the newly established Montana Public Service Commission. It’s been suggested that the PSC was created out of a desire for a body that had more resources and expertise than the Legislature to oversee and regulate the railroad and other utilities. Over the years, more and more regulatory responsibility was added to the PSC. This included overhead electricity development (e.g. power lines; 1917) and common carrier pipelines for transporting petroleum products (1921).
In 1971, an organizational restructuring of the executive branch resulted in the elimination of the Board of Railroad Commissioners. In 1974, the Legislature changed the structure of the PSC to its current form. What is that structure?
Who and Where is this Public Service Commission?
When many people refer to the Public Service Commission, they are often referring to the Commissioners themselves. The PSC has five commissioners representing separate districts around the state.Commissioners are elected officials, who are elected to four-year staggered terms. They can serve a maximum of two consecutive terms, and can serve no more than eight years in any 16-year period. They have a Chair, whom they elect from among themselves every other year at the first meeting of the year following a general election. Commissioner elections are also partisan, meaning candidates may choose a political party affiliation. There are no requirements for relevant professional experience or educational background in order to become a Commissioner. By contrast, some states require the commissioners to have experience or education in fields such as public or government administration, economics, utility regulation, consumer advocacy, engineering, law, etc. In many states, commissioners are appointed to their position by the governor. Montana is one of 11 states that elects their commissioners.
It is important to note the Public Service Commission is more than just the five commissioners themselves. The PSC includes support staff such as attorneys, economists, rate analysts, and more that advise the Commissioners and help them dissect and understand the complex issues they work on. The staff is organized into three divisions: regulatory, legal, and centralized services.
If the PSC is a regulatory body, who is regulating the PSC?
The PSC was created in the early 1900’s as a separate entity from the Legislature. The Legislature oversees the PSC. The relationship between the Legislature and the PSC is important to understanding key energy issues currently affecting Montana. The Legislature is the branch of government principally charged with creating policy. The PSC’s duty is to execute those policies, specifically the ones relating to supervising and regulating public utilities, motor carriers, and telecommunications companies. In essence, the Legislature’s role is to provide the framework under which the PSC executes its duties.
The PSC most often works with the Legislature’s energy committees. During the interim between legislative sessions, this is the Energy and Telecommunications Interim Committee (ETIC) – a bipartisan committee made up of four State Representatives and four State Senators. Upon request, the PSC will make presentations to the ETIC on relevant issues the Committee is researching and discussing.
Why does the PSC regulate utilities, but not the electric co-ops?
There are two types of electricity providers in Montana: investor-owned utilities (IOU’s) and rural electric cooperative (REC’s, or “co-ops”). When referring to “utilities”, we are most often referring to IOU’s. Residential and small commercial customers in Montana do not get to choose who provides their electricity. Their electricity provider is determined by where they live or operate, with the IOU’s providing electricity to most of the urban areas and the co-ops providing electricity to the rural areas. Importantly, this setup guarantees a monopoly on electricity service in geographical areas throughout the state.
The IOU business model is profit-based – like any other investor-owned business – and so without regulation there exists the opportunity for this guaranteed-monopoly company to charge as much for services as it likes. This is where the PSC regulation comes in. The PSC’s duty is to ensure just and reasonable rates for utility customers, while still guaranteeing reasonable profits for the IOU. Through various functions that we will describe in the next part of this series, the PSC is ultimately the one that determines the profit margins for the utility. Thus, this regulatory system seeks to protect customers (through oversight of the monopoly business) while still incentivizing the utility to provide good service (through profit returns).
The co-ops, on the other hand, are not investor-owned; they are member-owned. This is more akin to a non-profit model, and removes the potential for over-charging customers to generate larger profits. This negates the need for regulation as with the IOU’s.
This difference in regulation will be important when we begin discussing why the PSC is overseeing the distributed generation study, and why an IOU is conducting it.
Now, on to the distributed generation cost-benefit analysis
This was the 10,000-foot view of some key foundational elements of the PSC and how it operates. Next, we’ll get into the specifics of its role in regulating IOU’s, and the various forms of renewable energy development in Montana it can impact. Specifically, we’ll get into distributed generation, net metering, and review the cost-benefit analysis. Stay tuned!
The purpose of this series is to help inform the public about the purpose and function of the Montana Public Service Commission. MREA does not and is not endorsing any individual candidate(s) running for election.
What do these solar tariffs mean?
January 30, 2018
Last week the President ordered 30% tariffs on imported solar cells and modules. These tariffs are nothing short of artificial price increases, leaving many in Montana to wonder how this will affect their ability to purchase solar. This will be a surmountable, albeit frustrating, speed bump on the road towards energy independence.
The decision, touted as a way to bolster american manufacturing and create jobs, is projected instead to cost the american solar industry 23,000 jobs. Most of these will be in installation, which makes up the majority of the solar industry. In Montana, installation makes up approximately 80% of the solar industry. These are small businesses, hiring a local workforce, and providing well paying jobs. Already, the uncertainty over the tariffs has caused businesses to curtail expansion.
The tariffs are the latest in a string of political speed bumps the solar industry continues to find ways to overcome. From outdated state net metering policies, to constant attacks on renewable energy tax incentives and financing programs, Montana’s solar industry has continued to grow despite a political landscape full of uncertainty.
Yes, the tariffs will increase the price tag of a panel. But thanks to technology advances, the price of solar continues to drop – more than 70% from 8 years ago. What’s more, communities around Montana continue working to lower the “soft costs” associated with installations by removing red tape and streamlining administrative tasks like permitting fees, zoning requirements, and inspections. And most importantly, the members of the industry themselves continue to find innovative ways to install solar that meets the needs of their customers at competitive prices.
Tariffs or no, Montana’s solar industry is here to stay.
Many are expecting the decision to be appealed and challenged at the World Trade Organization, with countries like South Korea, China and others challenging the legality of the decision in regards to international trade agreements. The timeline of those challenges are unclear. They make take up to two years to complete, at which time the effect of the tariffs may have started to dwindle.
Read the industry’s response to this important issue:
Trump’s tariff on imported solar cells could hurt Montana’s solar industry, group says (January 23, Missoula Current)
Montana’s solar industry powers on despite Trump tariffs (January 28, Billings Gazette)
Trump’s tariff on solar is puzzling (January 28, Ravalli Republic)
Solar Tariffs threaten Montana’s Solar Industry
November 30, 2017
In May, two foreign-owned U.S. solar manufacturers (Suniva and SolarWorld) filed a “Section 201” request with the U.S. International Trade Commission (USITC) to place tariffs on imported solar cells and modules. The petition claimed that imported solar cells and modules were harming the domestic manufacturing industry. The USITC took up the petition and began looking into whether or not these imported cells and modules were indeed doing harm. On September 22nd, the USITC ruled that an increased volume of solar imports did injure domestic solar manufacturing. This is significant because a confirmation of injury to the market requires the USITC to then make remedy recommendations to the President who will decide what, if any, remedies to enact.
The original tariffs requested by the domestic manufacturers could double the cost of imported panels, which are widely used. Although the petition focuses mostly on manufacturers, it is installers who may feel the largest impacts from these artificial price increases. Montana’s solar industry is mostly comprised of installers (more than 80%), many of whom are small businesses. These prices increases will make installations more costly, driving down demand and reducing investment in these systems. This would set Montana’s industry back years, undoing the progress the industry has made. Nationally, opponents to the tariffs are saying approx. 88,000 jobs in the solar industry could be lost due to the tariffs.
MREA engaged with State Legislators and with our Congressional Delegates to address this issue. In October, the Energy and Telecommunications Interim Committee voted 6-2 to send a letter to Montana’s Congressional Delegation requesting they engage the ITC and President, asking them to ensure a solution that does no harm to the small businesses that make up Montana’s solar industry. We are thrilled at the Committee’s decision, and their bipartisan show of support for Montana’s solar industry.
In late October, the USITC made their recommendations to the President, with a variety of options being presented. One of the options, presented by Commissioner Broadbent, closely reflects those suggested by the Solar Energy Industries Association (SEIA), a leading voice in opposition to the petition. Other recommendations are percentage based tariffs, while still others are tariffs based on a raw dollar amounts. Importantly, none of the remedies significantly align with those requested by the petitioners, which SEIA and others argued were extraneous.
Mostly recently, National Association of Regulatory Utility Commissioners (NARUC), the body that represents State Public Service Commissioners in charge of regulating utilities across the country, formally adopted a resolution urging the U.S. Trade Representative (“USTR”) to carefully consider the harm that American consumers would face from proposed trade remedies, including tariffs.
Once recommendations are made, the President has 60 days (until January 12th, 2018) to make a ruling. In cases like these, the President has a large amount of latitude on the decision. The President may accept one of the recommendations made by the USITC, one of the original recommendations from the petition, or a completely new set of remedies.
MREA continues to work with our State and Federal representatives on this critical issue. For more background information on the issue, and to learn more about SEIA’s efforts in D.C., visit the SEIA website.
Sep. 22, UtilityDive – ITC finds injury to US solar manufacturers, sending tariff decision to Trump
Sep. 26, High Country News – Trump considers tariffs on solar industry
Oct. 26, MT Public Radio – Montana Lawmakers Express Concern Over Solar Panel Tariffs
Oct. 31, GreenTech Media – ITC Issues Recommended Remedies in Section 201 Solar Trade Case
Nov. 15, SEIA – NARUC Approves Resolution Urging USTR to Carefully Weigh the Harmful Results of Trade Remedies
Nov. 30, UtilityDive – US Trade Rep pushes for another ITC report ahead of solar trade case hearing
Legislature Special Session: Loan Program Funds Transfered, State Incentives Survive
November 30, 2017
On November 13th, the Montana Legislature opened a Special Session called by Gov. Bullock in order to address Montana’s budget crisis. MREA staff was present in Helena, working to protect renewable energy policies during the fast moving session. During the 4-day session, which adjourned on November 16th, MREA tracked two bills that had implications for renewable energy development: House Bill 7 and House Bill 6.
During a Special Session, bills can move quickly – often times so quickly that their full implications may not be completely understood. This was a huge concern with House Bill 7 (Rep. Alan Redfield). HB7 would have frozen numerous income tax credits that benefit Montanans across the state, including alternative energy credits. The alternative energy credits are used by thousands of Montanans to help support their investment in local, on-site renewable energy systems. This investment bolsters Montana’s growing renewable energy industry, and is helping move renewable energy development forward. During the hearing on this bill, the sponsor admitted he was unaware of the true impacts this bill would have on the budget crisis. It seemed that the inclusion of the renewable energy incentives was not a budgetary fix, but yet another attack on clean energy policy. HB7 bill passed out of the House Taxation Committee, but was never introduced on the House floor and died when the special session ended. A similar bill attacking these tax credits, specifically, was introduced during the regular session this past winter and was vetoed by the Governor.
House Bill 6 (Rep. Nancy Ballance) is a “transfer bill”, designed to move funds from existing State accounts and budgets into the general fund to help makeup for the shortfall. Included in the numerous transfers is $1.2 million from the Alternative Energy Revolving Loan Fund. The Alternative Energy Revolving Loan Program is administered by the Montana Energy Bureau at the Montana Dept. of Environmental Quality. Funds are used to provide low-interest loans for alternative energy projects around the state. HB6 was, along with a couple others bills, passed to the Governor’s desk and was allowed to become law without his signature. Reportedly, the three bills not signed (including HB6) have been described as being interconnected, thus making impossible for the governor to reject any part of the plan without further cuts.
According to a statement from the Energy Bureau,
“DEQ will continue to accept loan applications on a rolling basis. The legislatively-mandated reduction may necessitate the implementation of a ranking system to prioritize loans for funding if we expect qualified applications to exceed available funds. At this time, program staff are analyzing the impact of the fund transfer to the loan program, developing ranking criteria, and a potential schedule for application review.
The transfer will limit DEQ’s ability to fully utilize the program to serve homeowners and small businesses across Montana and will likely result in a lower number of funded loans than in previous fiscal years. Because a loanable balance for programs like this is built over time, this large one-time transfer is not just impactful for the transfer year, but likely to be felt for an extended period.”
The Energy Bureau will be posting additional information to the program website when it is available. MREA has been in contact with Energy Bureau staff and will continue to provide updates as we learn more.
Net metering study moving forward; ETIC establishes focus areas
August 31, 2017
Net Metering Cost-Benefit Analysis Update
As a reminder: House Bill 219, passed by the 2017 Legislature and signed by Governor Bullock, directs the Montana Public Service Commission to oversee a cost-benefit analysis conducted by NorthWestern Energy of customer-generators (i.e. utility customers who use grid-tied, net-metered systems). HB219 gives the PSC the ability to set minimum information requirements for the cost-benefit study. For more, read our June 28 Policy Blog post below.
In June, the PSC released draft minimum information requirements for the study, and put them out for public comment. MREA joined a number of other renewable energy advocates in responding to the comments (view the comments here). Overall, the suggested list of benefits and costs was comprehensive, and we provided detailed feedback on each category for the PSC’s consideration. In addition, we made a point to address the importance of respecting an individual’s right to produce their own energy. Net metering specifically addresses energy exports to the grid, and we encouraged the PSC to be wary of reaching ‘behind the meter’ and infringing on an individual’s right to produce and consume energy on-site.
The PSC conducted a robust and transparent information gathering process. On August 9th, they issued a Notice of Commission Action finalizing the minimum benefit and cost categories to be included in the study, with descriptions of each. The PSC agreed with MREA and our colleagues in almost every comment we made.
However, we continue to have some major concerns. The first, is that the utility was given an opportunity to include additional cost categories, potentially biasing the study. In its Notice of Commission Action, the PSC did not discourage the utility from adding cost categories. While the PSC itself denied NWE’s request to include these categories in its list of minimum requirements, it allowed NWE to “include those cost categories if it chooses.”
The second, is that the study now disappears into the utilities hands, with limited ongoing transparency. The PSC directed the utility to use its Energy and Technical Advisory Committee (ETAC) for further guidance on important aspects of the study. However, ETAC meetings are closed to the public and participation is by invite only, with participants chosen by NWE itself. This locks out some potential key stakeholders, such as MREA, which has a large vested interest in the issues being discussed.
The goal of this study is to move the conversation on net-metering forward, beyond the stalemate that is hampering solar-industry growth in Montana. A robust, transparent process is the only method for doing so. We remain concerned that the current process could potentially undermine that goal, casting doubt on the study outcome and adding to the tension between the renewable energy industry and the utility.
MREA will continue to monitor this process as it moves forward. MREA will be working with the PSC and members of the Energy and Telecommunications Interim Committee (ETIC) to discuss solutions to our concerns. We need your support as we continue working on these keys issues. We will be announcing opportunities to get involved once we know more.
Energy and Telecommunications Interim Committee Update
MREA attended the 2017-2018 Energy and Telecommunications Interim Committee’s first meeting on July 31, 2017. The Committee addressed a number of administrative items, including electing a Chair and Vice-Chair, and establishing a work plan for the next 18-months. The Committee usually selects a small number of key issues to study, while leaving time for other important duties they are tasked with. Membership is always balanced by party and house. The 2017 ETIC members are as follows:
Sen. Mary McNally (D – Billings) – Chair
Rep. Derek Skees (R – Kalispell) – Vice Chair
Rep. Laurie Bishop (D – Livingston)
Rep. Zac Perry (D – Hungry Horse)
Rep. Daniel Zolnikov (R – Billings)
Sen. Tom Richmond (R – Billings)
Sen. Scott Sales (R – Bozeman)
Sen. Cynthia Wolken (D – Missoula)
The Committee has three main studies it will be focusing on: utility decoupling, renewable energy credits, and natural gas utility customer choice (i.e. natural gas deregulation). These studies will be taking up the bulk of the Committee’s time and the staff’s time during the interim. Importantly, the Committee also allocated time to oversee the PSC’s review of Net Metering (in other words, the cost-benefit analysis process initiated by HB219). While MREA will be monitoring ETIC’s work on their main studies, our primary focus will continue to be the HB219 cost-benefit analysis of net metering. We were encouraged to see ETIC take an interest in the that analysis.
You can view and download the minutes, agenda, and documents on the Montana Legislature webpage.
As we mentioned above, MREA intends to work with members of ETIC to discuss solutions to the concerns we have about the study and the direction its taking. We will be announcing opportunities to get involved as we know more. Thank you for all you do to support renewable energy in Montana!
Want to hear more about the policy landscape in Montana? Be sure to attend our “Renewable Energy Policy” workshop at the Montana Clean Energy Fair, Sept. 16th in Helena.
Net Metering Cost-Benefit Analysis Process Underway
June 28, 2017
House Bill 219, passed by the 2017 Legislature and signed by Governor Bullock, directs the Montana Public Service Commission to oversee a cost-benefit analysis conducted by NorthWestern Energy of customer-generators (i.e. utility customers who use grid-tied, net-metered systems). This analysis could have significant impacts for net metering customers and renewable energy installers in Montana.
House Bill 219 requires NorthWestern Energy (NWE) conduct a study on the costs and benefits of customer-generators (i.e. net metered customers) before April 1, 2018. NWE is required to submit this study to the Public Service Commission (PSC) who will then review the study and make findings, including as to whether or not to create a separate rate-payer class for customer-generators. As part of HB219, the PSC has the authority to set minimum information requirements for the analysis. In other words, they can set requirements for which benefits and costs must be addressed by NWE.
This analysis may have significant impacts on net metering in Montana. It has the potential to affect the value of net metering credits and how net metered customers pay their energy bills. As such, it could affect the financial viability of investing in renewable energy systems. This, in turn, will impact the ability of renewable energy installers to do their job.
The potential danger is a biased analysis. In the Legislature, NWE firmly and repeatedly established its opinion on the costs and benefits of distributed-generators. It is critical that the analysis fairly represent the benefits, as well as the costs, of distributed-generators. Our goal is to ensure an open and transparent process, in which all of those impacted by this study have an opportunity to provide input and understand the data and its impacts.
It is our hope, and one that we feel is shared among those on both sides of this discussion, that this study will end the debate over “cost-shifting” (the allegation that customer-generators unfairly pass costs to non-net metered customers). We see ending this debate as an important way for MREA to be able to fulfill our mission of expanding the use of renewable energy in Montana. HB219 was cited by multiple legislators as reason to wait on proactive legislation, even bi-partisan bills like HB504, which would have updated and expanded Montana’s net metering policies. We look forward to the opportunity to remove this roadblock that will allow Montana to take down the barriers restricting our renewable energy industry from moving forward.
Next Steps and how you can be involved
The PSC has chosen and hired a consultant to assist staff in putting together the minimum information requirements. A draft of these requirements has been put together, and the PSC has opened a public comment period. You can read the notice of opportunity to comment here. Public comments must be made by July 7, 2017
MREA staff are preparing more technical and detailed comments on the minimum information requirements which we will be submitting ahead of the July 7th deadline.
Support our efforts by asking the PSC to ensure NorthWestern Energy provides an open, transparent process and that the benefits, as well as the costs, of net metering are fairly represented in this study.
To submit public comments:
Public comments may be mailed or hand delivered to the Commission at 1701 Prospect Avenue, Helena, MT, 59620, or sent by email to firstname.lastname@example.org. You may download and use the optional comment form at http://psc.mt.gov (go to “Comment on Proceedings”). A copy of HB 219 is available for inspection at the Commission’s business offices and also on the Montana Legislature’s website.
April 28, 2017 (updated May 9, 2017)
The 65th Legislature has adjourned, and we at MREA are left with a feeling of both relief and frustration. Over the past 4-months, MREA staff worked with board members, colleagues, and our individual and business members to oppose attacks on net metering, the alternative energy loan program, and more. At the same time, we worked to advance legislation that would have created jobs and supported energy independence. We owe a large thank you to everyone who dedicated their time to come to Helena to testify this session, submitted comments online, and made phone calls to Legislators. Thank you for making your voice heard!
While we are grateful that many of those bad bills never reached the Governor’s desk, we are discouraged that good bills, like the Solar Jobs and Energy Freedom Act, never made it out of Committee.
Success took a different shape than we had hoped. Much of our work was spent defending against bad bills like SB1, SB7, SB78, and SB154, to name a few. We were happy to work with Legislators and coalition partners to prevent most of these bills from reaching the Governor’s desk. We are very grateful that Governor Bullock took a strong stance on protecting Montana’s renewable energy industry by vetoing those that did make it to his desk, including Senate Bill 7 and Senate Bill 154.
One piece of net metering legislation that did pass is HB219. MREA initially supported this bill, stressing the importance of grandfathering net metering customers under any future changes to the credit rate for energy they provide to the grid. HB219 ensures that current net metering customers are grandfathered for the life of their systems, an important promise to keep. However, the bill then took an unfortunate turn, with an amendment that moved the deadline for a net metering cost-benefit study from 1% of NorthWestern’s sales to a firm date of April 1, 2018. Setting a percentage trigger is how most states and grid experts have approached the question of when to evaluate net metering. In fact, 1% would have been at the low end of the percentage grid experts recommend. Instead, the bill passed with the April 2018 amendment included. While this is not the outcome we had hoped for, we look forward to working with the Public Service Commission and the utility to ensure the study is conducted in a valid and trustworthy manner.
Finally, we were disappointed by the tabling of House Bill 504, the “Solar Jobs and Energy Freedom Act.” We worked hard to recruit bipartisan co-sponsors for this proactive legislation. Despite the support of dozens of citizens testifying, hundreds attending a rally in the capitol, and thousands submitting comments, this bill died on a tie vote in the House Energy Committee. Other proactive bills such as HB34 (a modest net-metering system size cap increase for government entities) met a similar fate in committee.
Although the session is over, there is plenty of work to do. We will continue to engage key decision makers as they shape Montana’s energy future, focusing in the short term on the HB219-mandated cost-benefit analysis of net metering. We will continue to involve our staff, board, and members to ensure Montana’s future is a bright one powered by the sun, the wind, and the earth.
Summary of MREA’s legislative priorities from this session
Senate Bill 1: Requires additional metering and inverter technology for NEM customers, effective immediately.
Position: Oppose. This would have increased costs for net metered systems immediately and across the board.
Result: Tabled in Senate Energy Committee.
Senate Bill 7: Puts in statute that non-net metered customers may not “subsidize” net-metered customers.
Position: Oppose. This bill is vague in its implications and discriminatory against net metered customers, pitting utility customers against each other.
Result: Vetoed by the Governor.
Senate Bill 11: Requires the PSC conduct a biennial review of NEM system technology requirements, ensuring the PSC is monitoring utility implementation of interconnection requirements. Places the responsibility to review this technology solely in the hands of the PSC.
Position: Support. A biennial review avoids out-of-date standards, and a situation in which significant updates could shock the industry.
Result: As of 4/28 on its way to the Governor
Senate Bill 12: Gives the PSC the authority to require alternative/advanced metering technology for net metered systems.
Position: Support, suggesting changes: that the bill apply to all utility customers. Alternative/advanced metering could help lead to advances in smart grid deployment and better integration of Distributed Energy Resources to the grid, but this technology should apply to all utility customers.
Result: Tabled in House Energy Committee.
Senate Bill 78: Creates a new, separate rate class for net metering utility customers and reduce the credit rate for net metering customers to an “avoided cost” rate.
Position: Oppose. This bill would change the credit rate without any data to justify the change. The change would be significant enough to shock and drastically harm the renewable energy industry in Montana.
Result: Tabled in House Energy Committee.
Senate Bill 154: Removes several tax incentives for net metering systems, making it impossible to receive the alternative energy production credit and the alternative energy system credit.
Position: Oppose. These tax credits have been used by thousands of Montanans to help invest in these technologies.This bill is hardly a fix for the state’s budgetary woes, but much more clearly an attack on net metering and the renewable energy industry.
Result: Vetoed by the Governor.
Senate Bill 201: Allows for aggregate net metering.
Position: Support. Aggregate net metering is an administrative change that would allow systems, especially in rural areas, to be designed based on optimal site conditions and not on which meter has the largest load.
Result: Tabled in Committee, after which the Sponsor successfully “blasted” the bill onto the Senate Floor, where it narrowly failed (24-25).
House Bill 34: Increases the 50kW cap for net metered system to 250kW for government entities (including schools and universities, city and county governments, as well as federal and tribal governments).
Position: Support. This bill was a compromise bill from the Energy and Telecommunications Interim Committee that would have made an incremental but important update to Montana’s net metering cap.
Result: Tabled in House Energy Committee.
House Bill 52: “Grandfathers” kilowatt-hour credit rates for net metering customers under any future changes to the credit rate.
Position: Support. Grandfathering credit rates is key to ensuring that Montanans investing in these systems have the confidence that their investment will be protected over time.
Result: Tabled in the House Energy Committee.
House Bill 219: Grandfathers kilowatt-hour credit rates for net metering customers under any future changes to the credit rate; triggers a public utility to conduct a cost-benefit analysis of net metering to be completed by April 1, 2018. The analysis will be overseen by the PSC, but conducted by the utility or its consultants.
Position: Oppose, suggesting changes: that the study be triggered when net metering deployment reaches 1% of a utility’s total electrical sales. The 1% trigger allows the industry to grow while sufficient data is collected to ensure a valid study.
Result: Signed into law by the Governor.
House Bill 504: (“Solar Jobs and Energy Freedom Act”) Increases the net metering cap to 1MW for all net metering customers; allow for aggregate net metering; allow for community net metering; provide excess credits that are normally forfeited to the utility to be used for low-income bill assistance.
Position: Support. This bill would have significantly advanced renewable energy and net metering policy in Montana.
Result: Tabled in House Energy Committee.
Legislative Half-time Report: Net metering
March 1, 2017
The past 8 weeks have been spent working hard to defend and promote net metering policy here in Montana. A huge thank you to all the MREA members and many others who called, sent emails, came to Helena to testify, and attended a thrilling rally. Even with all of this overwhelming support for positive action, it is clear the influences working against net metering continue to prove themselves too challenging to overcome.
However, there is still important work to be done in the remaining months of the session. The bills that we brought forward to expand net metering have all died. Still, please reach out to your Senators and Representatives who voted to support those bills and thank them for their vote. It is important for them to know that we support them and their vote, and that we appreciate their hard work on these issues.
This week the session is in recess for Transmittal Break, but will begin the second half on Monday. We look forward to continuing to work with our members and partners to protect net metering in the coming weeks. Please continue to check back in on this page and through our e-Newsletter Action Alerts to stay up to speed on our work at the Capitol.
Senate Bill 78 – creates a new, separate rate class for net metering utility customers and reduces the credit rate for net metering customers to an “avoided cost” rate. This bill is one of many attacking net metering kilowatt-hour credit rates, and oversteps the legislature’s bounds in determining a methodology for setting rates. The PSC is the authority that should be determining which methodologies to use to determine rates, and what those rates should be. There was resounding opposition to this bill in the Senate Energy Committee from over a dozen individuals, including from MREA members and installers. Unfortunately, the bill passed out of that committee on a party line vote 8-5. The bill then went on to pass the Senate 30-19. This bill will be heard in front of the House Federal Relations, Energy, and Telecommunications Committee this coming Wednesday, March 8th. If you are interested and available to testify, please email me to let me know. If you cannot make it, please contact the committee and strongly urge them to oppose this bill.
Senate Bill 7 – uses cost shifting, which is inherent in the utility grid system, to discriminate against net metered customers. This bill prematurely changes statute to take a position on the issue of cost-shifting. It implies the existence of significant cost-shifts without clarity on the issue. Together, this will only harm private investment in these technologies and small businesses in Montana. Once again, there was resounding opposition to this bill in the Senate Energy Committee. Unfortunately, even in light of heavy opposition during it’s hearing in both the Senate and the House Energy Committees, this bill is still moving forward. This bill is pending executive action by the House Federal Relations, Energy, and Telecommunications Committee. Please contact the committee members and strongly urge them to oppose this bill. If it passes, it will head to the House and then, potentially, on to the Governor’s desk. Please contact the House Energy Committee and strongly urge them to oppose this bill.
Senate Bill 154 – This bill removes several tax incentives for net metering systems, making it impossible to receive the alternative energy production credit, alternative energy system credit, or apply for the alternative energy revolving loan program. Removing these incentives will make it more difficult to invest in these technologies, shaking investor confidence and ultimately damaging the ability for businesses in this industry to grow. This bill saw strong opposition and very limited support, which did not include NorthWestern Energy. Still, this bill passed the Senate Energy Committee on an 8-5 party line vote. We are waiting for a vote to be schedule on the Senate Floor. Please contact your Senators and urge them to oppose this bill.
House Bill 219 – has two important pieces: a grandfathering clause that protects kilowatt-hour credit rates for net metering customers under any future changes, and a trigger for a public utility to conduct a cost-benefit analysis of net metering when net metering systems reaches 1% of a public utility’s total electric sales. MREA originally support this bill, suggesting the bill require the PSC conduct the study. This bill passed out of the House with amendments that struck the 1% trigger and instead requires the cost-benefit analysis be completed by the public utility by April 1, 2018. The 1% trigger is an important milestone for conducting this study, ensuring the industry is allowed to grow while the utilities collect the necessary data to conduct a thorough cost-benefit analysis. Because of this, MREA is opposing this bill and suggesting the original 1% language be re-inserted. This bill has passed out of Committee with the amendments noted above, passed the House, and has been transmitted to the Senate. We are waiting for a hearing to be scheduled with the Senate Energy Committee.
House Bill 34 – would have increased the arbitrary and outdated 50kW cap for net metered system to 250kW for government entities (including schools and universities, city and county governments, as well as federal and tribal governments). This bill was heard very early in the session and marked the beginning of the heavily contested net-metering debate between renewable energy advocates and the utility. Even with resounding support of this bill, it was tabled in committee.
House Bill 52 – grandfathering net metering customers under any future rate changes. This bill had unanimous support, including from the utilities. This bill was ultimately tabled once House Bill 219 was originally brought forward, due to the overlap.
House Bill 504 – would have: increased the net metering cap to 1MW for all net metering customers; allowed for aggregate net metering; allowed for community net metering; provided excess credits that are normally forfeited to the utility to be used for low-income bill assistance. This bill had a heavily contested hearing, with a large number of supporters (including numerous MREA members). The following day, hundreds of Montanans attended the Solar Jobs, calling for support of this bill. Unfortunately, the bill tied on an 8-8 vote in the House Energy Committee and was ultimately tabled.
Senate Bill 1 – would have required additional metering and inverter technology, increasing costs for net metered systems immediately and across the board. MREA and several members testified in opposition of this bill, explaining the negative impacts it would have on renewable energy investments. This bill was tabled in committee.
Net metering study wraps-up with two important wins
September 30, 2016
At the culmination of a 15-month study of net metering, the Montana Legislature’s Energy & Telecommunications Interim Committee (ETIC) advanced two MREA priorities that will protect and expand rooftop solar. Both bills passed with bipartisan support and will be sent to the full Legislature for consideration in January 2017.
ETIC’s study of net metering policies and economic impacts was initiated by the 2015 Legislature after a series of bills to expand net metering, and one bill to significantly roll back the statute, were either withdrawn or died in committee votes. The study touched on a range of topics including methodologies to weigh the costs and benefits of net metering, economic impacts of the solar industry in Montana, and interconnection and safety standards.
The bipartisan committee reached a series of conclusions about issues related to net metering, including the following Findings and Recommendations.
- The current incentives for renewable energy systems (tax credits, USB, etc.) are “adequate, and changes to existing incentive programs…are not needed.”
- “State net metering laws should not be extended to include rural electric cooperatives.” ETIC left unresolved the question of whether the statute, which only applies to NorthWestern Energy, should be extended to apply to the only other investor-owned utility in the state, Montana-Dakota Utilities (MDU).
- The committee studied some of the underlying barriers to adoption of more customer-owned generation and resolved that, “(d)ecoupling Montana’s utilities from the requirement to sell more electrons to generate profits is an important first step to moving to a modernized interstate grid that values energy efficiency and a diverse portfolio of distributed energy resources.”
The full list of study findings and recommendations, as well as background research on many aspects of net metering can be accessed here.
ETIC forwarded five draft bills related to net metering to the full Legislature, including two MREA priorities (LCNET4 and LCNET5). The full text of the bills will be posted at this link in the coming weeks.
LCNET1 would require the Montana Public Service Commission (PSC) to review and update, if necessary, safety and interconnection standards for net metering systems every two years. The current rules for both NorthWestern and MDU are badly out of date and have gone largely ignored for more than six years. NorthWestern is in the midst of updating their interconnection agreements and procedures, and opposed the bill, suggesting a PSC-based process for reviewing and correcting out-of-date standards instead. MREA supported the bill concept, while remaining open to the option of PSC-based alternative. The bill passed ETIC on a vote of 8-0.
LCNET2 would remove the homeowner electric permit exemption for electrical work done by a homeowner on his or her own grid-tied generator. MREA took a neutral position on this bill at the September 8-9 ETIC meeting. The bill passed 8-0 with the support of NorthWestern and the IBEW.
LCNET3 directs the PSC to consider whether “alternative metering technology” should be required for net metering systems. The Commission already has the authority to consider alternatives to the standard bi-directional net meter; this bill simply directs that process to begin. MREA supported the bill, but urged several changes, including that the bill apply to metering technology for all customers, not just net metering systems, and that the bill require the PSC to take into account privacy considerations for customer generators when weighing alternative metering technology. The bill passed 8-0 without the changes requested by MREA.
LCNET4 would grandfather existing net metering customers under any future change to the net metering rate structure, providing the solar industry and consumers an important assurance that their investment will be protected. The Nevada public utility commission recently applied a drastic rollback of net metering to existing solar customers, bringing into sharp focus the danger solar consumers face without a grandfathering clause in law. The original version of this bill would have also triggered a review of net metering costs and benefits when production from net metering systems reached an estimated 1% of a utility’s retail sales. MREA argued the trigger language would have provided greater certainty to the solar industry and other net metering stakeholders (the threshold probably won’t be reached until 2020 or 2022 allowing time to establish a clear methodology for a study and gather data), but NorthWestern opposed the trigger and convinced the committee to strip the entire cost-benefit clause from the bill draft. The bill in its final form passed 8-0 with support from NorthWestern and MREA. This bill is an MREA priority for the 2017 Legislative Session.
LCNET5 would increase the 50 kilowatt net metering system cap to 250 kilowatts for government entities, including cities, counties, school districts, state government agencies, the university system, tribal governments and federal government entities. The bill was modified slightly from its original form, which would have extended the 250 kilowatt cap to all tax exempt entities. The bill drew opposition from NorthWestern Energy but passed in its final form on a vote of 6-2. This bill is an MREA priority for the 2017 Legislative Session.
MREA’s role and next steps
MREA played a central role in the interim committee’s study of net metering. MREA staff modeled and presented data detailing the benefits of net metering to other utility customers and the Montana economy, and testified at every meeting of the committee over the past year and a half, providing substantive feedback on the committee’s findings and recommendations to the Legislature.
MREA business members, including Jack Isbell—Solar Montana, Orion Thornton—Onsite Energy, Flathead Electric Cooperative, Janelle Stauff—Jordan Solar, Lee Tavenner—Solar Plexus, Henry Dykema—Sundance Solar, Brad Van Wert—Harvest Solar, and John Palm—Bozeman Green Build provided tours of their projects, supplied business information to the ETIC staff, and testified at key junctures. More than 400 individuals wrote the committee voicing their support for legislation that will expand and protect rooftop solar. MREA owes a huge “Thank You” to all of our allies at the Legislature.
Each of the draft bills listed above will be introduced at the Legislature in January 2017 with the endorsement of ETIC, but ultimately those bills will still have to make their way through committees of the House and Senate, full floor votes of the House and Senate, and across the Governor’s desk before they become law.
Legislature considers changes to Net Metering
August 21, 2016
The Montana Legislature’s Energy & Telecommunications Interim Committee (ETIC) is about to wrap up a 16-month study of Montana’s net metering law. Net metering has already driven millions of dollars of private investment in rooftop solar arrays and small scale wind turbines by giving Montana homeowners and businesses the option to generate their own energy, and the assurance that they’ll receive full, fair credit for extra energy they provide to their utility.
As the study finishes up, ETIC is considering a package of draft legislation that includes a bill to increase the 50 kilowatt net metering system cap to 250 kilowatts for universities, National Guard facilities, local governments, churches and other tax exempt properties. Another bill would trigger a detailed cost/benefit analysis of net metering when output from net metering systems reaches 1% of a utility’s sales. (Production from net metering systems in NorthWestern Energy service territory currently sits at about 0.1 to 0.2% of NorthWestern’s sales.) The draft legislation would also grandfather existing net metering customers under any future changes to the rate structure.
- Raise the net metering cap to 250 kilowatts for schools, local governments, and other tax exempt properties
- Create a clear path forward for net metering by triggering a thorough cost/benefit analysis when production from net metering systems hits 1% of utility sales.
- Protect the investment of existing solar customers by grandfathering them under any future changes to the net metering rate structure.
The draft bills are a modest yet constructive step forward. While they don’t reflect the full scope of net metering reforms MREA has advocated for, they would help create much needed regulatory certainty for Montana’s growing solar industry, give solar consumers assurance that their investment is secure, and open up new opportunities for energy savings at our military bases, schools, and local governments.
Bipartisan majorities have already given these bills a preliminary endorsement. We need your help to build on that momentum. Please take action by sending an email to ETIC with your views on the draft net metering legislation.
If you’d like to take a closer look, you can review each of the draft net metering bills (LCNET1-LCNET5) here, or give Ben a call at (406) 465-8920 with questions. To comment on the bills, send an email to email@example.com by August 25.
Net metering study: economic impacts and cost shift analysis
January 30, 2016
At the January 15 meeting of the Legislature’s Energy and Telecommunications Interim Committee (ETIC), legislators continued to dig into Montana’s net metering statute, but stopped short of proposing changes to the law.
Ben Brouwer, MREA’s Policy Director, and Orion Thornton, partner in Onsite Energy and MREA Vice President, both were invited by the committee to present information about the economic impact of the solar industry in Montana (download Ben’s presentation here). Legislative staff also presented a summary of the economic impacts of net metering. The staff report shared the experiences and perspectives of four Montana based solar installation businesses: Solar Plexus, Sundance Solar, Jordan Solar and Bozeman Green Build.
In advance of the January ETIC meeting, three state agencies analyzed the available data on net metering in Montana and concluded that there isn’t sufficient information to determine whether the rate structure and implementation of net metering by NorthWestern Energy shifts costs to other utility customers. For more details, review the memos prepared by Public Service Commission, Consumer Counsel and Department of Environmental Quality.
ETIC meets again in March, May, July and September. The committee is expected to conclude its study and possible draft legislation by July. In an op-ed published in newspapers across the state prior to the January 15 ETIC meeting, Ben called on the committee to use the following principles to guide any legislation the committee might endorse: 1) give consumers options, 2) remove arbitrary barriers, and 3) plan for the long term.
MREA will continue to closely monitor and participate in ETIC’s study of net metering. Stay tuned for more updates.
Victory! Montana-Dakota Utilities drops contested solar fee
MREA issued the following press release on November 19, 2015.
HELENA—Homeowners in eastern Montana will no longer face discriminatory fees if they choose to install solar after a Montana utility withdrew its plans earlier this week to levy an extra charge on customers with rooftop solar arrays or small wind generators. Montana-Dakota Utilities (MDU), which serves approximately 25,000 electric customers in eastern Montana, filed a proposal at the Montana Public Service Commission in July to raise rates 21 percent for all customers. The rate case had included an additional fee, called a demand charge, for residential solar customers. In a settlement filed on Thursday, MDU withdrew the charge.
“The people won here today,” said Jean and Floyd Dahlman, Rosebud County ranchers and long-time MDU customers. “This settlement proves that MDU’s proposed fee on customers who generate their own power was, in fact, unjustified and unnecessary. Individuals have the right to invest in small-scale wind or solar on their property without needless barriers.”
MDU agreed to drop the solar charge in a settlement with The Alliance for Solar Choice (TASC), a national group that planned to file testimony at the commission questioning MDU’s proposal. TASC spokesperson Sarah Wolfe commented, “Demand charges like what MDU proposed eliminate customers’ ability to go solar. MDU’s attempt to stop solar competition through this charge was unsupported by any evidence. Just last month we saw a solar charge overturned by the Wisconsin courts due to lack of evidence.”
The proposal by MDU grew a notably high number of public comments from people who were concerned that the fee would make investing in solar more costly. Commission staff received 115 comments by email opposing the charge and at a public hearing in Miles City in September, eight people testified against the charge. No public comments supporting the solar fee were submitted to the Commission.
The Dahlmans were among those who spoke out against the fee. “We’ve been seriously considering an investment in rooftop solar but MDU’s charge would have made that investment impossible.”
Ben Reed is an energy and economics consultant, and the owner of Winpower West in Billings, a business that sells solar arrays and small wind generators. He saw the fee as discriminatory and a threat to businesses like his. Reed pointed out that to-date, MDU only has four customers with on-site renewable energy systems.
“MDU’s proposal would have shut down solar businesses in Eastern Montana before they even had a chance to set up shop,” said Reed. “We shouldn’t let a utility drive away good paying jobs and economic opportunity. Also, a utility should not be allowed to have influence over energy choice by directly targeting renewable energy systems with baseless fees or other charges.”
Ben Brouwer with the Montana Renewable Energy Association, an organization that represents solar businesses and consumers, says that MDU’s charge would have set a bad precedent for other utilities in Montana.
“Private investment in rooftop solar is playing an important role in diversifying our state’s energy supply and economy,” said Brouwer. “The outcry of public opposition and the ultimate failure of MDU’s solar charge should make other utilities think twice before they try to limit the energy choices of their customers.”
Speak up on Regional Power Plan
October 28, 2015
The Northwest Power and Conservation Council has released a draft 20-year energy plan that will guide energy resource decisions in Montana, Idaho, Washington and Oregon. It’s crucially important that the Council, which is composed of two members from each of these four states, supports a final plan that prioritizes energy efficiency and renewable energy. Distributed solar resources can play an important role in serving our region’s electricity needs, but it’s important for the Council to hear from you.
Every five years the Council updates its long-range energy plan guiding the deployment of electricity resources in the Bonneville Power Administration service territory, which includes NorthWestern Energy and western Montana electric cooperatives.
The Draft 7th Power Plan is available for public comment until December 18th. The final plan will be released in February 2016.
In the 7th Plan, the Council needs to maintain the draft proposal’s endorsement of solar resources, including the proposed deployment of cost-effective distributed solar PV and solar generation coupled with battery storage. The final plan must also maintain the draft plan’s core energy efficiency targets and demand response priority as key strategies to save consumers money, improve reliability, and reduce carbon pollution.
It is crucial for Council members to hear from Montanans. Please take a few minutes to contact the Council and let them know that you support a final Plan that:
- prioritizes energy efficiency, and
- sets aggressive targets for deployment of renewable energy and storage technology.
You can also share your comments in person with the Council at public hearings in Kalispell and Missoula:
Kalispell public hearing: Monday, November 9th, 6:30-8:00 pm
Flathead Electric Cooperative board room
Missoula public hearing: Tuesday, November 10th, 6:30-8:00 pm
Double Tree Inn- Blackfoot Room
Thanks for all you do—
Ben Brouwer, Policy Director
Montana Renewable Energy Association
Committee weighs the benefits and costs of net metering law
September 30, 2015
At the September meeting of the Montana Legislature’s Energy and Telecommunications Interim Committee (ETIC), MREA’s Policy Director, Ben Brouwer, presented a preliminary evaluation of the economic impact from net metering on NorthWestern Energy ratepayers and the state’s economy. The message to Legislators from MREA was clear: the economic benefit of net metering far outweighs the costs.
The Committee’s study of net metering, triggered by the passage of Senate Joint Resolution 12 in the 2015 Legislature, has entered the data gathering phase. At the committee’s request, electric utilities, the electrical workers’ union and renewable energy industry groups submitted responses on September 1 to a series of questions pertaining to net metering costs, benefits, safety, interconnection standards, reliability, etc.
Modelling by MREA showed energy savings, economic activity, ratepayer benefits and avoided costs from greenhouse gas emissions outweighed the costs of state tax credits, USB incentives, integration costs and lost utility revenue by a ratio of 4 to 1. Demonstrating these benefits is an important step in debunking the misleading argument used by utilities that net metering creates an unfair “cost shift.”
The interim committee has reached out to staff of the Montana Consumer Counsel, Public Service Commission and Department of Environmental Quality for assistance analyzing the responses and data received to-date. MREA will provide a detailed analysis and critique of utility responses before the committee’s next meeting on January 15, 2016.
At the January meeting ETIC is expected to begin narrowing in on conclusions about the fairness of net metering and recommendations for the 2017 Legislature. Possible conclusions could include: 1) endorse some or all of MREA’s proposed legislation to expand net metering; 2) recommend that the 2017 Legislature leave the statute as-is; 3) recommend that the 2017 Legislature fund a detailed cost-benefit analysis of net metering and delay any changes to the law pending results of a detailed study; 4) recommend that the 2017 Legislature add extra charges for net metering customers or reduce the value of net metering credits below the retail rate.
Stay tuned for more updates and action alerts as the net metering interim study unfolds.
Clean Power Plan: Governor Bullock needs to hear from you
August 31, 2015
In August the Environmental Protection Agency released the Clean Power Plan, a responsible step to fight climate change. The plan sets Montana on a path to cut carbon pollution from power plants while re-investing in energy efficiency and renewable energy. This is a path that will protect our clean air and key industries while making room for new jobs in the clean energy sector.
But to take full advantage of this opportunity, we need Governor Bullock’s leadership. Let him know that you support a Montana solution to the Clean Power Plan that puts efficiency and renewable energy first.
Governor Bullock has a strong record on clean energy. He has repeatedly blocked attempts to roll back Montana’s energy conservation tax credits and renewable energy standard and he’s made it clear that he understands the imperative of addressing climate change.
Now Governor Bullock needs to hear from you. He needs to know that you support a made-in-Montana answer to the EPA’s Clean Power Plan. He needs to hear that you support a plan that protects our clean air, cuts climate pollution and creates new renewable energy jobs.
Please take a few minutes to send Governor Bullock a quick note, or leave him a message at his office by calling (406) 444-3111.
Thanks for all that you do—
Ben Brouwer, Policy Director
PS: Check out this powerful op-ed explaining why we need the Clean Power Plan, co-authored by Diana Maneta, MREA’s Executive Director. Then do your part to help out: tell Gov. Bullock to keep leading on clean energy.
Take Action: Stop Montana Dakota Utilities’ Attack on Solar
July 30, 2015
In a recent filing before the Public Service Commission, Montana Dakota Utilities proposed a 21% rate increase for their customers. On top of the double-digit rate hike, the utility wants to penalize homeowners who generate their own solar power by adding a new surcharge for net metering customers.
MDU hasn’t disclosed how much the solar surcharge will impact an average solar customer, but there’s no question that the fee will make it more difficult for homeowners to control their own power bills with a rooftop solar array. MDU is taking energy choices away from their customers.
All of this is especially alarming given that a legislative committee has just begun a study of net metering that MDU’s lobbyist supported in the Legislature. By taking their proposal for new solar fees straight to the PSC, MDU is circumventing the legislative process.
MDU has fewer than 10 solar customers, making this fee all the more arbitrary and discriminatory. It’s clear that MDU is trying to stop solar development before it’s even had a chance to get started in their eastern Montana service territory.
ACT NOW to stop this unprecedented attack on energy choice and economic opportunity.
1. Email MDU’s Director of Regulatory Affairs, Tamie Aberle, at firstname.lastname@example.org and ask MDU to drop the proposed net metering demand charge.
2. Email the Public Service Commission and ask the Commission to reject the MDU net metering demand charge. Send your email to: PSC_UtilityComment@mt.gov. In your comments to the PSC, be sure to reference Docket No. D2015.6.51.
Contact Ben Brouwer, Policy Director for MREA, at (406) 465-8920 or email@example.com.
Legislative interim study of net metering gets underway
June 30, 2015
The members of Montana’s Energy and Telecommunication Interim Committee (ETIC) met on June 5 to establish their work plan over the coming eighteen months. The legislative interim committee, which is composed of four Republicans and four Democrats, selected a study of net metering as one of their primary focus areas.
The study is guided by SJ 12, a resolution that passed the 2015 Legislature calling for a study of net metering. Within the broad scope of SJ 12, a cost/benefit analysis of net metering will receive the most attention of the committee, followed by a review of safety regulations for net metering systems, an examination of Montana incentives for net metering and a report of the economic impacts of the industry.
Ben Brouwer, MREA’s Policy Director, provided guidance to ETIC at their June meeting, suggesting the inclusion of additional benefits from net metering in ETIC’s analysis. MREA’s suggestions were favorably received by the committee and included in a questionnaire that will be sent to Montana’s investor owned utilities and rural electric cooperatives. A separate questionnaire has been provided to MREA. The responses and data generated by these questionnaires before the September 11 ETIC meeting will provide a starting point for the committee’s analysis of Montana’s existing net metering policy and potential expansions.
Public Service Commission role
At the June 5 ETIC meeting, the Administrator of the Montana PSC’s Regulatory Division offered staff assistance to the committee. It is not likely that the PSC would open a formal rate making docket on net metering without a request from the Legislature.
At their September meeting, members of ETIC will decide what to do with the data and input provided to them by MREA, the utilities and other stakeholders. They may request additional data to further inform their analysis or they may call on PSC staff and/or other state agency staff for analytical assistance. The timeline beyond ETIC’s September meeting has not been established.
The outcome of this study process is far from certain. ETIC does not have authority to pass legislation but they do have the ability to draft bills that could be introduced in Montana’s next Legislative Session beginning January 2017. Whether the committee recommends legislative action to roll back Montana’s net metering policy, expand it, or just leave it as-is, hinges on the outcome of the study and the active participation of MREA staff and members.
MREA is in the process of developing detailed responses to ETIC’s questionnaire on net metering. Don’t hesitate to contact Ben if you have input or questions on the process, and please stay tuned for opportunities to make your voice heard in this important discussion.
Energy and Telecommunication Interim Committee website
Net metering questionnaires
Net Metering at the Legislature: Half-time Report
February 27, 2015
Over the past few weeks, MREA’s priority legislation to make renewable energy more accessible and affordable to Montana consumers has been killed by the Montana Legislature. Hundreds of Montana businesses and individuals contacted their legislators, urging them to vote for MREA’s priority bills, but the outpouring of support wasn’t enough to overcome the powerful influence of utility lobbyists in Helena.
HB 192, sponsored by Rep. Art Wittich (R-Bozeman), was heard on January 19th, with an impressive turnout of fifteen businesses, consumers and organizations lining up in support of raising the cap from 50 kilowatts, an amount decided in 1999 when net metering legislation was first passed in Montana, to 1 megawatt. As John Palm from Bozeman Green Build pointed out, the low cap limits opportunities for large energy users to control their energy costs with renewable energy. Palm also pointed out that the cap complicates projects for installers by forcing any system over 50 kilowatts to be broken into two systems. Brad Van Wert from Harvest Solar in Gallatin Valley testified that his company experienced 300% growth in the last year but the cap restriction “has not changed to reflect the rapidly growing solar industry and the opportunity for jobs and economic stimulus right here in Montana”.
Leading the opposition to HB 192, John Fitzpatrick from NorthWestern Energy called the bill “the ratepayer’s subsidized energy for big box stores act of 2015.” Fitzpatrick insisted that raising the cap will benefit only the wealthy and big box stores and shift utility costs onto non net-metered customers. Montana Dakota Utilities, the Montana Electric Cooperative Association and the International Brotherhood of Electrical Workers also opposed the bill. Despite vigorous testimony from MREA and others pointing out the many benefits of net metering systems to the grid, as well as the authority of the Public Service Commission (PSC) to correct any cost shift if it exists, HB 192 died in the House energy committee on a vote of 5-10.
HB 188, sponsored by Rep. Art Wittich (R-Bozeman), would have allowed net metering customers to roll over their credits for a total of 24 months, rather than the current 12 months. The extension would give customers more flexibility to manage inter-annual weather and energy usage variability. The bill died in the House energy committee on a vote of 7-8.
SB 134, sponsored by Sen. Jennifer Fielder (R-Thompson Falls), was heard on January 20th, with another strong turnout of eighteen supporters urging passage of Aggregate Net Metering. The bill would have allowed for the owner of multiple electric meters on the same or adjacent properties to offset the energy usage from all of those meters with one renewable energy system. Among the supporters, Jack Isbell from Solar Montana in Helena explained that aggregate net metering “allows for locations to be picked based on their solar merit, versus close proximity…to the meter that draws the most electricity.” Rancher Art Hayes Jr. explained how he would benefit from aggregate net metering. Hayes has thirteen separate meters on his ranch and an astronomical electric bill during irrigation season. If he could aggregate the load of all those meters under one renewable energy system, the reduced costs and economy of scale would make a net metering system much more financially viable. SB 134 died on a vote of 3-10 in the Senate energy committee.
SB 182, sponsored by Sen. Mike Phillips (D-Bozeman), was heard on January 27th, with more than twenty proponents testifying in support of Neighborhood Net Metering. The bill would have allowed individuals to invest in a portion of a renewable energy system and receive proportionate credit on their electrical bill. If passed, the bill would have made net metering an option for people without an appropriate site or the financial means for their own renewable energy system. Ben Reed from Windpower West in Billings testified that Neighborhood Net Metering could lower and stabilize the cost of energy, whereas the price of energy from a utility “will not stay level, is unpredictable, and will only increase over time.” Clearly missing the point that this bill would make renewable energy more affordable, Fitzpatrick testified that only rich neighborhoods use net metering. SB 182 died in the Senate energy committee on a vote of 4-9.
On February 18th, Rep. Art Wittich (R-Bozeman) presented HB 485 as a last attempt at moving a compromise net metering bill forward. HB 485 would have allowed for aggregate net metering, raised the cap to 150 kilowatts, and triggered an immediate PSC study of cost shifting. Proponents pointed out that the bill addressed concerns from the previous net metering bills. Ed Gulick from High Plains Architect testified that other states that have undertaken similar studies have found significant net benefits to rate payers, the grid and non-solar customers, and that “we can’t allow our state laws to stifle innovation and hold Montana back.” Following the usual lineup of opponents, the bill was killed by the House energy committee on a vote of 6-9.
HB 489, sponsored by Rep. Randall Pinocci (R-Sun River), to expand existing net metering statutes to the rural electric cooperatives was also heard on the 18th. Jeff Fox from Renewable Northwest testified that every Montanan deserves the right to generate their own energy and be less dependent on a utility, and this bill “gives them those opportunities and respects the cooperative model and the cooperative differences.” Montana Electric Cooperatives Association’s lobbyists, Doug Hardy, testified that each co-op is unique and one statute won’t work for every co-op. HB 489 was tabled on a vote of 5-10.
SB 343, sponsored by Sen. Roger Webb (R-Billings), heard on February 19th, would have rolled back Montana’s net metering law by reducing the reimbursement rate for net-metered customers. The bill was tabled in committee by request of the sponsor.
The one net metering bill that is moving forward at this stage in the session is SJ 12, sponsored by Sen. Pat Connell (R-Hamilton). SJ 12 would require an interim legislative committee to study many aspects of net metering before the 2017 Legislative Session.
MREA’s 2015 Policy Priorities: Defend and Expand Opportunities for Distributed Renewable Energy
December 31, 2014
Net Metering: Fair Credit for Clean Energy
Broadly distributed around Montana are more than 1,000 solar arrays, small wind turbines and micro hydro projects that provide power to homes, businesses, schools, farms and ranches. When the wind is blowing or the sun is shining and these generators produce more energy than the owner is using, the extra electrons flow onto the power grid and are sold by the utility to neighboring customers. Montana law guarantees that renewable energy system owners get full credit on their power bill for each kilowatt-hour of clean energy they provide to the utility. That’s fair. Let’s keep it that way.
Why are Utilities Putting up Barriers to Rooftop Solar?
Renewable energy is helping Montana families and businesses take charge of their energy costs like never before. The wholesale cost of solar panels has dropped by two-thirds since 2008, and production from net-metered energy systems in Montana has nearly tripled in that time. However, monopoly utilities have historically made money by building big power plants and transmission lines and some see rooftop solar as unwelcome competition and a threat to their bottom line. In response, utilities around the country are lobbying hard to curb rooftop solar and small wind with new fees, taxes and rate hikes that dismantle the fair deal we have with net metering. Don’t let Montana utilities take away our clean energy options.&
Energy Savings, Consumer Protections
Studies in Texas, Minnesota, California, Vermont and Nevada demonstrate that on-site solar energy provides a net benefit to utility customers, including customers that don’t own solar panels. That’s because solar power comes online at times of high demand when power from other sources is most expensive. Plus, on-site renewables deliver energy without inefficient transmission line losses and costly pollution controls. These investments keep our energy dollars close to home and put engineers, electricians, roofers, and renewable energy installers to work. Local energy works for Montanans.
Make Renewable Energy Affordable and Accessible for All
Allow neighborhood net metering: Several states have passed laws that allow individual utility customers to buy into a local solar array or wind turbine. Subscribers receive a credit on their power bill according to how much of the project they own, and how much energy it produces each month. This way a customer can get the benefits of renewable energy even if they’re a renter or don’t have an ideal site for solar panels or a wind turbine on their own property.
Stop the credit giveaway: Under current law a net-metered customer must sacrifice any unused net metering credits to the utility at the end of a 12-month billing cycle. The customer receives no compensation for the extra energy they’ve given to the utility. As a matter of fairness, customers should be able to keep those credits for more than a year.
Lift the cap: Montana law caps the size of a NorthWestern Energy customer’s net-metered solar array, wind turbine or micro-hydro generator at 50 kilowatts (kW). That’s big enough for a home or small business, but it’s too small to allow a large farm, manufacturing facility, hospital or school to meet their energy needs with on-site clean energy. Most rural electric co-ops have even lower caps. Thirty-seven states allow net-metered systems larger than 50 kW, enabling businesses and institutions to secure greater energy savings.
Multiple meters, multiple savings: A farm, university or multi-unit housing project with multiple electric meters on the same or adjacent property should be able to run all those meters with the energy from one solar array or wind turbine. This simple fix would streamline on-site renewable energy projects and cut costs.