Note: This is not NWE's proposal to change their net metering program rates. MREA has a separate webpage with updates on the rate case.
In August, MREA concluded its work on a regulatory docket which updated Northwestern Energy's interconnection agreements and procedures for small generators (including net metered systems). Interconnection procedures are the technical requirements and documents that are used when a generating system (like solar or wind) wants to connect to the grid. It includes everything from detailing the safety and technical standards required for the equipment, to the application forms you need to fill out and file with the utility. These are important issues, directly affecting how installers may design systems and how they plan their workflow with their customers. MREA saw this as a critical docket to be involved in and for that reason decided that for the first time ever we would intervene in a regulatory docket. This was an important step in the growth of our organization.
The docket was filed in January of 2018, but MREA has been working on this issue with NWE for several years. NWE began compiling this filing in 2016, the same year that the Federal Energy Regulatory Commission’s (FERC) released its updated Small Generator Interconnection Procedures (SGIP). NWE's filing was largely modeled after FERC's procedures. MREA was invited to participate in a preliminary review of the proposal before NWE officially filed it with the PSC. These conversations were productive and we greatly appreciated the opportunity to work with NWE. In fact, they accepted several of MREA's recommendations, although we were not able to find common ground on all issues. In January 2018, NWE formally filed their proposal to the PSC. For over 18 months, MREA worked through this contested case as an intervening party. We were also thrilled to have our friends at the Interstate Renewable Energy Council (IREC) working alongside us in the case. IREC is a national expert in interconnection standards. This past August, the docket reached its conclusion, although there is more work to be done.
What were the major changes and what did MREA focus on?
The biggest change is to the actual interconnection process itself. In short, the process is shifting from post-approval to pre-approval. Until now, the utility was sent a request for a net meter after the solar or wind system was installed. The new 'pre-approval' process requires more interaction with NWE before installation begins. The practical impact of this is that it may take longer to move through the entire installation process. Your installer will have the best understanding of the timeline of your project, and you should refer to their input and advice. Another change is that there will be a non-refundable interconnection administrative fee. This will be $200 for net metering systems.
In addition to the actual process itself, NWE proposed a significant change to the how "premises" is defined. The definition of a “net metering system” in Montana statute requires that a system must be “located on the customer-generator’s premises.” Because of this, the description and definition of “premises” significantly impacts how a net-metering system may be designed and installed. NWE's proposed definition imposed restrictions on net metering design that are impractical and unnecessary, and would make it harder for Montanans to install solar or wind on their property. This definition was one of MREA's core advocacy issues in the case.
MREA's second core issue was removing the requirement of a utility-required external disconnect switch (UEDS, also called a knife-blade disconnect). IREC and MREA both advocated this position. MREA is committed to promoting safe practices that protect Montana’s renewable energy installers as well as other workers that serve the industry, such as electricians, line workers, and utility personnel engaging with these systems. The UEDS can be used to isolate the system from the grid. However, modern inverters already perform this function. Due to rigorous technical and safety standards that modern inverters must meet, the requirement of a UEDS is unnecessary. In short, this piece of equipment is a redundant part of an installation that increases the cost of the system (in some cases up to $1,000).
Lastly, MREA supported IREC's advocacy on battery storage with net metering systems. IREC advocated for allowing storage systems to export energy to the grid, which NWE opposed. While there are no restrictions for on-site use, IREC advocated to add language specifically stating that storage was allowed to export energy to the grid.
What were the outcomes?
Premises. The Commission was not satisfied with NWE's definition of premises. This alone was a small win for MREA and our advocacy efforts! However, more work needs to be done. The Commission decided to initiate a rulemaking docket in order to investigate the premises issue further. Frustratingly, the Commission allowed NWE to implement their restrictive definition in the meantime. As such, this rulemaking docket is an important opportunity to continue working on this issue. MREA will continue advocating for a definition of ‘premises’ that does not restrict practical installations of renewable energy across Montana.
The UEDS. The Commission found MREA and IREC's advocacy on removing the UEDS for net metered systems compelling, and even pointed to key witnesses from NWE agreeing that for smaller systems there could be exceptions made to the requirement. Unfortunately, the Commission did not act on removing the requirement, seemingly wanting more data before considering removing the requirement. Again, more work needs to be done. Montana law requires that utilities submit interconnection information to the PSC every two years for their review. The Commission ordered NWE (and MREA and IREC) to file information specifically on the UEDS in this next biennial review. This means during the next review we will need to ensure the UEDS issue is given attention by the Commission.
Storage. The Commission determined that energy storage systems shall be allowed to export energy to the grid as part of a net metered system.This is a great win for IREC and for MREA! Despite NWE's pushback (both during the case and through a Motion for Reconsideration after the ruling), the Commission held firm. The implications of this are that energy storage systems that are integrated into a net metered system (for example: a battery system connected to a solar array) shall be allowed to export energy to the grid. Storage has often been described as a key to unlocking greater renewable energy development. This ruling will help make that a reality in Montana, all the while increasing the resiliency of distributed generation systems across the state.
The Commission ordered that the new procedures will take effective on October 1. That means after October 1st, new installations will need to follow the new procedures. As we mentioned earlier, you can contact your installer to ask about the new process. You can also reach out to MREA if you have questions.
MREA looks forward to working with the Commission and other stakeholders in the rulemaking docket on the premises definition. It will be critically important to continue our advocacy on this issue, and ensure that we arrive at a definition that does not needlessly restrict practical solar and wind installations at Montana's homes, farms and ranches, and businesses. A rulemaking is less formal than a contested case (like this docket or like the rate case), it does not require legal representation, and it typically takes 120 days from the issuance of the rulemaking notice to the end of the adoption of the final rule. We are expecting the rulemaking notice to be filed in the next 1-2 months.
MREA will continue to monitor and engage in the biennial interconnection reporting processes. This is something that MREA tracks as part of our regular advocacy work, but it will be even more important in this next iteration to provide additional information on the UEDS issue.
MREA is a leading voice for renewable energy advocacy in Montana.
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