Montana Kicks off Utility-Scale Solar

In Montana, there is a lack of momentum and motivation to focus on energy efficiency, said Brian Fadie, clean energy program director at the Montana Environmental Information Center. However, utility-scale solar is growing rapidly. In this interview, he describes the slow pace of clean energy development in the state.

CEFF: How would you describe the solar-energy market's current successes and challenges in Montana?

Fadie: In 2017, the age of utility-scale solar officially arrived in Montana. Five projects at the three-megawatt size and one at the two-megawatt size gave us 17 megawatts of solar in one year. This more than doubled the state’s total installed solar capacity.

All of these were Public Utility Regulatory Policies Act (PURPA) projects. Community solar projects also continue to grow. Montana now has five community solar projects spread across five different electric co-ops with a sixth in the works.

One challenge is a 2017 Montana Public Service Commission decision on solar PURPA projects that significantly decreased the avoided cost rate while also cutting contract lengths from 25 to 15 years. This decision is being challenged in state court by solar advocates, however until it is resolved the ruling remains a major challenge for new solar PURPA projects.

Another challenge is that Montana’s retail rate net metering policy for rooftop solar also remains under attack by the primary local utility, NorthWestern Energy.

Finally, NorthWestern Energy in general remains hostile toward any renewable energy projects. The company's most recent long-term resource plan included zero new solar or wind resources and used new-build gas plants to meet 100 percent of new energy and capacity needs.

CEFF: What is your perspective on the energy efficiency market's successes and challenges at this time in Montana?

Fadie: Successes in energy efficiency have been limited.

A primary challenge is that NorthWestern Energy has had little interest in energy efficiency efforts since the loss of the regulatory mechanism that had been used by the company to recover electricity sales displaced by energy efficiency. This was called the Lost Revenue Adjustment Mechanism (LRAM). It has not been replaced.

Decoupling was discussed at the legislature during the 2017 session and during the interim. However, there is little visible momentum to enact decoupling during the coming legislative session.

CEFF: What stakeholder decisions would catalyze forward movement in these two markets in Montana?

Fadie: NorthWestern Energy plans to file a general electric rate case in September 2018, during which the utility may request the MPSC to make changes to net metering. The MPSC could decide changes are not warranted at this time for a variety of reasons or it could make many changes.

There is also a legislative session beginning in January 2019 where net metering may once again be something legislators take on, including removing an arbitrary 50-kw size cap for systems, allowing for community solar, and allowing aggregate net metering. All of these changes would help with distributed solar growth.

The resolution of the legal challenge to the MPSC’s anti-PURPA ruling will be key for future solar PURPA projects in Montana.

The legislature could also step in during the next session and, at the very least, define contract lengths for these projects as being greater than 15 years.

Note: Emma McDonald contributed research to this article.

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