As Solar Energy Heats Up,
by Tom Lutey
NorthWestern Energy is asking Montana to pull the plug on solar projects, at least until the utility can get better terms from the state on ones it legally can't refuse.
The utility, which provides electricity to half of Montana, told Montana's Public Service Commission on June 9 that the mandated price it must pay to small commercial solar projects of 3 megawatts or less is too high and hurting consumers. The projects, known as qualifying facilities, or QFs have been popping up like dandelions because Montana's guaranteed rate is too generous, according to the utility.
"For each 3 megawatt project, the differential between the QF rate and the rate we propose is about $5 million per solar contract," said John Alke, NorthWestern Attorney. The contracts run 25 years.
The utility wants the current rate cut in half and the contracts shortened, but until that happens, it wants out of its decade's old obligation for accept solar QFs.
The Montana Consumer Council, which represents ratepayers in regulated utility cases, sided with NorthWestern, arguing the price promised to solar farms was more than utility customers should pay.
At issue is a 48-year-old federal law promoting alternative energy projects. The Public Utilities Regulatory Policies Act, or PURPA, requires utilities to buy power from QFs, under price and contract terms set by state governments. Montana's rate is $66 per megawatt hour, coincidently similar to the price NorthWestern gets for its own hydroelectric power.
The solar projects are small, each capable of powering about 540 homes at most, but there have been several proposed, more than 80 on the current docket, NorthWestern said, with many more casual inquiries, according to testimony.
However Jenny Harbine, of Vote Solar, told the PSC there really wasn't a crush of solar projects as the utility suggested. Few of the applications would actually become solar farms.
"NorthWestern offers no support for its apparent belief that all or most of the current interconnection request will make it through the end of the process," Harbine said.
Suspending PURPA for NorthWestern both violates the mandate and harms solar companies invested in Montana projects, Harbine said. The projects aren't cheap.
North Carolina-based FLS Energy told the PSC it would spend roughly $100 million developing its 14 Montana projects during the next 18 months.
The PSC is likely to establish a new price and contract terms for solar in the next six months, Harbine said, during which time it should have to use the current rate.
But NorthWestern isn't just shutting down solar projects, Alke said. The company has nine solar farms under contract now, mostly with Cypress Creek Renewables, of California. It also has agreed to terms with FLS Energy, for its projects not yet under contract. The locations for the solar farms, each roughly 40 acres in size, are scattered across Montana from Hardin to Missoula.
A third company, Pacific Northwest Solar, of Oregon, has 21 projects to which NorthWestern will accept, Alke said. Combined, the 44 solar projects account for 135 megawatts, more energy than offered by the original phase of Judith Gap Wind Farm.
The Public Service Commission will meet Thursday to decide whether to block the PURPA requirement. If it doesn't, NorthWestern will have to keep adding solar projects.
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