Choteau Acantha Article – Industrial wind farm has broken ground in county–pub 3-30-16–
Choteau, Montana March, 30, 2016
By Nancy Thornton, Choteau Acantha reporter
A second industrial wind farm has broken ground southeast of Choteau, even as a wind farm half the size located on the new project’s western boundary was sold to a New York-based renewable energy investment company.
Teton County Commissioner Jim Hodgskiss said a Greenfield Wind LLC official, Matt Wilson, notified him that contractors would break ground during the week of March 20 for a 15-turbine wind farm next to the six-turbine Fairfield Wind project that was completed in May 2014.
The Teton County commissioners last summer approved a 10-year tax abatement for the proposed $47 million Greenfield Wind project while denying an abatement for the $19 million Fairfield Wind project.
Subsequently, Fairfield Wind appealed the state Department of Revenue’s determination that Fairfield Wind had a $19,118,781 market value. The matter is now before the Montana Board of Tax Appeals with all “discovery” documents due by April 25 and the hearing set for July 19.
Fairfield Wind’s 2015 tax bill was $323,569.83, an amount, with some later adjustments, that was paid under protest.
The Fairfield Wind farm is located in the Choteau elementary and high school districts and the proposed Greenfield Wind farm is in the Power High School and the Greenfield Elementary School districts.
Revenue officials estimated that Greenfield Wind would generate an estimated annual tax bill in the neighborhood of $863,000 under the cost approach, although with the tax abatement set for 50 percent during the first five years, local governments would receive only half of that.
Wilson works for Foundation Windpower LLC that owns a majority-member equity interest in Greenfield Wind LLC. The minority member of Greenfield Wind is Fairfield resident Martin Wilde who developed both wind farm projects under his company, WINData LLC.
Wilson and Wilde did not respond to invitations for telephone interviews.WINData has filed two lawsuits against Foundation Windpower in Teton County District Court that Judge Robert Olson recently dismissed. However, WINData has appealed the two cases to the Montana Supreme Court.
In December 2015 Foundation Windpower sold its interest in the Fairfield Wind project (the legal entity at that point was called Fairfield Wind Master Tenant LLC) to Greenbacker Wind LLC, which is a business created by Greenbacker Renewable Energy Corp. and Greenbacker Renewable Energy Co. LLC of New York, New York.
Greenbacker, in a December press release, said it acquired the Fairfield Wind project for $6,615,000 in cash and the assumption of $12,412,000 in debt for a total of $19,027,000 on Dec. 8, 2015. It is a “publicly registered, non-traded limited liability company that expects to acquire a diversified portfolio of income-producing renewable energy power plants, energy efficient projects and other sustainable investments,” according to its website.
The wind farm has two 1.6-megawatt and four 1.7-megawatt turbines. The generated electricity is sold to NorthWestern Energy under a long-term power purchase agreement that has 18.5 years remaining on the contract.
Greenbacker, citing the project as a “fund portfolio” for its investors, forecasts a 10.7 percent initial yield on the investment, but cautioned in its literature that that yield is not a measure of the fund’s performance and it is not necessarily indicative of distributions that the fund may provide to investors.
Wilde has had disputes with Foundation Windpower since mid-2015 and in court documents said he filed a notice of dissociation with the Fairfield Wind entity over Foundation Windpower’s refusal to supply him with accounting information, among other things. He refused to sign off on Foundation Windpower’s proposed monetary value of WINData’s 10- percent equity interest in Fairfield Wind and he declined to agree to the sale.
However, Foundation Windpower’s attorney Stephen Brown of Missoula successfully argued in Olson’s court in February that the operating agreement the pair of companies signed required that the dispute be brought in a California forum, not one in Montana.
Brown successfully argued a similar point when in July 2014, the Montana Supreme Court found in favor of San Diego Gas & Electric Co., (against Naturener USA that owns wind farms in Glacier and Toole counties) determining that the “consent to conduct all” provision of the first contract between the two parties required the parties to litigate all disputes Industrial wind farm has broken ground in county–pub 3-30-16– 2 pertaining to that contract in California. Brown represented San Diego Gas.
In a similar way, Olson dismissed Wilde’s lawsuit against Foundation Windpower, first in the dispute over Fairfield Wind, and second, over the Greenfield Wind
U.S. presidential candidate Sen. Bernie Sanders, I-Vt., has introduced legislation that he says would permanently extend the production tax credit (PTC) for renewables and drive over $500 billion in clean energy investments between now and 2030.The American Clean Energy Investment Act of 2015 and The Clean Energy Worker Just Transition Act – both co-sponsored by Sens. Jeff Merkley, D-Ore., and Edward J. Markey, D-Mass. – would significantly reduce carbon pollution and help put the U.S. on a path to more than double the size of its clean energy workforce to 10 million by 2030, says Sanders.The bills would allocate $41 billion to helping oil, gas and coal workers as they transition out of the fossil fuel industry. According to Sanders, the costs for these proposals are completely offset by repealing all subsidies for fossil fuels and ending the tax breaks that encourage corporate inversions.Sanders says The American Clean Energy Investment Act of 2015 would stimulate a strong, sustainable economy by spurring massive new investments in renewable energy and energy efficiency.Specifically, the act would permanently extend the PTC for renewable electricity generation from sources including wind and solar. It would also permanently extend the investment tax credit for advanced clean energy property and expand the 30% credit for offshore wind facilities.The Clean Energy Worker Just Transition Act would help coal miners and other fossil fuel workers and their families by connecting displaced workers with new job opportunities through vocational education and job skills programs. The bills would also provide support so that transitioning workers and their families could maintain family-level wages, health care and pensions until they are able to start new jobs, the senator explains.”The American Wind Energy Association [AWEA] deeply appreciates Sen. Sanders’ leadership in seeking long-term policy support to enable the growth of our nation’s wind energy sector,” AWEA says in a release from the senator. “This legislation is the latest example of his attention to wind energy and his leadership in promoting policies that will generate affordable, reliable and clean energy and provide a future for wind energy workers and American factories. We look forward to continuing to work with Sen. Sanders and his colleagues with the shared goal of delivering the benefits of wind energy to even more American families.”
|in News Departments > Policy Watch|
On Monday, President Barack Obama and U.S. Environmental Protection Agency (EPA) Administrator Gina McCarthy announced the roll-out of the Clean Power Plan (CPP) imposing carbon dioxide (CO2) standards on existing power plants. Given the intent of reducing CO2 emissions by 17% below 2005 levels by 2022 and 26% to 28% below 2005 levels by 2025, these rules will have a significant impact on industrial consumers of electricity, as well as on developers of fossil-fuel-fired and renewable (e.g., solar, biomass and wind) generation.
Obama has repeatedly stated his determination to regulate the roughly 40% of the nation’s greenhouse-gas (GHG) emissions that come from the energy sector. The EPA proposed rules on June 18, 2014, that would impose a complex program for regulating existing power plants. Monday’s rule brings the first stage of this rulemaking closer to a conclusion. Although the most attention is on the rules applicable to existing power plants, rules for regulation of CO2 from new and modified facilities is traveling in lockstep with the existing source rules.
Section 111(d) differs from the EPA’s conventional rulemaking authority. For new and modified power plants, the EPA simply issues standards (under CAA Section 111(b)) that are directly applicable to all new and modified affected facilities. The EPA proposed CO2 standards under CAA Section 111(b) for new power plants in January 2014 and for modified power plants in June 2014. The EPA’s 111(d) authority is more circumspect. Rarely employed, Section 111(d) grants the agency the authority to issue emission guidelines that then must be used by the states to craft programs that are consistent with the EPA’s stated objectives. These state programs must then be approved by the EPA. However, the guidelines are just that – options for how to create a program and not outright mandates as to what the state rules must entail. The EPA issued 111(d) standards for existing, unchanged power plants Monday that seek to establish a unique program unlike any other existing regulatory program.
The CPP establishes state-specific CO2 emission limits and requires that the states demonstrate how they will achieve those limits by the deadlines in 2022 and 2030. The concept of two-stage limits matches what was proposed in 2014. However, the EPA has extended the deadline for compliance with the initial standards from 2020 to 2022; the second-stage deadline remains unchanged at 2030. The CO2 limits are applicable to existing coal- and oil-fired power plants, as well as existing natural-gas-fired combined-cycle generating facilities – a change from the 2014 proposal.
In establishing its plan to comply with the 111(d) mandate, a state can choose to comply with one of three types of limits. First, and consistent with the 2014 proposal, a state can adopt a pound per megawatt-hour (lb/MWh) limit. Second, a state can adopt a total ton per year (tpy) CO2 cap that would apply within the state. This option was also discussed in the 2014 proposal, but no values were suggested for individual states. Third, a state can adopt a tpy CO2 cap that includes an allowance for new sources. Once the limit is established, a state must develop and implement a plan to achieve the limit. This plan can consist of either a conventional limit applicable to the electrical generating units covered by the CPP (i.e., coal- and oil-fired power plants and natural-gas-fired combined-cycle units), or it can reach “beyond the fence,” incorporating other CO2 reductions and taking credit for those when calculating compliance. It is the utilization of these “beyond the fence” measures, such as renewable energy standards and residential energy efficiency programs, to demonstrate compliance with standards applicable to power plants that fostered a lot of questions in 2014 as to the legality of the program. The EPA is also requiring a hard “backstop” limit that will automatically kick in and apply to individual regulated electrical generating units if the state program fails to achieve its intended “beyond the fence” reductions.
The EPA is clearly trying to promote nationwide or regional cap-and-trade programs. The final rules promote emissions trading mechanisms and discuss the CPP enabling states to generate “trading ready” allowances that avoid the need for interstate agreements. Expanding on language in the 2014 proposal, the EPA speaks of individual power plants being able to meet their obligations through emission rate credits (if a rate-based standard is adopted) or allowances (if a mass-based standard is adopted). Cap-and-trade was a clear element underlying the 2014 proposed rule, but it takes on a more prominent role in the final rule.
Implementation of the program will take place over the next 15 years. As noted above, each state has a limit it must attain by 2022 and a more stringent limit by 2030. Many of these limits have changed dramatically from the 2014 proposal (e.g., the 2030 limit for Washington increased from 215 lbs CO2/MWh to 983 lbs CO2/MWh, while North Dakota decreased from 1,783 lbs CO2/MWh to 1,305 lbs CO2/MWh). Each state must develop a plan for how it will attain these limits that must be reviewed and approved by EPA. If a state fails to propose a plan or the EPA disapproves the state’s plan, then the agency will impose requirements in that state. The initial submittals are due by Sept. 6, 2016. This initial submittal can consist of either a state’s final plan or an initial plan with a request for an extension. By Sept. 6, 2018, all final plans must be submitted. These plans must identify milestones used to demonstrate progress toward achieving the CO2 reduction goals.
The rules create the Clean Energy Incentive Program (CEIP), which provides an interesting opportunity for renewable energy developers. The CEIP allows states a mechanism to reward wind and solar projects that commence construction after a state submits its 111(d) plan to the EPA (or after Sept. 6, 2018, for states that choose not to submit a final state 111(d) plan by that date).
A project must be either located in a state or benefit a specific state to be eligible under the CEIP as part of that state’s 111(d) program. The states are required to include a CEIP implementation regimen in their 111(d) plan and account for allowances (if a mass-based plan approach) or emission rate credits (ERCs) if a rate-based plan approach. If the state does so and the wind or solar project commences construction after the state plan is submitted, then the project earns ERCs or allowances based on the quantity of metered megawatts generated in 2020 and 2021. Among renewables projects, only wind and solar are eligible. For every metered MWh generated in 2020 and 2021, the project will receive one ERC (half from the state and half from the EPA). Even states or tribal areas without any regulated generating units may provide ERCs so long as they are connected to the contiguous U.S. grid and meet certain eligibility requirements. The ERCs or allowances can be used for compliance by a regulated generating unit and are fully transferable prior to such use. A nationwide cap of 300 million tons of CO2 ERCs/allowances applies to the CEIP program (and includes ERCs/allowances awarded to low-income energy efficiency projects that reduce electricity usage in low-income communities in 2020 and/or 2021). In order to be eligible for the ERCs/allowances under the CEIP, developers are not required to demonstrate that their project is “additional” or surplus relative to a business-as-usual or state-goal-related baseline. Many questions abound about how the CEIP will work, and the EPA does not address them in Monday’s rule. Instead, the agency plans to issue another rule with the details of the CEIP.
Stay tuned as this process unfolds in the next few days, weeks and years. The EPA’s issuance of the rules shifts the burden to the states to develop plans and triggers further rulemaking to flesh out requirements like the CEIP. There will be opportunities to get involved in the federal rulemaking, as well as with state rulemaking efforts as the states navigate this maze of requirements and work to meet the tight deadlines.
Tom Wood is a partner at Stoel Rives LLP, where his practice focuses on the Clean Air Act.
Second wind farm going up near Fairfield
Karl Puckett, email@example.com 7:41 p.m. MDT May 1, 2015
(Photo: Tribune photo/Karl Puckett)
FAIRFIELD – Construction of a 25-megawatt, 15-tower wind farm is expected to begin Monday seven miles north of here, following difficult negotiations between the developer and NorthWestern Energy, which will purchase the power.
It’s called Greenfield Wind LLC.
The Montana Public Service Commission, which had rejected a settlement agreement on the power purchase price between NorthWestern and WINData LLC on Dec. 16, reconsidered and approved the 25-year contract March 4.
Now construction can proceed.
“Getting the power contract has been the biggest challenge here,” WINData CEO Martin Wilde said at the Greenfield site.
On Thursday, stakes marked the locations where towers will begin rising in August and September. A strong breeze was blowing 18 mph, which is typical.
“This is perfect wind,” Wilde said.
The Greenfield wind farm is 1.5 miles to the east of the 10-megawatt Fairfield wind farm, which Wilde completed a year ago.
Wilde, an early pioneer of wind development in Montana, would like to see more projects like the Fairfield and Greenfield wind farms constructed by Montana-based, independent power producers, but it isn’t easy, he says.
“In this case, they kind of had it out with us, and we sort of held our own and settled,” Wilde said of negotiations with NorthWestern.
WINData has a 20-year contract to sell power generated at the 10-megawatt, six turbine Fairfield wind farm to regulated utility NorthWestern Energy.
It negotiated a 25-year deal with NorthWestern for the Greenfield energy.
NorthWestern argued that the price of the electricity, $50.49-per-megawatt hour, was too high, Wilde said, and “we fought back.”
NorthWestern always gives prime consideration to how a price will be reflected on the bills of NorthWestern’s 342,000 electricity customers in Montana, NorthWestern spokesman Butch Larcombe said.
“And a lot of times the developers have a different price in mind than we do,” Larcombe said.
The U.S. Public Utility Regulatory Policies Act of 1978 created a new class of generating facilities called “non-utility generators” or “qualifying facilities” that would receive special rate and regulatory treatment.
One of the goals was to encourage development of renewable energy.
Greenfield is a qualifying facility.
In Montana, the Public Service Commission has established two categories of qualifying facilities, Wilde said.
One is the standard size, which is a maximum of 3 megawatts. Those projects come with “standard offer” contracts, and negotiations are not required.
Qualifying facilities that are larger than the standard size require negotiations, and the Greenfield wind farm is the first large QF wind project negotiated and approved in Montana, Wilde said.
Instead of NorthWestern producing the power, Wilde said, it is purchasing green energy from an independent power producer, bringing diversity to its power mix, Wilde said. WINData carries the risk for generation, not NorthWestern’s ratepayers, he added.
When NorthWestern needs power the most is at times of peak demand, when it’s very cold or hot, Larcombe said.
“And unfortunately, a lot of times, that’s when the wind isn’t blowing,” Larcombe said. “We have concerns about the wind’s ability to meet the needs of our portfolio at this point.”
Wilde started out in the wind business in Montana in 1991. He’s owned his own companies and also worked for the U.S. Department of Energy.
He’s investigated many sites for wind potential in state. That leg work has attracted large wind developers, he said.
“We were trying to get commercial wind energy in Montana,” he said.
Today, Wilde owns WINData LLC based in Fairfield.
While Montana has seen some successes in wind development, Wilde says the development climate is poor compared to other states such as Texas.
“It’s like learning how to box in prison,” Wilde said. “It’s a difficult environment to do wind, period.”
The export of wind-generated electricity from Montana could be robust, but Wilde says the NorthWestern seems intent to stick with hydro and coal generation.
Larcombe, NorthWestern Energy’s spokesman, defended the utility’s efforts to own and purchase renewable power.
NorthWestern owns or has contracts with 17 different wind projects in Montana with a capacity of 282 megawatts, he said.
“To say we’re not interested or haven’t been involved in wind production really isn’t an accurate statement,” he said.
When NorthWestern purchased PPL Montana’s hydroelectric facilities in November, it changed the look of the utility’s energy portfolio, he said.
The dams are helping NorthWestern meet the typical needs for electricity in Montana, he said.
Wind in the Fairfield area doesn’t blow trains off the tracks, as it’s been known to do in locations such as Browning, Wilde said.
However, there is always a breeze.
General Electric turbines that produce 1.7 megawatts each will be erected at the Greenfield wind farm.
The distance from the ground to the tip of the blades will be 422 feet, or about 42 stories.
They are the largest wind turbines in the state, Wilde said.
“They lend themselves to calm but constant winds, which is the kind of wind we have here,” Wilde said.
The wind farm should be connected to the grid by November, Wilde said.
WINData is partnering with Wind Power of San Francisco, which will help to arrange financing through large investment banks, Wilde said.
It usually costs about $2 million per megawatt to build a wind farm, which would put the project in the $45 million to $50 million range.
Dick Anderson Construction out of Great Falls has been hired for the job. GE will assist in installing the turbines.
The 15 wind towers will stand on a ridge in two rows on a ridge overlooking wheat and hay fields.
The land is being leased from four property owners who will receive royalties based on production.
“So this is an additional crop for farmers,” Wilde said.
Reach Tribune Staff Writer Karl Puckett at 406-791-1471, 1-800-438-6600 or firstname.lastname@example.org.
February 4th 2015
A stalled project to put 15 industrial-sized wind turbines next to the six already up and running between Choteau and Fairfield will get reconsideration before the Montana Public Service Commission on Feb. 10.
Martin Wilde of Fairfield, working through the company, Greenfield Wind L.L.C., has been in a disagreement with NorthWestern Energy since April 2014 over what the utility will pay the wind developer for each megawatt-hour generated. The cost to integrate the intermittent energy into the region’s power grid is also unsettled.
In December, both parties agreed to a price to avoid further litigation, and filed a joint motion to approve a settlement agreement with the PSC, but the commissioners denied the settlement by a 3-2 vote.
Since that time, Brad Johnson replaced Bill Gallagher on the commission. Gallagher, Roger Koopman and Kirk Bushman voted against the settlement, while Travis Kavulla and Bob Lake voted for it.
Wilde called the denial “an 11th hour surprise reversal ruling” that “appeared to result from Gallagher placing his personal opinion and politics ahead of federal and state laws and ahead of the best interests of Montana rate payers.”
The PSC has invited the parties to present oral arguments for reconsideration at its Feb. 10 meeting in Helena.
At stake is whether Teton County will see a doubling of wind generation and an additional six-figure tax bill it will pay. Wilde’s Fairfield Wind six-turbine project that cost more than $25 million will start paying taxes next November.
Greenfield Wind attorney Ryan Shaffer of Missoula stated in his written motion to reconsider that the PSC’s decision was “unlawful, unjust and unreasonable” and constitutes an unlawful discrimination against “qualifying facilities,” namely, certain types of small power generation facilities, such as those from renewable-energy sources like the wind.
According to the Edison Electric Institute, the federal Public Utility Regulatory Policies Act of 1978 (PURPA) requires electric utilities to purchase energy offered by qualifying facilities. The goal is to support the development of small, onsite renewable generation and to promote diversity of a utility’s supply portfolio.
Montana has a renewable portfolio standard that requires public utilities to obtain a percentage of their retail electricity sales from eligible renewable resources. That percentage grew to 15 percent in 2015 after starting at 5 percent in 2008.
The PURPA also requires utilities to purchase electric energy from qualifying facilities at rates that are just and reasonable to consumers and that are equal to the utility’s avoided cost, defined as the incremental energy and capacity cost the utility would have incurred generating power from its own operating plant.
The state, through the PSC, governs the process to define those rates and has set a standard rate for certain qualifying facilities, but the Greenfield Wind project does not meet the criteria for that rate.
Wilde said that Greenfield has been seeking a long-term contract under PURPA with NorthWestern since 2010. But those efforts have been stymied, Wilde said, by the PSC’s rules prohibiting such long-term contracts for projects over a three-megawatt eligibility cap for the standard rate. Greenfield would generate 25 megawatts.
The rule used to be that the standard rate would apply to facilities generating 10 megawatts or less, and Wilde’s Fairfield Wind six-turbines qualified for the standard rate by generating 10 MW.
While the two parties were far apart at first in their proposed rates for the power, Shaffer said, “Greenfield recognized that with some concessions on Greenfield’s part, the gap between the rate proposed by NorthWestern and the rate proposed by Greenfield could be largely bridged.”
The negotiated rate is $50.49 per megawatt-hour if Greenfield pays NorthWestern for integration or $53.99 per MWh if Greenfield delivers a wind-integrated product. Another stipulation calls for Greenfield to delay the commercial online date until 2016.
Back in 2011, NorthWestern was paying a weighted average cost of $60.44 per MWh for qualifying facilities.
The PSC staff recommended that the commission approve the settlement but the commission voted otherwise.
Recent case law in the state determined that rates for purchases from qualifying facilities must be based on “current avoided least cost resource data,” Shaffer said. He argued that the market prices underlying the negotiated rate and the PSC staff’s benchmarking analysis come directly from NorthWestern’s 2013 least cost plan.
Shaffer alleges that the Federal Energy Regulatory Commission found that the PSC is failing to implement federal law for projects exactly like Greenfield. His argument is tied to the PSC’s recent approval of NorthWestern’s purchase of PPL’s hydroelectric dams. That process used the same market rates for evaluating whether the hydroelectric power system was a least-cost source. The commission voted for approval of the acquisition, Shaffer said.
He said the settlement rate “would save between $5.9 and $10.6 million over the life of the project compared to the two most reasonable alternative avoided-cost benchmarks.”
Wilde said, “Rejection of the unopposed settlement unreasonably deprives NorthWestern’s customers of the benefits of these favorable rates.”
He added that Greenfield’s rates would be significantly higher if Greenfield is forced to fully litigate its claim to a “legally enforceable obligation,” which is a “must-buy” provision of PURPA.
He explained that PSC’s own rules provide that a utility shall purchase available power from any qualifying facility at either the standard rate determined by the commission to be appropriate for the utility, or at a rate which is a negotiated term of the contract between the utility and the qualifying facility.
Feb 4 2015
A silver inverter box in the basement of First United Methodist Church in Great Falls will take direct current from electricity generated by photovoltaic solar panels on the roof and turn them into alternating currents suitable for the power grid and powering the church.
Excess energy the system generates will cause the meter to spin backward, and NorthWestern Energy, the state’s largest utility, will purchase it from the church. Ken Thornton, an early backer of solar energy and the church’s building manager, led the project, with the PV panels installed in the summer. It will begin working next month.
“It’s funny, this is where they used to store the coal,” said Thornton one day last week, pointing out a nearby room where circles still remain on the ceiling indicating manholes where coal from wagons was once dropped into the facility and burned in boilers.
Power generation at the church is evolving thanks in part to net metering, a billing system in which surplus energy generated by a customer’s solar, wind or hydro-power system goes back on NorthWestern’s electric system with the customer receiving credit at retail rates. The 8-kilowatt rooftop solar system at First United will save an estimated $1,500 a year in energy costs.
Net metering has been around in Montana since 1999. It’s designed to encourage rooftop solar and other small renewable power generators that are easier on the environment. In Montana, customers of investor-owned utilities, such as the church can take advantage of it.
Expanding it to spur even more solar, wind and hydro projects at residences, farms and ranches, housing, businesses and even neighborhoods is a hot topic at the 2015 Legislature, spurred in part by the plummeting cost of solar.
“Renewable energy standards are kind of old hat,” said Kyla Maki, clean energy program director for the Montana Environmental Information Center, of the green power standards that dominated past energy policy discussions at the Capitol. “We’re now talking rooftop solar.”
The benefits of increasing net metering, Maki added, will go to the increasing number of people who are interested in investing in renewable energy systems on their property.
Some Republicans are joining conservation groups and companies in the renewable energy business in supporting an expansion of net metering in Montana.
“This is a freedom bill,” said Rep. Art Wittich, R-Bozeman. “It would allow for energy freedom, so you don’t have to buy power from a monopoly utility that decides how they are going to generate it. You can decided how you are going to generate your own power.”
Wittich is sponsoring a bill that would increase the allowable output of a renewable energy system eligible for net metering credits from the current 50 kilowatts to 1 megawatt.
Businesses that sell solar and wind systems see an opportunity to boost their businesses, create jobs and install more renewable systems at farms and ranches and multi-unit housing.
“You have to strike while the iron is hot,” said John Foster, a community wind specialist for Moodie Wind Energy in Great Falls, a subset of Moodie Implement, who sells wind and solar systems. “That’s really it. And net metering hasn’t been upgraded here in Montana since its inception.”
The legislation would provide incentive for farmers and ranchers to install larger systems that generate more power, making upfront investments more economical, Foster said. And allowing larger turbines will open up new geographic markets for him because they are more cost-effective even in areas with less wind, he said.
Foster also is a big supporter of a bill that would allow a customer generator participating in net metering to carry forward remaining unused kilowatt-hour credits from a solar or wind system and apply excess credits to separately metered accounts.
This bill is important to farmers and ranchers who often have several meters on their land for their home, out-buildings or water pumps for irrigation and stock water, Foster said. Right now, only a single meter can receive credits.
Efforts to expand net metering were shot down in 2013, Foster noted, but the “political climate is right” this session with more conservatives on board.
NorthWestern Energy, which has 345,000 electricity customers in Montana, sees the expansion as corporate welfare, said John Fitzpatrick, chief lobbyist for NorthWestern Energy.
Last week, Fitzpatrick told a legislative committee that net metering had grown to industrial proportions in other states with big box stores such as Walmart becoming the largest beneficiaries.
“Net metering is not a business plan,” Fitzpatrick said. ‘It’s a welfare program, and it’s the worst kind of welfare Democrats hate.”
About 1,200 residential and small business customers of NorthWestern currently have net meters, and the utility has been instrumental in the installation of net-metered systems in Montana over the past two decades, NorthWestern spokesman Butch Larcombe said.
“If anybody says we’re opposed to net metering, that just isn’t accurate,” he said.
Each customer of the utility pays a universal system benefits (USB) charge as a result of the original net metering legislation in 1999, he said, and that funding is used for a number of programs, including providing grants to those who install renewable energy systems, he said.
As a result, many of the people who have installed solar panels on their roof, or a wind turbine, are being subsidized by other NorthWestern customers, Larcombe said. Moreover, he added, when they use the electricity they generate to get a credit, it reduces what they pay to maintain the power grid even though they continue to use it, shifting the costs to other customers.
He also noted that NorthWestern is overpaying net metered customers because it buys the power at retail, which is a higher cost than the cost the utility would pay for the power on the market or the cost of generation.
A broader conversation is in order about the state’s net metering policy to make sure it’s fair to everybody, and that’s why NorthWestern opposes the legislation, Larcombe said.
Gary Wiens of the Montana Rural Cooperatives’ Association also brought up concerns about cost shift to a legislative committee last week.
Wittich doesn’t buy the cost shift argument.
Increasing the net meting cap means people could build larger renewable systems and get credit for them, he said. And ore people want to use solar at business, apartments, neighborhoods and residences, yet the criteria to take advantage of the credits is arbitrary, Wittich said. Right now, he said, only a fraction of the electricity produced in the state is “homegrown energy,” and that’s low compared to other states.
Wittich’s bill increasing the cap on the size of the home grown energy systems that could receive credits is just one of 10 or so bills aimed at expanding net metering in one form or another.
Based on lobbying for and against the bills, Wittich says net metering is among the top 10 issues of the legislative session.
The bill that would allow credits to be applied to separate meters is sponsored by Sen. Jennifer Fielder, R-Thompson Falls.
Fielder told members of the Senate Energy and Telecommunications Committee that she had taken an interest in homegrown renewable energy systems because they help Montanans become self-reliant.
“It promotes self-realization and energy independence for the little guy,” she said.
Mike Huber, a 45-year-old rancher who lives south of Great Falls, said he’s investigated putting up a wind turbine. But he’s refrained because right now he could only receive credits for one meter if he invested in a renewable system. But he has six meters alone at one address and “obviously I can’t afford to put a solar or wind generator at each one.”
He supports legislation allowing excess credits to be applied to additional meters.
Rep. Randy Pinocci, R-Sun River, is sponsoring legislation that also would increase the cap on the size of renewable systems that could receive credits in territories served by rural electric cooperatives.
Pinocci said he decided to take action in the Legislature because he wanted to put a larger wind turbine on his property, but couldn’t because of a cap under the current rules. He called the cap “a joke” because smaller turbines do not produce enough energy for farming and ranching operations to justify the investment.
“The bigger your wind turbine, the easier it is to pay for it, and the more money you make,” he said.
Renewable energy has been seen a Democratic issue, Pinocci said, but Republicans are getting involved now and he doesn’t care whether it’s a Republican of Democratic issue. In his view, limits on the size of renewable energy projects in areas served by rural electric cooperatives is discouraging investment in renewable projects in rural areas. Pinocci, a freshman, said lawmakers shouldn’t be influenced by lobbying from NorthWestern or rural cooperatives.
“If any representative votes against my bill, I believe the constituents are going to say, ‘No way, what you did was a mistake,'” said Pinocci.
Conservation groups such as MEIC, the Northern Plains Resources Council and renewable energy organizations are rallying the troops in support of the legislation. The Helena-based Alternative Energy Resources Organization, or AERO, put out an “action alert” about a hearing today in the Senate Energy and Telecommunications Committee about a bill from Sen. Mike Phillips, D-Bozeman.
The Montana Neighborhood Net Metering Act would allowed neighborhood energy facilities to connect to a utility’s distribution system. Businesses and individuals could then buy into the system.
First United Methodist Church installed the 8-kilowatt PV panels this past summer . In the future, Thornton hopes to put more panels up to increase the output to 25 to 30 kilowatts, which would cover the church’s yearly electricity bill of $5,000. The cost of the first phase was $15,000.
Over the past five years, the price of solar panels has dropped 80 percent as the result of the recession and competition from China, Thornton said. That and innovations in the manufacturing processes has resulted in less expensive and more efficient solar panels, he said.
“I’ve been doing this for 30 years,” said Thornton, 60, who holds a mechanical engineering technology degree from Montana State University. “So at this point, it’s becoming real economical to put solar panels on buildings.
The church’s roof sits at a 45-degree angle, and it faces south. The ideal slope for catching the sun’s rays in Great Falls is 47 degrees.
“Oh, it’s perfect, Thornton said.
The amount of electricity generation allowed under the current net metering system for NorthWestern customers is adequate, he said. The church does not need to install a larger system to meet its electricity needs, Thornton said. He wants to make sure Montana doesn’t lose the net metering it already has for residential and small commercial systems.
But Thornton supports the neighborhood net metering legislation, and the bill that would make it easier for net metering projects in rural areas.
Reach Tribune Staff Writer Karl Puckett at 406-791-1471, 1-800-438-6600 or email@example.com. Twitter: @GFTrib_KPuckett.
Greenfield Wind and NorthWestern Energy have asked the Montana PSC to reconsider its rejection of a power purchase agreement for the output from Greenfield’s 25-MW wind project, which is under construction near Fairfield, Mont.
By a 3-2 vote, the PSC in December refused to approve the contract, even though most parties in the case supported the deal and none opposed it [Docket No. D2014.4.43].
“This motion presents a critical question of whether the commission will approve a reasonable long-term avoided cost negotiated between a large QF and NorthWestern, or whether the commission will subject the parties, and quite possibly the commission itself, to further litigation,” Greenfield said in its Jan. 8 filing, which called the decision “unlawful, unjust and unreasonable.”
The decision was made during a Dec. 16 commission work session after considerable discussion of the perceived pros and cons of the 25-year deal, which included a net rate of about $50.49/MWh if the developer paid NorthWestern for wind integration, or $53.99/MWh if Greenfield delivered a wind-integrated product.
During settlement discussions with NorthWestern, Greenfield agreed to delay the commercial on-line date for the full contract rate until 2016, in light of the utility’s near-term long position It would receive $19.99/MWh, minus integration costs, for any generation delivered in 2015; its currently scheduled on-line date is Oct. 15, 2015.
NorthWestern initially asked the commission in April 2014 to set terms and conditions of the PPA because it was not selected through an all-source solicitation, as required under a commission rule that FERC previously determined was inconsistent with PURPA regulations (CU No. 1639 ).
“NorthWestern is in the untenable position of being constrained by an administrative rule that FERC has found to be inconsistent with federal law,” the utility said.
The rates and terms in the stipulation “are consistent with, and likely significantly below, any reasonable current estimate of NorthWestern’s actual avoided costs,” Greenfield said in its Jan. 8 petition.
MPSC staff’s projections indicated the settlement rate would save NorthWestern’s customers between $5.9 million and $10.6 million over the life of the project, compared to the two most reasonable alternative avoided-cost benchmarks, Greenfield also said in its filing—and pointed out that the rates were lower than all five of the benchmark rates staff used in its evaluation.
In fact, the market prices underlying the negotiated rate and staff’s benchmarking analysis came from NorthWestern’s 2013 least-cost plan, and are the same prices used to evaluate whether the utility’s recent acquisition of PPL Montana’s hydro resources was a least-cost resource, Greenfield said.
Commissioner Travis Kavulla, who voted to approve the stipulation, said during the Dec. 16 work session that commission staff used more analysis in reviewing the Greenfield deal than NorthWestern did to assess the value of its $870-million purchase of PPL Montana’s hydro portfolio (CU No. 1662 ), under which power is priced at about $57/MWh.
That acquisition was also approved outside of an all-source solicitation, Greenfield’s filing noted.
Rejection of the negotiated rate will “launch the parties and the commission back into unnecessary and costly litigation,” Greenfield said, and could result in rates that are significantly higher than those included in the stipulation.
Greenfield also said the apparent rationale for rejection of the unopposed stipulation “rests upon unlawful discrimination against QF projects, which combined with other recent events would constitute an actionable violation of federal and state law if allowed to stand.”
The notice of commission action denying the settlement did not articulate the commission’s reasons for denial, NorthWestern pointed out in its filing in support of Greenfield’s petition. Besides reconsideration, NorthWestern asked the commission to provide the rationale for its decision.
Chair Bill Gallagher led the opposition to the settlement during the commission’s work session.
“I am dissatisfied that this stipulation is fair and reasonable,” Gallagher said during the meeting. “I like stipulations to come after hearings.”
Gallagher added that the record was insufficient and went on to criticize FERC’s PURPA regulations, likening them to a program that would provide unskilled people with incentives to become housepainters and then require homeowners to purchase their services over those of more qualified painters.
Gallagher also warned that if the PSC approved the settlement, there would be a line of developers down the hall applying for QF status. “What are you going to do with the ones that follow? NorthWestern would end up selling this unneeded power at a loss,” he said, adding that “these new QFs will come in and offset our native power.”
Gallagher has since retired from the commission and was replaced in January by Brad Johnson, who was elected in November 2014.
Greenfield is hoping the change in chair may result in a different outcome.
“Any commissioner that is going to obey federal and state law and be responsive to recent FERC and state court rulings and has the interest of Montana ratepayers will vote in favor of this—there is no other vote,” Greenfield spokesman Marty Wilde told Clearing Up.
“This is a clear case of where federal and state law—and the Montana commission’s own rulings—dictate what the decision needs to be.”
Then there’s the economics, Wilde said—the commission approved the PPL Hydro purchase at about $58/MWh, and “we’re looking at $50.49/MWh.
“We’re pretty hopeful that once they reconsider, maybe with the fresh eyes of Brad Johnson, they’ll be clear on what the right decision is.”
Montana PSC attorney Jason Brown said staff will likely waive the requirement for action on the motion within 10 days of filing—otherwise the petition would be automatically deemed denied—so the commission can take it up later this month.
If the commission rejects the petition and settlement, there’s a good chance the case will be continued and heard on its merits, Brown said.
The PSC could also agree to reconsideration and then issue an order approving the settlement [Jude Noland].
Copyright © 2015, Energy NewsData Corporation
Clearing Up • January 16, 2015 • No. 1680 • Page 11