NorthWestern Energy May Be Out Of Compliance with Community Renewables Law

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The Montana Environmental Information Center filed a suit last month in an attempt to overturn the Public Service Commission’s decision to grant NorthWestern Energy a waiver on the Community Renewable Energy Projects law. This law requires Northwestern to acquire a certain amount of their energy from small renewable energy producers, and for the past 5 years, the PSC has granted them waivers.

I got in touch with Brian Fadie at MEIC in Helena to learn more. I asked Brian to explain who they are and what it is they do.

BF: “MEIC is a membership based environmental advocacy organization. We’re based in Helena. We were started in 1973, so we’re celebrating our 45th year, this year.  Our mission is to protect Montanan’s right to a clean and healthful environment, as is enshrined in the Montana constitution. So, we work on clean air, clean water, and clean energy issues. I specifically focus in on clean energy. I’m the clean energy program director, is my official title. We do a lot of lobbying at the state legislature, defending clean energy laws. Between sessions, we do a lot of work at state agencies, on the energy side it’s a lot with the Public Service Commission, and also with NorthWestern energy, trying to move them towards a clean energy future.”

And MEIC was instrumental in passing the original law. I asked Brian to give us some of the background:

BF: “This Community renewable Energy Projects law is part of a larger renewable portfolio standard that passed in 2005.  Actually, senator Tester was the primary sponsor of the bill when he was in the state senate. The larger piece of it is 15% clean energy by 2015, that was the bigger headline part of the bill. But then there was also this renewable community energy projects that is in addition that, and that is what is at issue here, because the law required a certain amount of these projects be acquired by NorthWestern. And they just never have, they’ve never met the minimum required.”

The Public Service Commission is charged with enforcing the law but for the last five years, the PSC has granted NorthWestern waivers. Brian explained how the waiver process is supposed to work.

BF: “There’s a standard that the company needs to meet, in order to be granted a waiver. The standard in state law is that they have to take all reasonable steps toward compliance. And that’s a high standard, all reasonable steps, and when we took a look at their filings requesting the waiver, we identified a number of steps that they took that were unreasonable, in our opinion, and other steps that they could have taken, that would have been reasonable. We made that case to the Public Service Commission.”

But the PSC, in a split decision, did not agree and stood by the waiver.

BF: “Those commissions mainly said they just wanted to send a message to the legislature that they did not like this law. That, of course, is not the prevue of the Public Service Commission, the legislature creates the law and the commission implements them. We think the letter of the law is clear here, that Northwestern did not take all reasonable steps.”

Northwestern has argued that they deserve the waivers. They cite a lack of viable small project that are available. They point out their considerable existing renewable energy holdings, including more than 60 percent of the electricity that they provide to Montana customers coming from water, wind and solar generation.”

But the Community Renewable Energy Projects law was designed specifically to diversify NorthWestern’s holdings with small producers. This has the added benefit of economic development in rural communities, creating jobs and generating taxes. The legislature clearly considered this when drafting the law that insists on small-scale producers.

BF: This is a state law that was passed by the legislature, signed by the governor, and the company has had 13 years now to come into compliance, since it passed. And they never have. Instead the company has fought the law at the legislature, It has supported bills that have tried to eliminate this requirement, or they’ve gone to the PSC and tried to eliminate their requirement there through various procedural methods. The company has really fought this law every step of the way.”

So MEIC has asked a state district court judge to overturn the PSC ruling and approve fines against NorthWestern Energy that could amount to over a million dollars. And it is likely the legislature will revisit the Community Renewable Energy Projects law in the next session, but Governor Bullock vetoed the last attempt to gut the law. So, stay tuned as we report on developments in this story.

I’m Dave Hutchins reporting for KBMF.