{"id":16325,"date":"2017-02-21T08:17:19","date_gmt":"2017-02-21T15:17:19","guid":{"rendered":"http:\/\/lastbestnews.com\/site\/?p=16325"},"modified":"2017-02-21T21:53:50","modified_gmt":"2017-02-22T04:53:50","slug":"renewable-energy-program-already-shaky-may-be-killed","status":"publish","type":"post","link":"https:\/\/montana-mint.com\/lastbestnews\/2017\/02\/renewable-energy-program-already-shaky-may-be-killed\/","title":{"rendered":"Renewable energy program, already shaky, may be killed"},"content":{"rendered":"
\"Judith\"<\/a>

David J. Laporte<\/p>

The Judith Gap wind farm.<\/p><\/div>\n

A state program that requires utilities to buy from small-scale, locally owned renewable energy projects in Montana is facing a do-or-die moment in Helena.<\/p>\n

Sen. Keith Regier, R-Kalispell, is pushing Senate Bill 78<\/a>, which would eliminate the Community Renewable Energy Projects program. The bill passed a final vote last week in the Senate 30-19 and now moves into the House of Representatives.<\/p>\n

If there\u2019s one thing people on both sides agree on, it\u2019s that the program isn\u2019t working. Begun in 2005 as part of the Montana Renewable Portfolio Standard, it requires that Montana\u2019s major \u00a0utilities together produce 75 megawatts of new renewable energy. No single project can exceed 25 megawatts of energy, and they must be owned by Montanans.<\/p>\n

NorthWestern Energy, which wants to repeal the law, is producing just 25 megawatts through CREP\u201440 megawatts short of its goal. Montana-Dakota Utilities has hit its 10-megawatt target.<\/p>\n

\u201cIt was designed to promote the development of small renewables by local owners, but by definition it is not working,\u201d Regier said.<\/p>\n

The main sticking point is the ownership rule. By law, CREPs must be owned by Montana residents, local organizations or business entities in which at least half of the \u201cequity interests, income interests and voting interests are owned by Montana residents.\u201d<\/p>\n

Because such projects can cost millions of dollars, developers are often forced to look outside Montana for investors. That fails to meet the local ownership requirement, which is enforced by the Public Service Commission, the oversight agency.<\/p>\n

\u201cWe spend months and months working with these projects and it comes down to the wire and it doesn\u2019t work with these ownership rules,\u201d said Butch Larcombe, a spokesman for Northwestern Energy. \u201cIt is very frustrating for us.\u201d<\/p>\n

Take Greycliff Wind in Sweetgrass County, for example. Twice the developers\u2019 CREP projects were approved by NorthWestern Energy only to fail before the PSC.<\/p>\n

That exasperated Rhyno Stinchfield, CEO of Montana Wind Resources, a Greycliff developer.<\/p>\n

\u201cIt cost us into the thousands of dollars in legal costs to get that through,\u201d he said by phone. \u201cWe went back and forth with PSC (and) NorthWestern Energy\u2014I sure don\u2019t want to go through that process again.\u201d<\/p>\n

\"CapreAir_Variable\"<\/a><\/div><\/div><\/em>Martin Wilde, CEO and principal engineer of WINData, made similar gripes in a letter to the PSC almost three years ago.<\/p>\n

When his company proposed a 25-megawatt CREP wind project in the Crazy Mountains, he suggested letting outside investors help with initial investment but eventually turn it over to Montanans.<\/p>\n

Under his plan, an out-of-state investor would retain majority ownership of the project through the first 10 years. Then, in year 11, majority rights would revert to local owners for the remainder of the 25-year power purchase agreement.<\/p>\n

However, Wilde wrote, the PSC\u2019s strict interpretation of the ownership law prevented the plan from becoming feasible. The project died before developers could draw up a new agreement.<\/p>\n

Lawmakers have yet to consider such a change in the ownership rule. Sen. Richard Barrett, D-Missoula, proposed eliminating the local ownership rule entirely earlier this session, but recently dropped the bill.<\/p>\n

Brian Fadie, clean energy program director of the Montana Environmental Information Center, supports the idea of removing or at least improving the ownership rule.<\/p>\n

\u201cWe should be looking to improve the CREPs provision, rather than repeal the entire requirement,\u201d Fadie said in a phone interview. \u201cThe goal of it is to create clean energy while creating jobs and economic activity and tax payments in local communities. If we get rid of CREPs, we know that won\u2019t happen.\u201d<\/p>\n

Fadie pointed to the four CREP \u00a0projects currently selling to NorthWestern Energy as proof of favorable\u00a0impact. They have totaled $41.8 million in project investment and created 87 construction jobs and 5.5 full-time permanent jobs, according a 2014 legislative report.<\/p>\n

But PSC Vice Chairman Travis Kavulla was hesitant about changing the ownership rule.<\/p>\n

\u201cOur concern is that the legislative intent behind the CREP standard is promoting genuine local ownership,\u201d he said at a hearing for Regier\u2019s bill last month. \u201c(By striking out the rule), you would definitely be allowing CREPs that are locally owned to be built, it\u2019s just the meaning of local ownership would have been, in that situation, eviscerated.\u201d<\/p>\n

Even if the ownership rule were stricken, Regier wasn\u2019t convinced CREPs could work. Between the cap on megawatt production and the high cost of the projects, he said, most would be either uneconomical for the developers or result in higher rates for customers\u2014or both.<\/p>\n

\u201cYou still have a problem with economy of scale,\u201d he said by phone. \u201cSmaller units, 25 megawatts, run about $50 million, and the return on that is not going to be that great. \u2026 To make it work, they would have to charge more for the power.\u201d<\/p>\n

Kavulla concurred. \u201cCREPs are almost by definition quite costly,\u201d he said. \u201cThe cheaper ones come in at about $50 per megawatt hour, $12 more than most recently contracted wind projects.\u201d<\/p>\n

The 80-megawatt Vivaldi Springtime Wind Project in Reed Point, which is expected to be finished in early 2018, will sell its \u00a0power for $37.65 per megawatt hour. And the 78-megawatt Crazy Mountain Wind Farm will sell for $42.38 per megawatt hour during peak demand ($36.36 during lower demand).<\/p>\n

Older projects average around $50 or more. NorthWestern Energy also buys energy from the Spion Kop Wind Farm at $53.78 per megawatt hour\u2014a rate that was set back in 2012.<\/p>\n

\u201cYou might hear some opposition to this bill, and I think that opposition is from disappointment\u2014disappointment that the CREPS are not working and they like that concept,\u201d Regier said at his bill\u2019s hearing.<\/p>\n

Despite such problems, Kavulla is optimistic about the future of Montana\u2019s renewable energy portfolio. He pointed to about 200 megawatts of wind energy that has been announced as a sign of hope.<\/p>\n

Many factors drive increased renewable energy production, he said, including federal tax policy, declining costs and greater availability of technology, such as wind turbines.<\/p>\n

\u201cThis bill,\u201d he said, referring to the proposed repeal of CREPs, \u201cchanges nothing that drives those factors.\u201d<\/p>\n

Zachariah Bryan is a graduate student at the University of Montana School of Journalism and a reporter with the Community News Service, a partnership between the school and the Montana Newspaper Association.<\/i><\/p>\n","protected":false},"excerpt":{"rendered":"

A state program that requires utilities to buy from small-scale, locally owned renewable energy projects in Montana is facing a do-or-die moment in Helena. Sen. Keith Regier, R-Kalispell, is pushing Senate Bill 78, which would eliminate the Community Renewable Energy Projects program. The bill passed a final vote last week in the Senate 30-19 and […]<\/p>\n","protected":false},"author":158,"featured_media":16327,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,14],"tags":[5553,1122,5554,545,544],"class_list":["post-16325","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-montana","category-news","tag-community-renewable-energy-projects","tag-montana-legislature","tag-montana-renewable-portfolio-standard","tag-northwestern-energy","tag-public-service-commission","prominence-top-story"],"_links":{"self":[{"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/posts\/16325","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/users\/158"}],"replies":[{"embeddable":true,"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/comments?post=16325"}],"version-history":[{"count":0,"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/posts\/16325\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/media\/16327"}],"wp:attachment":[{"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/media?parent=16325"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/categories?post=16325"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/tags?post=16325"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}