PSC urged to reject rule change on small power projects

2013-06-25T02:15:00Z PSC urged to reject rule change on small power projectsBy Mike Dennison of The Standard State Bureau Montana Standard

HELENA – Developers of small renewable-power projects in Montana on Monday urged the state Public Service Commission to reject a rule change they say will sink any future projects.

At a three-hour hearing before the PSC in Helena, they said the change will simply enable NorthWestern Energy to build or buy whatever electric-power project it wants, and ignore buying from small, independent projects that can benefit consumers and provide development in rural Montana.

“My view is that NorthWestern sees all of these little projects, plain and simple, as just a pain the ass,” said Roger Kirk, a Bozeman developer of small hydroelectric projects. “But they’re good, little projects. …

“These little projects provide steady, local jobs. The money stays in Montana.”

The rule change primarily affects small hydro- and wind-power projects, which can sell their power to NorthWestern at prices set by the PSC. NorthWestern then folds the power into its electricity supply for its 300,000-plus customers in Montana.

Under current rules, projects up to 10 megawatts in size can get a contract to sell their power to NorthWestern at the set rate.

The rate stems from a federal law that says utilities must buy power from small, renewable-power projects under certain circumstances.

But the rule change, proposed by PSC Chairman Bill Gallagher, R-Helena, would say projects no bigger than 100 kilowatts — one-hundredth of the current limit – could get a contract at the set rate.

Project developers say at that size, no project is financially feasible, and that the change effectively wipes out the market for small producers to build and sell power to NorthWestern – their only real option for small projects in Montana.

The only entity to speak in support of the rule change Monday was NorthWestern Energy.

John Bushnell, lead electricity supply planner for NorthWestern, said changing the rule will allow the company to acquire power from the lowest-cost source – and not force it to buy from small producers who qualify for the set rate, which can be higher than the market.

The small projects should have to compete against all other proposed projects, to see who has the lowest cost, he said.

But developers argued that NorthWestern rarely holds such bid competitions and has resisted any contracts with small producers – unless forced by the current rule to do so.

“NorthWestern has vigorously blocked us at every turn, for the 20 years that I’ve been in this business,” said Marty Wilde, a wind-power consultant from north-central Montana.

They also said the price set by the PSC is supposed to reflect the cost NorthWestern would incur if it built its own project – and that current contracts are not a bad deal for consumers.

A rancher and farmer testified against the rule change, saying small power projects offer them a chance to develop their property and earn some additional, needed income.

Rick Jarrett, a rancher from Springdale, said he’s worked with developers for 10 years on a potential project, and “it seems like the goal posts keep moving.”

“It would make a difference if I could export this product called wind,” he said. “I know that it would help my county.”

The commission will decide later on whether to adopt the rule change.

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