By Amanda Durish Cook

Three solar advocates last week filed a joint challenge to the Montana Public Service Commission’s decision to alter the contract terms available to small generators under the Public Utility Regulatory Policies Act.

In a state district court complaint filed Dec. 13, Vote Solar, the Montana Environmental Information Center and solar developer Cypress Creek Renewables argue that Montana regulators “drastically and unreasonably” reduced the standard contract length and energy rate available to small renewable energy projects under PURPA. The commission last month reduced the contract length from 25 years to 15 years and cut the rates utilities must pay renewable projects up to 3 MW from $66/MWh to $31/MWh.

The PSC defended the decision as protecting ratepayers from overpaying for electricity produced by independent generators. NorthWestern Energy initially asked the commission for PURPA rate relief in May 2016.

The complaint characterizes the PSC’s decision as a “death knell for small solar development in Montana at a time when demand for renewable energy is growing, the cost of producing renewable energy is at an all-time low and NorthWestern has claimed a significant need for electric capacity that solar and wind developers are well-positioned to supply.”

The solar advocates say the decision resulted in dozens of solar projects across the state being put on hold. They argue it’s doubtful Montana will see solar expansion “in the foreseeable future” if the commission’s order stands. Cypress said it has delayed four prospective solar projects in Cascade County, where the challenge was filed.

“As a result, the state will lose hundreds of millions of dollars of economic investment, hundreds of construction jobs, affordable clean electricity and significant tax revenues for local governments,” the three organizations said in a statement. They asked the court to find the PSC’s order unreasonable and unlawful.

In June, Montana Commissioner Bob Lake was heard on a microphone appearing to confirm that state regulators put the rules in place knowing that they would stifle development of small solar projects. (See ‘Hot Mic’ Reveals Montana Move Against Solar QFs.) FERC earlier this year declined to enforce PURPA action against the Montana PSC.

PURPA requires utilities to pay qualifying facilities the cost a utility would incur for supplying the power itself or by obtaining supplies from another source. The law leaves it to each state’s utility commission to formulate those rates and set contract terms, depending on project size.

Adam Browning, executive director of Vote Solar, said competitive rates and longer contract lengths are needed to avoid utility monopolies.

“Now that solar is cost-competitive, fossil fuel interests in Montana and across the country are attempting to change the rules of the game. Fair treatment for solar opportunity will benefit Montana’s families, economy and environment,” Browning said.

Cypress Director of Market Development Casey May said the complaint is an attempt for a fair chance at competition for independent power producers. “Plainly put, we want to do business in Montana,” May said. “We want to increase Montanans’ access to clean energy, create jobs and increase the tax base of state and local governments, but this decision prevents that. … It’s a bad deal for Montanans and economic development across the state.”

TransAlta Scraps Wind Farm After PSC Ruling

In a related development, TransAlta said it won’t build the New Colony Wind Project because of a Dec. 12 PSC ruling that said NorthWestern should pay the wind farm $23.20/MWh over 15 years on a PURPA contract.

TransAlta had asked to be paid $43.63/MWh over 25 years. Northwestern had proposed paying $13.96/MWh.

Peter Key contributed to this article.