Montana cities working with NorthWestern Energy on clean power options
- Feb 24, 2021 12:51 pm GMTFeb 24, 2021 3:37 pm GMT
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In an effort to reduce the climate-changing harm caused by fossil fuel pollution, a new plan from four Montana governments and others would allow NorthWestern Energy customers in Montana to eventually have the option to buy power from newly developed solar or wind farms.
The plan was developed by the City of Missoula, Missoula County, the City of Bozeman and the City of Helena in partnership with NorthWestern Energy.
The four governments recently signed an interlocal agreement to hire a consultant to inform the development of a green tariff, which would be a special rate customers could pay to get newly developed clean energy.
There's no answer yet on a dollar amount for what the special tariff would be, but it wouldn't be a tax and it wouldn't be mandatory, according to Diana Maneta, Missoula County's sustainability program manager.
"It's not a tax," she said. "Tariff, in the utility industry, refers to a rate. This would be an option for customers of regulated utilities to buy power from newly developed renewable energy sources through a special rate, a tariff, on their utility bills. Tariff, unfortunately, sort of has a connotation that makes it sound like a green tax. But we all pay tariffs on our energy bills. That's just a rate for electricity."
Green tariff programs have worked in other states to create new renewable energy systems, Maneta noted, and the goal is to have the program in place in Montana by 2023.
She said the goal of the program would be to keep it as affordable as possible so that it is attractive to as many NorthWestern Energy customers as possible.
Also, the four governments want to ensure that it does not negatively impact non-participating customers.
In other places around the country, Maneta said green tariffs are lower than the regular amount customers were paying for energy. However, in some places the green tariff has been equal to or higher than the amount people were paying before.
As of 2019, the electricity-generation portfolio of NorthWestern Energy was about 61% carbon-free, with about 34% of its electricity coming from coal and about 5% coming from natural gas, according to its website. Maneta said those numbers are still roughly the same today.
In 2019, the City of Missoula and Missoula County committed to buying 100% clean energy by the year 2030 in an effort to mitigate climate change. The green tariff program wouldn't by itself ensure that the city and county reach that goal, but Maneta said it would be an important step to move the needle. The stipulation that the energy comes from new, rather than existing, renewable energy sources is important. That way, developers are incentivized to build new large-scale renewable energy systems in Montana.
If customers could simply choose to buy existing renewable power, Maneta said utilities could still sell fossil-fuel power to other customers who don't care where the power comes from.
"We're not looking to take credit for existing renewables that are out there," she said. "The goal is to get new renewable energy built and actually make a difference in the electricity sector."
Northwestern Energy currently has an "E+Green" program that allows customers to pay an extra fee for renewable energy produced out-of-state, she said. But, studies have shown that type of program doesn't really encourage the development of new renewable energy production and instead just reimburses existing projects.
The interlocal agreement states that the four governments will divide up the cost of hiring a consultant, Energy Strategies of Salt Lake City, to inform the development of a green tariff program. That consultant was selected after a review process, and Missoula County and the City of Missoula will each pay $20,000 of the total $138,000 price tag. The City of Bozeman will pitch in $90,000 and Helena will give $8,000.
Maneta said hiring a consultant to determine the green tariff cost is necessary because the "devil is in the details" and utility rate design is a complex issue.
"We're jointly bringing in a consultant in rate design to ensure we're most likely to get a positive outcome," she recently told members of the Missoula City Council. "Ultimately you would have an option to sign up for this green tariff and it would be a different rate you would pay for electricity. At this time, the cost of this would be unknown. The consultant will help us with that cost figuring. It would involve how cost, credits and resources work."
The City Council's administration and finance committee approved the interlocal agreement 11-0 at the end of January, with Councilman Jesse Ramos absent.
Montana James, the deputy director of the City of Missoula's community development division, said the city is on board.
"This is a really important step towards achieving the goal of 100% clean electricity for the Missoula Urban Area by 2030," James said.
The County and the City are inviting input from the public on a draft plan, which is available for review and comment at bit.ly/3aV3uhU.
Comments on the draft plan are requested by 5 p.m. Monday, March 1. There will be an additional opportunity for public comment once the plan is scheduled for consideration at a meeting of the city council and board of county commissioners.
If the plan is adopted, customers in Missoula would have the choice to purchase power from a community solar project in the Missoula area, for example.
A report from the Carbon Tracker recently found that the falling costs of renewable energy could translate to renewables being cheaper than 96% of coal-fired power by the year 2030.
In 2019, the Montana Public Service Commission approved a settlement agreement between NorthWestern Energy, the Montana Department of Environmental Quality, the Montana Consumer Counsel and Walmart. In the agreement, NorthWestern Energy agreed to initiate a stakeholder process to explore the development of a green tariff.
“Our 100% clean electricity goal was driven by our obligation to address climate change in order to protect our public health, safety and quality of life in Missoula County,” said Missoula County commissioner Dave Strohmaier. “This implementation plan is an essential step toward that goal.”
About 95% of the Missoula Urban Area's electric load comes from NorthWestern Energy right now, meaning that the city's energy mix is only a little over 61% clean energy right now. About 5% of the urban area's electric load comes from the Missoula Electric Cooperative, which supplies 95% clean energy.
That means Missoula has a decade to get another 40% of its electric load from NorthWestern Energy switched to renewables.
“The projects identified in this plan have great potential to accelerate the shift to a cleaner electric grid,” Missoula City Council President Bryan von Lossberg said. “However, they aren’t enough on their own, to reach 100% clean electricity. We look forward to advancing these projects with NorthWestern Energy while also actively seeking additional partners and opportunities to achieve our goal.”