HELENA — Montana’s requirement that utilities buy a minimum amount of renewable power, such as wind, has been an economic success, but shouldn’t be expanded, a legislative panel’s draft study says.
The report, endorsed unanimously late last month by the Energy and Telecommunications Interim Committee, says the mandate has led to new jobs, new electric generation and needed development in rural counties — and had a “negligible impact” on electric ratepayers.
Yet the report said the nine-year-old mandate, known as the “renewable portfolio standard,” should not be changed from its current level, which requires utilities to get 15 percent of their electricity from renewable sources by 2015.
Renewable sources of electricity include wind, solar and hydroelectric power.
Sen. Cliff Larsen, D-Missoula, who chairs the committee, said he thinks the standard could be increased as long as it doesn't harm other power producers or electric consumers.
But he said he joined the unanimous vote of the committee, composed evenly of Democrats and Republicans, because he agreed the RPS is achieving its goals and is adequate for now.
The panel voted to release the draft report for public comment, which is due by Aug. 20.
The committee will decide Sept. 8 whether to amend the report and submit it to the 2015 Legislature, along with a proposed bill to require utilities and electric suppliers to prepare a cost-benefit report on the mandate.
Montana’s RPS passed the state Legislature in 2005. U.S. Sen. Jon Tester, then a state senator from Big Sandy, sponsored the bill creating the mandate.
It required utilities and certain electric suppliers to get 5 percent of their electricity from renewable sources by 2008, 10 percent by 2010 and 15 percent by 2015. It also said some of the renewable-energy projects providing the power should be small, locally owned projects.
Only three entities are subject to the mandate: NorthWestern Energy, which is the state’s largest electric utility with 340,000 customers; Montana-Dakota Utilities, which serves about 25,000 people in eastern Montana, and PPL Treasure State, an electricity supplier.
Sen. Alan Olson, R-Roundup, who sponsored the resolution leading to the study, said this week he wanted an in-depth look at effects of the RPS, anticipating legislative efforts to repeal or expand it.
Olson voted against the 2005 bill creating the mandate and said he still doesn’t support it, but does not want it repealed because utilities have spent a lot of money on power plants and infrastructure to comply.
“I don’t think the RPS has been the panacea that then-Sen. Tester professed it would be; it hasn’t created a large number of jobs,” he said. “We don’t see any need to expand it, but at the same time there’s no need to repeal it.”
The study said 15 renewable power projects have opened in Montana since passage of the law — but that the largest one, the 135-megawat Judith Gap wind farm — had signed a contract with NorthWestern Energy before the RPS took effect.
It also said the projects created at least $423 million of investment, $1.2 million a year in property taxes, $850,000 in lease payments to landowners and 482 construction jobs, but only 26.5 full-time permanent jobs.
Claudia Rapkoch, spokeswoman for NorthWestern Energy, said the company has secured enough renewable power to meet the mandate through 2017. NorthWestern should be good until 2022 if contracted resources are built and the company gets a new 20-megawatt project from bids on a new community-based project, she added.
NorthWestern is “fine with the RPS the way it is,” she said, supporting neither a repeal nor an increase.
Jeff Fox, Montana policy manager for Renewable Northwest, a group supporting renewable power, said he finds it “a little frustrating that the study has revealed (the RPS) to be a successful policy, and there’s no appetite to change it.”
However, he said he understands the desire to leave it alone for now, given the possible, substantial changes in the state’s energy ownership and regulation of greenhouse gases.