State land

A solar power array is planned for the Alkali Creek area northwest of Billings.

A 480-acre solar farm proposed for northwest edge of Billings is heating up as renewable energy politics sour at the Montana Legislature.

The MT Sun solar farm would produce 80 megawatts of electricity, enough energy to power 14,400 homes. At 480 acres, it would be Montana’s largest solar project and the first on public land.

The state of Montana signed a lease with MT Sun last September and expects to begin the environmental work on the project in the coming months. Because the property involved is trust land, money from the lease would be given to Montana’s public schools.

“Potentially, should it be all built out, we could be looking at $200,000 a year,” said Mike Atwood of the Department of Natural Resources and Conservation.

At least initially, the lease payments would be $124,800, according to DNRC. Taxes collected from the solar project are expected to be more than a $1 million a year, with Yellowstone County being the biggest beneficiary.

However, there are dark skies forming over Montana solar projects. The Montana Legislature is debating whether to weaken state laws supporting the development of solar and other renewable energy resources. Last week, the state Senate began changing the contract terms for renewable energy qualifying facilities, or QFs.

In Montana, regulated utilities are required to buy power from QFs in order to promote renewable energy development. The Montana Public Service Commission approves the price for which the power is bought, the length of the contract, and a project size under which utilities like NorthWestern Energy must offer a contract with terms set by the state.

The state is compelled to promote renewable energy by a 48-year-old federal law, the Public Utilities Regulatory Policies Act, or PURPA.

PURPA hasn’t fared well in Montana in the last year. In June 2016, the PSC illegally suspended PURPA at the request of NorthWestern Energy after the utility asserted that it was being inundated with small solar energy projects, roughly 100 of them, attracted to Montana by excessively favorable QF prices and contracts, which were 25 years long.

The Federal government in December ruled that Montana was wrong to abandon PURPA. The PSC is now trying to set a less favorable price for renewables, one that won’t attract so many projects.

The Legislature is now changing the rules for QF contracts, limiting the length to no more than 20 years and setting no minimum contract lengths. Renewable energy companies in general and particularly solar energy companies say that the Legislature, by not setting a minimum contract length, is opening the door for contracts that are too short. The banking lobby has testified that it might not finance small renewable energy projects in the future if the Legislature’s changes meant contracts were so short that renewable energy companies couldn’t pay off loans.

Republican Sen. Tom Richmond of Billings is sponsoring Senate Bill 102, which proposes changes to QF contracts. He initially asked that the contract lengths be limited to five years but changed the bill after the banking lobby objected.

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“The banks basically said they needed about 20 years, so that’s why I amended it,” Richmond said.

NorthWestern Energy supports SB 102.

Still, Montana’s largest solar energy project, MT Sun, still qualifies for some of the renewable energy terms offered to QFs. Developers say they’re concerned about the contract changes proposed in SB 102.

Trina Wolf, of MT Sun, said the solar farm should be an economic driver for Billings that is worth offering favorable terms.

The project, expected to be operational by the end of 2018, will cost $90 million to $110 million and employ 190 people during its construction. The property taxes in 2019 are expected to be $1.2 million to $1.6 million. The state will receive $240,000 of those taxes, with Yellowstone County getting the rest.

The electricity taxes on the property are about $32,000 a year.

The solar farm is located roughly 4.6 miles northwest of the Billings airport near a power substation that used to service the Corette coal-fired power plant in Billings. Corette was torn down in 2015.

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Agriculture and Politics Reporter

Politics and agriculture reporter for The Billings Gazette.