Recently, The Billings Gazette carried a guest view from Brad Van Vert. Van Vert claimed that NorthWestern Energy killed the Local Energy Investment Act, a package of bills designed to increase the scope of net metering in Montana. According to the proponents of that legislation, NorthWestern “denied their customers new tools to control energy costs.”
The truth is exactly the opposite of their claims. NorthWestern’s actions saved its customers’ money.
NorthWestern opposes expansion of subsidized net metering. Virtually all of the net meters in Montana are on NorthWestern’s system. We train and certify solar installers. We’re interested in solar and other new technologies. But we want to get net metering policies right before the program grows. The authors want to expand the subsidy and shift the cost to other customers.
The proponents of the Local Energy Investment Act all came to the Capitol with the same message – expand net metering and we can prosper. They didn’t tell the Legislature how much it would cost or how it would affect electricity customers. They talked a lot about job creation, but investment in alternative energy has created very few jobs in Montana. Ten years ago, the same types of folks appeared before the Legislature promising an economic bonanza if the state would just adopt the Renewable Portfolio Standard Act. Last year, the Legislature evaluated the success of the RPS and concluded that it had created about 27 full-time jobs and 482 short-term construction positions lasting six to eight weeks.
Net metered power from solar panels and small-wind generators is the most expensive source of electricity that NorthWestern purchases and which you, the customer, pay for. Net metered power costs $108 per megawatt hour (MWH), or $41 per MWH more than the current energy supply rate on NorthWestern’s system.
Net metered power is very expensive to produce, and supported by a web of taxpayer and customer subsidies. At a recent hearing, one of the proponents of an expansion of net metering said that it had reduced customers’ bills by $1 million since 1999, but he didn’t bother to mention that the total cost of net metering power during that same period ranged somewhere between $17 million and $29 million. That makes no economic sense and, sadly, you – the utility customers and taxpayers – are paying the tab for a flawed government policy.
If people want to install solar panels on their roofs, they have the right to do so. The problem occurs when they stay connected to the utility, are paid too much for the power they put on the system, and don’t pay the cost of the service they receive (including property taxes and Universal System Benefit charges).
NorthWestern recently purchased 11 hydroelectric dams that will produce power for decades and decades at about $55/MWH. If we had been required to pay the net metered price, PPL would have received a check for $2.9 billion, not $900 million. The carbon intensity of our Montana electric portfolio declined 41 percent and more than half our Montana generation is now from water or wind. Those dams produce electricity around the clock, not 15 percent of the time as is the case with solar panels. This is the smart, cost-effective way to meet customer needs in an environmentally responsible way. So, yes, we will oppose legislation that would cause you to pay double for your electricity.
Fitzpatrick is the executive director for government affairs for NorthWestern Energy. He is based in Helena.