Another renewable energy project has won a lawsuit against Montana’s Public Service Commission.
District Judge Kathy Seeley of Helena threw out most of the commission's work on Caithness Beaver Creek, a $500 million wind and battery storage project located near Rapelje. The judge, in her ruling, said the terms set by the PSC underpaid Caithness for the electricity it’s to sell to NorthWestern Energy, the state’s largest monopoly utility.
It was the third time this year a court has ruled the PSC ignored energy law, and even its own previous decisions, in setting prices for a wind or solar farm.
The Beaver Creek project was to be the first Montana renewable energy development with battery storage, making it possible for the wind farm to deliver energy when the wind isn’t blowing. It’s a common refrain of NorthWestern Energy that it should be allowed to pay less for renewable energy because the electricity is unavailable when the wind doesn’t blow or the sun doesn’t shine.
Batteries were supposed to help Caithness get a better price for its electricity, the company argued, because the power would be available in peak demand times when energy fetches a better rate. Montana’s PSC ruled that the batteries had little influence on the value of what Caithness was selling.
“The Commission could only reach this conclusion if it unreasonably ignored substantial record evidence,” Seeley ruled, ordering the Commission to take up the issue again, this time giving batteries their due.
Caithness said this week the project would go forward, despite PSC regulatory delays and the cost of a lawsuit.
“The project is very much viable. We’re very interested in it. We have the land under lease. We have the interconnect we’ve spent millions of dollars on and we would very much like to go forward,” said Ross Ain, Caithness Energy L.L.C president.
Caithness Energy is a New York company with transmission and generation projects as far west as Nevada and California. Its work includes 13 natural gas power plants, two solar farms, two hydroelectric projects, a wind farm and two geothermal power plants.
The Beaver Creek project would be the company’s first battery-wind hybrid. The company’s foothold in Montana was a 42-year-old federal law guaranteeing contracts for alternative energy projects of a limited size. The federal Public Utility Regulatory Policies Act, or PURPA, guarantees projects like Beaver Creek a contract with a monopoly utility and the right to a negotiated price based on the utility’s avoided cost, which is to say the utility’s cost of either producing the energy itself including expenses for maintenance and operation, or buying it from another source.
It is the Public Service Commission’s handling of PURPA law that keeps getting the commission sued. In the Caithness case, Seeley noted that PURPA required the commission to weigh the needs of utility customers without discriminating against Caithness, which the PSC didn’t do.
For its part, the commission expressed excitement when issuing its first order for Beaver Creek. Roger Koopman, the commissioner representing the area where Beaver Creek would be located, called it the most important decision the commission had made. But in the end, the PSC’s break from the previous rate-setting practices resulted in the lawsuit against it and NorthWestern.
Earlier this year, the Montana Supreme Court twice ruled against the PSC and NorthWestern Energy in a case involving a Billings solar farm and several small solar projects, all of which were qualifying facilities under PURPA.
A lower court had concluded commissioners showed prejudice against renewable energy developments based on editorials that commissioners wrote and comments made while working on renewable energy policy.
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