Solar farm

Survey markers are visible near a fence along Alkali Creek Road at the site of the proposed MTSUN solar farm northwest of Billings.

A 480-acre solar farm planned for Billings has won a significant legal battle over energy contract lengths.

MTSUN solar farm will receive a 25-year contract to deliver power to NorthWestern Energy, District Judge James Manley ruled. The project, planned for the Alkali Creek area west of the Billings Heights, has been on hold for two years as solar developers large and small sued Montana’s Public Service Commission and NorthWestern.

The small developers won their case earlier this year, but the order on MTSUN took a few more months. Manley set the per megawatt price at $38.33 including fees.

NorthWestern intends to appeal Manley’s ruling, said Ann Hill, the utility’s attorney. The utility earlier filed an appeal notice concerning the order for small solar projects, as well. Hill emphasized that it was the actions of the Montana Public Service Commission that sparked the lawsuit.

MTSUN developer Mark Klein said he was glad to have the ruling after two years of lawsuits.

“Two years ago, I said we were going to build this project,” Klein said. “And we’re going to build this project.”

The news had been trending favorably for Montana solar energy development and particularly for MTSUN in recent months. In May, Klein reached an agreement with NorthWestern for a second Billings solar development, the 150-acre Meadow Lark Solar Project, which is within walking distance of the 480-acre MTSUN development.

Klein is also developing two renewable energy projects near Broadview that combine wind and solar energy generation with battery storage. That project was on track to come online by 2022, which was when Puget Sound Energy expected to begin replacing electricity from Colstrip Power Plant as its oldest units were shut down. The closure of the units frees up needed capacity on the transmission lines connecting Montana to the Pacific Northwest.

But earlier this month, Puget and Talen Energy announced plans to shutter Colstrip Units 1 and 2 by year’s end. Talen said the units were no longer economical and needed cheaper coal. As a result, Puget is now looking for renewable projects that can be launched earlier than 2022. Klein is working to oblige the Washington utility.

“The court ruling will certainly help, but the announcement of the closure of Colstrip 1 and 2, because of coal supply issues, two and a half years early, I think is by far a much bigger issue than anything else,” Klein said.

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Conditions for the solar projects were much less favorable in 2016 when Klein rolled out MTSUN. He planned to use a 40-year-old federal law intended to promote development of alternative energy resources. The Public Utility Regulatory Policies Act, or PURPA, required states to set a price and contract lengths to promote alternative energy resources. Utilities were expected to accept those terms.

NorthWestern objected to Klein’s price, which by law was based on what it would cost NorthWestern for the energy and capacity. The utility argued the Klein’s price was too high. It also argued that the energy from the solar project wasn’t available when NorthWestern needed it most. Solar energy was available when there was ample power to be had, and was therefore worth less. The utility continues to make the same argument today about solar projects in general.

At 480-acres, MTSUN’s 80-megawatt development along Alkali Creek Road would be the largest solar farm in the state, generating enough electricity to power about 14,400 homes. 

The Public Service Commission shortened the state’s previously-set contract length from 25 years to 15 in 2017. The contract length, and price of $20 per megawatt hour, were unworkable. Klein sued.