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Solar power advocates are crying foul on NorthWestern Energy's plans to charge higher rates to net-metered customers.

The Montana Renewable Energy Association and Vote Solar are disputing NorthWestern plans to impose a demand charge on customers who also generate power, frequently selling their excess to the monopoly utility. Roughly 2,100 NorthWestern customers rely on solar panels to do so.

The charge would guarantee NorthWestern stronger revenue from net-metered customers even if the customers drew power for a few hours a month. Demand charges involve billing customers at a substantially higher rate for their biggest hour of consumption. The remainder of the month is billed at a normal amount.

The utility has argued that it overpays for power generated by net-metered customers. The subject is a small part of larger general rate case in which NorthWestern is asking to generally charge customers more for electricity and natural gas. It would like Montana’s Public Service Commission to approve a 3.35 percent rate increase for electricity customers. The natural gas increase would be less than a tenth of a percent.

Henry Dykema suspects the charge is intended to penalize customers for using less NorthWestern energy, making sure that some of what is bought is priced higher. A solar panel contractor, Dykema expects that added cost will add a decade or more to the years it takes for the home solar project to pay for itself.

“If they do this, then their customers are going to start getting a demand charge, and now you’re back to taking 26 to 30 years to recover their costs,” said Dykema of Sundance Solar.

As recently as 10 years ago, the only people who were adding solar panels to their home were those who did so out of conviction to promote renewable energy, said Brad Van Wert. His company, Harvest Solar, has seen a surge in business in recent years as the price of solar panels has declined significantly. A home solar array might pay for itself in 10 or 15 years because of lower utility bills.

“It’s certainly going to change the dynamics,” Van Wert said. Demand charges aren’t something homeowners currently pay. The charge is more associated with certain businesses. The first time a homeowner with net metering receives a bill for a charge based on their highest 15 minutes of energy consumption for the month, no one is going to understand what the charge is for, Van Wert said.

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“NorthWestern might as well be handing their customers a bill written in Sanskrit, because no one is going to understand it,” Van Wert said.

NorthWestern contends that it’s overcompensating customers who net meter now and that means the rest of its customers are disadvantaged. Last year, the utility commissioned a 40-page study of net metering, which concluded that the utility was paying three times too much for electricity generated by customers with rooftop solar panels.

“NorthWestern’s net metering proposal, as part of our current rate review, distributes related costs and benefits more equitably between residential net metering customers and those customers who don’t net meter,” said NorthWestern Energy spokesperson Brandy Powers.

The 2017 Montana Legislature ordered the study to find out whether the costs of accommodating net-meterers were being unfairly distributed to other customers.

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Agriculture and Politics Reporter

Politics and agriculture reporter for The Billings Gazette.