Bi-Partisan Effort for Alternative Energy Killed, Lawmakers Cave to NorthWestern Energy
BY PAT HILL
In what many people view as a blow to the emerging alternative energy movement in Montana, efforts to expand current net metering opportunities failed in the 64th Montana Legislative Session.
Net metering is a method by which solar and other alternative energy system owners are credited for the electricity they add to the grid. For example, if a residential customer has a solar array on his rooftop, it may generate more electricity than the home uses during daylight hours. Your electric meter keeps track of this “net” difference as you both generate electricity and take electricity from the electric grid.
Net metering has a populist appeal that crosses political lines. The Solar Energy Industries Association, in a 2012 survey, found that 92 percent of Americans think their nation should develop and use more solar energy. Net metering began in Montana in 1999, as part of an overall move (which happened to be sweeping the nation at the time) to deregulate the electricity industry. In Montana, NorthWestern Energy (NWE) is one of two entities mandated by state law to provide net metering services, and NWE in fact works with the vast majority of net metering systems already up and running in Big Sky Country. NWE currently has approximately 1,300 net meters operating on their grid.
Net metering standards have not been changed in Montana since the program’s inception in 1999. Efforts to expand net metering were shot down during the state’s last legislative session. Though Montana legislators were presented with several bills just recently in the 2015 session that related to net metering, all those efforts came to naught. Demonstrating that the renewable energy issue really does have appeal across party lines, two Bozeman legislators from opposing parties sponsored much of that legislation.
Senate Bill 182, sponsored by Sen. Mike Phillips (D-Bozeman), would have allowed individuals and businesses to invest in a large, shared renewable energy system not necessarily located on their own property. Represented as similar to the current net metering arrangement, this bill would have allowed anyone to get credit on their energy bill for the proportion or share of the energy system that they owned. It also would have increased access to solar energy for renters, for people whose properties were not ideal because of shaded rooftops or otherwise, and for people who could not afford the upfront cost of a full installation. Phillips’ bill was tabled and effectively killed by the Senate Energy and Telecommunications Committee on Jan. 29. A somewhat similar Senate bill (SB 134), sponsored by Sen. Jennifer Fielder (R-Thompson Falls), would have allowed for aggregate net metering. Under current law, each renewable energy system has to have its own separate meter. Fielder’s bill would have allowed entities like farms, universities, or apartment buildings and other multi-unit housing to apply net metering credits from one renewable energy system to all their electric meters. That bill was also killed in committee on Jan. 29.
Rep. Art Wittich (R-Bozeman) sponsored three pieces of net metering-related legislation that also died in committee. House Bill 188 would have allowed net metering customers to roll over their net metering credits for two years. Under current law, extra credits are forfeited to NWE at the end of a year. House Bill 192 would have increased the current cap on net-metered systems from 50 kilowatts to one megawatt, which would have primarily benefited businesses, universities, and other public and commercial property owners that have higher energy use to potentially offset with a higher cap. Both bills were tabled and effectively killed by the House Federal Relations, Energy, and Telecommunications Committee on Feb. 2.
Wittich made an attempt at compromise legislation a few weeks later with House Bill 485, which would have increased the net metering cap from 50 kilowatts to 150 kilowatts (instead of the originally-proposed 1 megawatt). Borrowing from Sen. Fields’ tabled Senate Bill 134, Wittich’s compromise bill also would have allowed for aggregate net metering for customers with multiple electrical meters on their own property.
In an effort to address some of the points made by the entity most opposed to the net metering changes, NorthWestern Energy, House Bill 485 also would have immediately triggered a Public Service Commission cost of service study to analyze the costs and benefits of net metering and determine whether a separate rate class is necessary for net-metered customers.
“I hope it gets out of committee,” Wittich told the Pioneer in February. “[The compromise bill] addresses all the concerns the power company had.” Nevertheless, House Bill 485 was tabled and effectively killed in committee the next day. Wittich had anticipated this action, and told the Pioneer on Feb. 17 that if the bill died in committee, he intended to try to breathe life back into it by blasting it out of committee, a move requiring 60 votes. But Wittich said on Feb. 23 that no attempt would be made to blast the bill back to life.
“It’s too steep a hill,” he told the Pioneer. “We just don’t have the votes.” Wittich said that the death of his compromise net metering bill also spells the end to any attempts to modify the Treasure State’s current net metering laws this legislative session.
The scenario for this “showdown,” between two Bozeman legislators from different parties proposing changes to the current net metering laws, and NorthWestern Energy, was really spelled out before the session even got underway. In a guest editorial published by the Montana Standard on Nov. 14, Phillips and Wittich teamed up in a bipartisan show of support regarding increasing Montana’s current cap on net metering. They put forward the view that net metering “empowers individuals to invest their own dollars in clean energy without a government mandate…assuming the risks and reaping the benefits.”
On Nov. 19, NorthWestern Energy’s vice president of Energy Supply, John Hines, responded to the Bozeman legislators with an editorial of his own in the Standard. Hines countered that changes to the net metering system in place would essentially result in an increase in energy costs.
“Of the approximately 1,300 net meters on our system, approximately 1,100 received grants to offset their costs,” wrote Hines. “These grants were paid for by customers through an ongoing special charge on your bill for what is called the Universal System Benefit (USB) fund. This subsidy is manageable in a small-scale pilot program. On a larger scale, including by increasing the size of each project, it’s a big problem for other customers.” Hines also said in that Nov. 19 editorial that NWE’s transmission and distribution system has fixed costs which, although they don’t increase or decrease much, are paid for based on consumption.
“It’s not less expensive to provide the infrastructure to serve a net-metered customer, but those costs get shifted to other customers instead,” Hines wrote. “Under the current law, net-metered customers reap the benefits while other customers have to pay extra every month: Once through the grant and again through the rate structure that allows net metered customers to avoid paying for services they are, in fact, still using. Do not be fooled, net metering customers are not ‘off the grid’ as some imply.”
Hines also wrote in that Nov. 19 editorial that “In this upcoming legislative session, NorthWestern will be working to improve the net metering model to ensure that new net metering customers pay their fair share of the costs of services, things such as the wires and poles, and property taxes that the state collects through utility bills, and billing and payment systems. Those are costs that the rest of our customers are paying. Having the larger group of customers subsidize a smaller group of customers is not sustainable and it is not fair over the long term.” And true to his word, NorthWestern Energy was there as the 2015 Montana Legislature met to discuss net metering.
“NorthWestern Energy came in and strongly opposed these [net metering] bills,” Wittich said. “It was a full-out lobbying effort. It’s really unfortunate. We are looking into the rear-view mirror [regarding alternative energy in Montana], instead of looking forward through the windshield.” Wittich blames corporate political power in part. He said he thinks NorthWestern Energy has too much influence in Montana’s affairs, and likened the situation to the 20th century, when the Anaconda Company held sway over the state.
“But now, instead of a copper collar around our neck, it’s a copper wire leash,” Wittich said. But though the issue of net metering may be done with this time around, advocates for alternative energy already have their sights set on the next legislative session in the Treasure State.
Editor’s note: The issue lawmakers opposing expanded net metering seem to avoid is that they in effect sanction a monopoly to produce energy while you and I may not do so to any significant degree. Granted, NWE owns and maintains the grid (and in effect partners with government). So, let those who would produce solar and wind energy from their homes and businesses, and as businesses, therefore pay a toll for use of the grid that compensates NWE (as opposed to customers being forced to pay for grants), and let an unbridled incentive to produce alter-native energy stimulate innovation and entrepreneurialism in the energy industry instead of Montanans being subjected to a monopoly standing in the way of our energy future. Let, then, every Montanan be incentivized to become an energy producer, and even to potentially profit from doing so, instead of NWE colluding with government to prevent the proliferation of clean energy.