Gov. Brian Schweitzer on Friday vetoed three bills - one to provide a capital-gains tax credits as an incentive for businesses and two bills to deal with renewable energy.

At the center of conflicts over the bill stands an esoteric commodity known as a renewable energy credit. These certificates - often called RECs or 'wrecks' - are granted to developers for each megawatt hour of clean power generated. ...the utility has argued the measure is only intended to address what is essentially a double requirement for renewable purchases that results in higher bills for its customers.

What may be the most significant environmental-policy/energy bills of the session face a crucial vote today in the Montana House - a vote that could go a long way toward getting the bills through the Legislature. The bills sponsored by Rep. Llew Jones, R-Conrad, would restrict how citizens and citizen groups can appeal permits for energy projects such as power plants and transmission lines.

In the minds of the public, Montana is awash in wind power projects - but a group of small power producers say it's not so and are pushing legislation they say will help make perception become reality. ...The utility, however, is opposing the measure, saying power from the small projects is too costly. "What they're trying to do is tilt the balance, so we have to take more of (their) power, which is ultimately harmful to consumers," said John Fitzpatrick, NorthWestern's executive director of government affairs in Helena.

Wind-powered electricity has great potential in Montana, but its future is clouded by an outdated transmission system that makes it tough to get the power to market. That was a key message experts delivered Friday at Carroll College during a conference on the state's energy future. Some in attendance urged lawmakers not to forget about the state's coal resources - or to get too excited about creating an energy economy.

Potential wind-farm development was the overriding reason why the state Department of Environmental Quality approved the proposed high-voltage power line that would tread its way across eastern Teton County between Great Falls and Lethbridge, Alta. Montana Alberta Tie Ltd., or MATL, with offices in Calgary, Alta., submitted an application under DEQ's Major Facility Siting Act program on Dec. 1, 2005, providing a variety of reasons why its proposed privately-owned, 230-kilovolt transmission line would benefit the region. ... Aggrieved parties who believe they are adversely affected by DEQ's decision have 30 days to appeal.

The state of Montana has given the green light to a high-voltage transmission line that could trigger millions in green energy production in northcentral Montana. The 600 megawatts of north-south capacity on the Montana Alberta Tie Line has been sold to NaturEner, Invenergy and Wind Hunter. ...Construction won't begin for six months because it will take that long to manufacture the steel poles, which are 90 feet tall and 3 feet in diameter, van't Hof said. Part of the line will also have wooden H-frame poles.

Financing prospects for large-scale energy projects in Montana have dimmed with the crisis on Wall Street, but some that already are under way should proceed as planned, state officials and developers said. ...Gov. Brian Schweitzer told The Associated Press in a recent interview that several companies assured him their projects will not be derailed by the downturn. Still, he cautioned that the recent heady pace of development could end if the economic outlook remains grim and banks stay reluctant — or unable — to make large loans.

Aside from agreeing that Montanans deserve affordable energy, local candidates for the state Public Service Commission disagreed about everything else during a Billings debate Wednesday. Incumbent Brad Molnar, R-Laurel, and challenger Ron Tussing, D-Billings, debated the merits of wind energy ...Wind power is intermittent; it comes and goes with the blowing wind. When the wind dies down, utilities have to have a backup source of energy available, the commissioner said. Molnar said the backup energy has to be bought on the spot market, where rates are most expensive.

The current production tax credit provides a 10-year, 2.1 cent-per-kilowatt-hour tax write-off. But the report argues a key difficulty facing prospective community wind developers is their lack of a large enough tax liability to take full advantage of the federal tax incentives, which makes it financially difficult to complete projects. Larger wind developers, meanwhile, used the tax break to shatter an industry record in 2007 by installing 5,244 megawatts of wind generation nationwide.

NorthWestern Energy said it is seeking permits for a natural-gas-fired power plant near Anaconda, Mont., and hopes to start building the plant next year. ...The $206 million plant would be used to stabilize the electric grid and allow NorthWestern to take more wind power onto the system, company officials said. ...PSC Commissioner Ken Toole welcomed the permit application. He said such a plant could allow for the production of more wind power plants, which require so-called "firming" power to fill in the gaps when winds are not blowing.

The Alberta Utilities Commission's approval Tuesday of the proposed Montana Alberta Tie Ltd. line was the final Canadian permit needed for the 240-kV AC line, which would interconnect electricity markets and carry 300 MW north and south. The commission said the proposed line satisfied its conditions, including a process for negotiating disputes with landowners. ...Wind farm developers in Alberta and Montana have fully subscribed the line for marketing power both north and south.

Developers of small wind-power projects in Montana have their eyes on the Public Service Commission this week, as it may decide a crucial price issue affecting their ability to succeed. NorthWestern Energy, the state's dominant electric utility and the primary purchaser of wind power in Montana, wants to charge small wind farms for the cost of "integrating" their power into the NorthWestern system, which serves 320,000 customers. The utility says if wind-power developers don't pay that cost, then NorthWestern consumers end up absorbing it. "To have a cost shifted to ratepayers, I don't think is in their best interest," says John Hines, chief supply officer for NorthWestern.

A public hearing on what would be the first merchant transmission line between Canada and the United States drew 100 residents to Great Falls on Tuesday, with economic development officials and elected officials singing its praises and farmers raising concerns. ...For the state to approve the project, the DEQ's Tom Ring said it must find that the line has a minimal impact on the environment and is consistent with regional plans for expansion of the electric grid, while serving the public's interest. The state has only denied one transmission project in the past. Como said MATL would be the first merchant line between Canada and the United States. There is one small line connecting Mexico and the U.S. Traditionally, transmission was constructed by regulated utilities, such as the old Montana Power Co. In the case of a merchant line, a company builds the transmission, and separate power generator entities pay to use it.

A Texas company with Portuguese backing is working with state natural resource officials in central Montana to develop a 300-megawatt wind farm - twice the size of the state's largest existing wind project. Horizon Wind Energy would erect up to 100 turbines near Martinsdale, about 80 miles east of Helena, to tap into winds sweeping through the Musselshell River valley. Horizon had been solicited to develop in the area by the state Department of Natural Resources and Conservation. The agency owns about 2,400 acres of school trust land within the 19,000 acre project site. ...Gene Leary, 67, owns a ranch within a few miles of the proposed wind farm site. He described wind farms as "visual pollution" and said he worries such projects could mar central Montana's scenic vistas, driving down property values and discouraging tourism.

The project, known as the Montana Alberta Tie Line, has secured financing and Canadian regulatory approval, said Johan van't Hof. But the chief executive of the project's parent company said federal and state approval in Montana has been delayed. ...The Montana Alberta Tie Line wants to receive its permits so that wind farms can be built in time to get federal tax credits that expire at the end of the year, van't Hof said. ...Environmentalists have been critical, worrying it could be used to transport electricity from greenhouse gas-producing coal plants.

John Hines, director of energy supply planning for NorthWestern, says before the company buys more wind, it wants to be sure it has the right mix of power to offset gaps when the wind doesn't blow. Right now, it's expensive and difficult to buy "firming power," which is needed to complement intermittent wind power - especially when NorthWestern has no power-generating plants of its own, Hines says.

A panel chaired by U.S. Sen. Max Baucus on Tuesday approved an energy-tax package designed to boost alternative energy production and conservation - partially at the expense of big oil-and-gas producers. "This is a significant victory in our efforts to become more energy independent," said Baucus, D-Mont., who chairs the Senate Finance Committee. "We have more to do to address climate change, lower gas prices at the pump and wean America off of foreign sources of energy." The Finance Committee approved the $28.5 billion, 10-year tax package, which is expected to become part of a larger energy bill before the U.S. Senate this week. The package includes tax credits to encourage production of wind power, solar power, gas-electric hybrid cars, biodiesel fuel and "cellulosic" ethanol, which is produced from agricultural waste products.

Big property-tax breaks for developers that construct clean coal-fired power plants and transmission lines carrying "clean and green" energy were approved by Montana lawmakers on the final day of the special session. "This is a classic jobs and environment bill," said Evan Barrett, chief business officer in the governor's office of economic development.

The Montana Legislature last week tabled an opportunity for the state's farmers and ranchers to profit from wind. By voting at the last minute to table Senate Bill 337, a bill that would have allowed Green Electricity Buying Cooperative to use $31.7 million in bonding authority to build 40 windmills on 40 farms across Montana, Montana legislators put on hold the wind company's plans to put together a bid for clean energy bonds and incorporate 40 ranches or farms involved in producing wind energy across the state.