New rules will require big wind farm owners to post bonds with the state of Montana to ensure decommissioning including the removal of giant towers.
Draft decommissioning rules were published Thursday by the state Department of Environmental Quality detailing the process and requirements.
Public comment is being accepted.
“It’s the old story, they’re great now but 15 years from now maybe there’s going to be a whole change in who owns the things,” said Rep. Jim Keane, D-Butte.
A post-construction study is under way at the Spion Kop wind farm.
Keane was the sponsor of House Bill 216, passed by the 2017 Legislature, requiring bonding of large wind farms.
Bonding will protect taxpayers from bearing the cost of decommissioning if a wind farm owner goes belly-up and walks away from a 200-tower project, he said.
"Who's going to pay to clean that up?" Keane said. "It is going to be the state? Well, we don't want that."
He remembers the state's first wind farms built around Livingston decades ago turned into eyesores with blades hanging off the turbines.
Kyla Maki, a DEQ energy resource professional, said the rules would affect wind farms that produce at least 25 megawatts.
Currently six wind farms — Rim Rock, Glacier, Spion Kop, Judith Gap, Greenfield and Diamond Willow — meet that threshold.
“The agency will use our current expertise in calculating bonding amount to make sure it’s accurate,” Maki said.
Bond amounts will be based on decommissioning plans that wind facilities will be required to provide to the DEQ by July 1, she said.
A decommissioning plan must include a commitment to remove all above-ground wind turbines and towers.
The rules will become effective Jan. 1.
It’s the first time power generators of any kind in Montana have been required to post a bond to ensure proper decommissioning, according to the DEQ.
"Coal plants don't need to post decommissioning bonds," said Jeff Fox, Montana Policy director for Renewable Northwest, which advocates for renewable energy and works with large renewable energy developers. "Gas plants don't need to post decommissioning bonds."
The group doesn't oppose the bonding requirement.
“It’s just good planning on behalf of the state," Fox said.
Typically, decommission agreements already are in place between wind farm owners and landowners anyway, Fox said.
Decommissioning requirements would be triggered when a wind farm is abandoned, meaning it's operating at 10 percent or less of its capacity for a year, according to the draft rules.
The DEQ has determined that most facilities can be decommissioned within two years.
The state will take into account the salvage value of the steel and other infrastructure in determining the bond amount, Maki said.
“At the end of the day, we would think it’s not a huge new cost, but it’s just one that will ensure landowners are treated fairly,” said Dan Lloyd, renewable energy and energy planning supervisor for the DEQ.
Wind farm developers already have these costs built into their cost of doing business so it should not deter wind farm development, Lloyd said.
Owners of wind farms would be required to be bonded within 15 years from their start of the operation.
For wind farms that began operation prior to Jan. 1, 2007, owners would need to post a bond within 16 years.
Under that timetable, the 135-megawatt Judith Gap, the state’s first large wind farm, would have to post a bond in 2022. It began operations in 2006.
The wind industry is relatively new in Montana, said Laura Andersen, the DEQ’s Energy Bureau chief.
That makes calculating bond amounts challenging because a decommissioning hasn't occurred,
“The cost to decommission various facilities is going to vary really greatly and it’s really going to depend on landowners and companies,” Anderson said.
Bond amounts also will be affected by individual decommissioning plans between landowners and wind farm owners. Some of those agreements allow landowners to keep some of the infrastructure.
Wind farms typically have a lifespan of 25 years, Maki said.
However, operation can be extended with upgrades.
For wind farms sited entirely on private land, some components can remain in place, depending on agreement between the wind farm owner and the landowner, Maki said.
Towers, however, must be removed even if they are located entirely on private land, Maki said.
Oklahoma, Oregon and North Dakota have adopted statewide wind farm decommissioning rules, but mostly it’s been local governments passing regulations, Maki said.
“It’s a fairly new concept and new industry, but there are some examples,” Maki said.