Renewable energy’s losing streak in Montana continued Tuesday, as state regulators set power rates too low for a Big Timber wind farm to be built, developers said.
Wind farm developer Greycliff Wind Prime told The Gazette the Montana company’s proposed 25-megawatt wind project east of Big Timber was likely dead following Tuesday’s rate action by the Public Service Commission.
The PSC set the price Greycliff could charge NorthWestern Energy at $45.49 per megawatt hour, about 16 percent lower than the price needed to make the wind farm profitable. Greycliff was first proposed seven years ago.
“It’s not a rate that works. It’s also not a rate that’s realistic,” said Steve Tyrell, a Greycliff stakeholder.
Greycliff needed a price in the mid-$50s, which would have been similar to the wind energy rate for Spion Kop Wind Project, a NorthWestern renewable energy source.
No wind project has been built in the past 10 years at the price set by the PSC, said Ryno Stinchfield, a Greycliff Wind developer.
Renewable energy projects are on a two-month losing streak with the Montana Public Service Commission. In June, Montana’s Public Service Commission pulled the plug on guaranteed rates for small solar projects at the request of NorthWestern Energy.
Montana’s largest regulated utility, NorthWestern argued that Montana’s pre-set rates for small renewable energy prices were too pricey for NorthWestern customers. NorthWestern had received 97 solar hookup requests since January 2015. The PSC decision cut the number of viable solar farms to fewer than 10.
An unwilling buyer and a state regulator concerned about renewable energy prices have hobbled Montana wind and solar projects, despite a 38-year-old federal mandate that requires states to promote alternative energy.
States are required to set a price and contract lengths to promote alternative energy resources under the Public Utility Regulatory Policies Act, or PURPA. But the PSC and NorthWestern are balking at the mandate.
NorthWestern says it already has enough energy to satisfy its customers and shouldn’t be forced to accept more power. It’s also balked at the mandated rate for solar energy, though the price is close to the $60 per megawatt hour customers pay for power from NorthWestern’s hydroelectric dams. The utility had suggested a $35.65 megawatt hour price for Greycliff Wind energy.
The problem is PURPA, said Roger Koopman, public service commissioner from Bozeman.
“We’re trying to make order out of chaos when it comes to implementation of PURPA,” Koopman said. “We’re trying to make sense of a policy that makes no sense, in my opinion.”
The Greycliff Wind project is in the southwest Montana region Koopman represents.