Montana brings PURPA contract lengths back to 15 years for small projects

While there was little objection for most of the past 39 years, utilities and regulators in several states have made moves to weaken implementation of the Public Utilities Regulatory Power Act of 1978 (PURPA), now that it is being used to actually build a significant volume of renewable energy projects.

Among those states is Montana, whose regulators have made moves to stop what they argue is overly generous terms for renewable energy projects, and which in reality may mean that Montana greatly limits solar development and the jobs and price stability that it brings.

Last week Montana’s ornery Public Service Commission (MPSC) showed an indication that even they know they went too far last summer when they neutered PURPA in the territory of Northwestern Energy by reducing contract lengths and rates paid.

In an October 5 decision, MPSC brought contracts for PURPA facilities under 3 MW back to 15 years from 10. The commission declined to make other changes requested by Vote Solar, a local environmental group and solar developers FLS Energy and Cypress Creek Renewables, including a request to increase a capacity payment from a meager 6% and to include a carbon price adder.

The latter is hardly surprising; as a red state many Montana politicians have long been in the Global Warming denial camp, despite the melting of glaciers in Glacier National Park.

The commission did make the unusual step of applying these 15 year contracts available to all ew power plants, regardless of ownership or resource type, and MPSC has stated that this will likely benefit NorthWestern Energy’s plans to acquire or contract with a number of gas-fired power plants.

MPSC states that payments to solar generators under PURPA will be set at $37 per megawatt-hour (MWh) during times of high demand, and $28/MWh during periods of lower demand.