In the People's Interest

Rio W. Roland: Moving Montana’s Energy Policy Forward

Wind Energy Farm; BLM image

Tackling climate change is one of humanity’s greatest challenges. Montana’s Republican politicians do not acknowledge this reality. They are glib and smug about technologies that reduce the carbon footprint of energy production, and they suggest the future can only be achieved through traditional carbon-intensive fuels. Montana has a vast wealth of renewable energy and storage capacity, from which we can profit handsomely. We can become an energy exporter–supporting markets that lack the renewable resources we have.

Questionable management decisions

In Fall 2023, the Public Service Commission (PSC), which oversees Northwestern energy and is controlled by Republicans, approved a Northwestern Energy request for a 24% increase for electricity to residential consumers and small businesses (i.e., about $300/year increase for a user of 750 kWh/month). Also in 2023, the State Legislature failed to address residential property tax increases, while giving industrial customers a property tax reduction; Northwestern Energy received about $36M in property tax relief. The PSC dictated this relief also be passed to consumers, but average residential savings (about $136/year for electricity and gas customers) do not compare to the increase in property taxes (i.e., $580-1,266 per year) for Gallatin County homeowners. These energy and property tax increases have created a double whammy for hard working Montanans.

Northwestern Energy is now petitioning the PSC to increase natural gas rates by 10%, a result of the company’s effort to hedge natural gas price volatility by buying long-term gas contracts. Their strategy backfired, and Northwestern Energy wants to be compensated by increasing our rates.

We need stable energy prices and its delivery must be reliable

What we know about renewable energy:

  • The costs to produce renewable energy are fixed. We know exactly what it will cost to produce a kWh of wind or solar energy over a project’s 30-year lifetime. Global fuel restrictions and political unrest do not impact renewables like they do oil and gas. Furthermore, this energy independence comes with none of the unpleasant effects on air or water quality or climate.
  • The cost to produce energy from renewables is fixed and cheaper than all carbon-based fuels.  When renewables increase their share in an energy market, consumer prices fall.
  • Energy storage technology and better transmission integration would make Montana’s energy reliability on par with what can be provided by natural gas “peaker” plants like the one now being constructed in Yellowstone County (in Laurel). Current energy storage technology releases electricity for four to six hours, and the technology advances by the day.
  • Given Montana’s wind and solar resources, it is underdeveloped relative to its potential. It ranks 30th in operating wind, solar, and energy storage capacity and 21st in share of electricity generated from renewables (17.6%). About $3B has been invested in Montana wind, solar and storage projects; $10.4M went to farmers, ranchers, and private landowners in 2022, while these projects generated $10.8M in state and local property taxes.
  • Renewable energy projects provide local jobs and a property-tax base for the communities in which they’re built, and this is vital to rural communities. A recent study found Texas windfarms create $1,000-1,800 in tax revenue per child in local school districts. Considering these figures, it’s clear that increasing renewable generation creates a significant and needed tax base for the rural communities where many of these projects are sited.

It’s a vision thing

In Fall 2023, Northwestern Energy released its Integrated Resource Plan (IRP), a blueprint for the next 20 years of operation. While Northwestern Energy has a net-zero policy set for 2050, there exists no plan within the IRP to decrease reliance on fossil fuels. In fact, Northwestern Energy increases carbon-based energy production throughout the next 20 years, including the purchase of generating capacity from Colstrip–making it the only utility in the USA to increase coal-energy production. With the Yellowstone Natural Gas Plant, no planned battery storage facilities, and only one pumped hydro project in the works–it’s hard to understand how net-zero can be achieved when the short-term is filled with carbon-emitting projects. And consumers will continue to suffer from fuel price volatility and increased greenhouse gas effects from these projects. We must diversify and switch to fixed-price sources or Northwestern Energy will be in front of the PSC every year asking for rate increases.

Montana is rich in wind and solar potential, and we can capitalize on this by building more regional transmission. In Wyoming, the Trans-West Transmission Project has generated and transported thousands of MWs in wind energy from the Laramie Basin to Salt Lake City, Las Vegas, and Southern California, creating hundreds of permanent, well-paying jobs and millions in tax revenue. Montana could follow this model, selling to Seattle, Salt Lake, Portland, and Denver markets, creating Montana jobs and tax revenues.

To tap into this wealth of revenue and jobs, we must legislate state-level, forward-thinking energy policy–not roll it back. In 2021, Montana repealed its renewable portfolio standard, and in 2023, the legislature banned greenhouse gas analysis in permitting. The PSC and our state utilities should be considering greenhouse gases in project planning and risk analysis, as well as the future economic costs from them.  

Why do we ignore these costs? Anyone with business acumen or knowledge of economic theory understands that the externalities (side effects) from a good or service should be included in their price.  When carbon taxes or trading are realized, and these projects incur their true costs, the Yellowstone Natural Gas Plant will be yet another poor decision by Northwestern Energy–one that will lead to another rate increase, which will be rubber stamped by the PSC, and consumers will pick up the tab.

Currently, utilities can only make profit from large capital projects. If the legislature allowed Northwestern Energy to profit from customer-owned roof-top solar or community renewable energy projects, they would be much more excited to promote them. In tandem, the state could increase the amount of energy customers can sell back to Northwestern Energy from their rooftop solar (e.g., increase the net meter amount). This would be a win-win for consumer and utility. But we need leadership facilitating these big ideas: new and upgraded regional transmission projects, developing regional transmission organizations, hydrogen infrastructure, incentivizing energy storage, and training oil and gas workers for the new energy economy.  

It’s time to enact policies to hasten and facilitate the renewable energy bonanza that abounds in Montana. If we develop our renewable energy potential and export our excess energy, we would offset a large tax burden currently borne by Montana homeowners.

Montana has been subject to the whims of outside interests—suffering the busts as assuredly as the booms. Fossil fuels and an energy economy built around them will be no different. It’s time Montana makes its own boom, so that it is never susceptible to busts from outside interests, ever again.

Rio Roland is a Democratic candidate for House District 62; he is a renewable energy expert and believes in a sustainable future for all Montanans. He volunteers on the Big Sky Passenger Rail Authority, for state and local Democratic candidates, as an Executive Committee member of the Gallatin County Democrats, and as a commissioner on the Bozeman Citizen’s Transportation Advisory Board.