In 2005, the Montana Legislature had the forethought to pass renewable energy portfolio standards that defined renewable energy and required state utilities to have a portion of their energy portfolio derived from these sources.
The legislation started the portfolio requirements at 5 percent, increasing to 15 percent by 2015. Currently, the two largest public utility companies in Montana — NorthWestern Energy and Montana Dakota Utilities already are at or near that 15 percent level.
However, since the legislation passed, legislators have been trying to retroactively add hydroelectric power as eligible for the renewable energy portfolio. This kind of legislation has been proposed in every session since the standards were passed, and it has been introduced again this year.
Most people agree that hydroelectricity is a renewable source of energy, but where the disagreement comes is in how to allow hydro projects into the portfolio. Do you just add all hydroelectric projects, including all the power-generating dams around the state, no matter how old they are? Or do you limit it to only new hydroelectric projects and upgrades?
To us the answer is simple — the renewable energy standards should only apply to new hydroelectric facilities and upgrades. It’s a matter of simple economics.
The biggest benefit of the RES legislation is that it stimulated economic development around the state. It provided certainty for companies looking to invest in wind energy projects because it essentially built a market for the power they produce. Since 2005, Montana has seen more than $1.6 billion of capital investment in renewable energy projects around the state. These include both wind energy and hydroelectric projects. This investment has resulted in about 1,500 construction jobs and the creation of about 650 megawatts of electricity. About two-thirds of this electricity is exported to other states to help meet their renewable energy standards.
The problem with adding existing hydroelectric projects to the RES is that it would flood the market with about 1,000 megawatts of electricity and essentially gut the RES because there would be no need for new renewable energy projects to meet the RES requirements. This would be bad for communities, mostly rural, around the state that have benefitted from the new development of renewable energy projects.
Currently, two pieces of legislation have passed out of the Senate and are working their way through the House that would add hydroelectric projects to the RES. Sen. Debby Barrett, R-Dillon, has sponsored Senate Bill 41, which, as originally written, would add all hydro projects to the RES. However, this bill was amended to only add new projects to the RES.
Similarly, Sen. Jim Keane, D-Butte, has a bill that would accomplish the same as Barrett’s bill, but would retroactively include upgrades at Rainbow Dam on the Missouri River at Great Falls by PPL Montana.
Given that these bills remain in their current form, we can support them. It is important that future hydroelectric projects be included in the RES, not because Montana needs another major dam, or even has room for one, but because there are many opportunities around the state for smaller hydroelectric projects that are truly in the spirit of the original RES legislation.
For instance, in Teton County, NorthWestern Energy has a 20-year contract with Turnbull Hydro to purchase power from two small hydroelectric projects that are essentially turbines on an irrigation canal. These projects produce electricity from early May through September. This is the type of project that could be repeated around the state.
And Montana has vast untapped wind energy potential. In fact, Montana has the smallest wind energy production in the Northwest — less than Oregon, Washington, Idaho, Wyoming and both Dakotas.
The surest way to keep our renewable energy industry growing is by keeping in tact our strong renewable energy standards, and we implore our legislators to resist any attempt to weaken them.