MTPR

Net Metering Bills Get First Hearing

Jan 10, 2017

As more solar panels go up on homes and businesses across the state, lawmakers in Helena are debating the economic incentives for doing so. Buying solar panels isn’t cheap, and it’s an investment that Norman Mullen, who lives in Helena, hopes new legislation can protect.

"I have installed a solar electric system on my house. The system and the reconstruction of my deck, walls and roof, and the solar electric system cost close to $20,000 about 9 years ago," Mullen said.

He told lawmakers that he made that investment based on how much electricity his solar panels could produce. Any excess power he generates gets fed into the electrical grid, and he get credits that lower his utility bill.

If utility regulators and power companies change how the energy his solar panels produce is valued, it could tank the investment he made in adding them to his home.

"If the legislature or the Public Service Commission, and with their blessing, Northwestern (Energy), could alter the contract of which I have a significant investment I could have my economic expectations significantly affected, making it very difficult for me to pay it back on any responsible period," Mullen testified.

Representative Daniel Zolnikov, a Republican from Billings, wants to protect home energy generators like Mullen. He’s sponsoring a bill that would lock utilities’ reimbursement rates for people who’ve already made the investment in home power systems.

"This bill seeks to formalize and protect the crediting rate that customer-generators receive at the time they sign up for this service," Zolnikov said.

No one in Montana’s energy industry testified against the bill. But Northwestern Energy, Montana’s biggest electric utility doesn’t like a second proposal by Representative Zolnikov.

That bill would allow federal, state and tribal government-owned buildings to get a bigger rebate from electric utilities for the energy they’re able to generate from things like solar panels and feed back into the electrical grid. Right now, those rebates are capped at 50 kilowatt hours.

“Increasing this cap for these government buildings allows for government administrators the ability to reduce some operating expenses and plan more responsibly for power costs,” Zolnikov said.

He says the current cap on credits for surplus energy produced might discourage some governments from investing in renewable assets, like solar panels. He says it’s an argument based on economic scale - it may not make economic sense for some larger institutions to build renewable capacity unless they could get a certain economic return from it, in the form of lower utility bills.

But, John Alke with Northwestern says growing the ca p on rebates for renewable energy by five times its current amount, which Zolnikov is proposing, would harm to Montana utility rate payers.

"The reason for the limitation is to cap the amount of the subsidy," Alke said. "It’s a linear relationship. There is a real cost to solar. And it is paid for by the customers who don’t have solar."

Alke says solar isn’t always a reliable source of power. So, Northwestern has to have other sources, like coal and natural gas, ready for when the sun isn’t shining, and everyday ratepayers, Montana consumers, pay for those facilities in their utility bills.

"Low income people and people of modest means, they don’t care about tax credits, they can’t buy ten, fifteen, twenty thousand dollar investment to get a tax credits and save money on their power,” Alke said.

Montana-Dakota Utilities, which serves eastern Montana, also testified against the bill proposal for similar reasons.

Representative Daniel Zolnikov disagrees with the utility companies’ argument that the cap on how much renewable energy government buildings can generate is a subsidy.

His bill is being supported by the renewable energy industry and its advocates, as well as wildlife and university student groups, and the Montana Department of Environmental Quality.

More proposals to change net metering laws will be heard in Senate committees Tuesday afternoon.