MTPR

PSC, Utilities Debate Fair Price For Renewable Energy

Jun 1, 2016

A federal law from the 1970s is pushing Montana’s Public Service Commission to act as mediator between large utility companies and small renewable energy providers as they debate the price of electricity.

On Wednesday, the PSC hosted a roundtable with energy companies to discuss the Public Utility Regulatory Policies Act. The federal law requires electric utilities to purchase energy from small renewable energy companies in an effort to encourage innovation and development of alternative energy sources.

The question before the PSC is: what price should major utilities pay for energy developed by an alternative electricity company?

PSC Commissioner Travis Kavulla says that price-point changes with the larger energy market, and needs to be adjusted every few years. He says meetings like the one Wednesday have been held since the 70s.

"This is coming about now because there have been some market changes with respect to the falling price of electricity. Natural gas has never been cheaper. And a consequence of that is that electricity has never been cheaper."

Kavulla says the trouble is that once you set a price, the market can change. And then the utility company or the small independent company isn’t getting the rate they wanted.

Next week, the PSC will hold a hearing on what is being called an "emergency motion" by the utility Northwestern Energy to suspend current price rates. The company is arguing that the current price of electricity from small renewable companies is out of date, and they are being charged too much.

Kavualla says if this price setting is done right, the consumer should be indifferent about their electricity coming from their utility company or an independent supplier.