A Montana judge ruled that state regulators should not have waived a legal requirement that NorthWestern Corp. acquire small, locally owned renewable energy projects.
Under a 2005 Montana law, NorthWestern must purchase power from so-called Community Renewable Energy Projects to promote rural economic development and expand renewable energy resources. The law requires utilities to acquire or contract with at least 65.4 MW in small renewable energy projects. Each project can be no greater than 25 MW and must be locally owned. The Montana Public Service Commission granted NorthWestern waivers that allow it to evade compliance with the law.
The Montana Environmental Information Center sued the Montana Public Service Commission, the Montana Department of Public Service Regulation and NorthWestern in November, alleging that NorthWestern had not fulfilled the requirement and that regulators violated the law by refusing to fine NorthWestern for not doing so.
Represented by Earthjustice, the Montana Energy Information Center "brought the court challenge to ensure that NorthWestern faces the consequences the Montana Legislature intended for breaking the law and failing to procure low-cost, clean-energy for Montanans," according to a news release.
Judge James Manley agreed, calling the regulators' decisions arbitrary and erroneous. NorthWestern could face $2.5 million in penalties, which will be deposited in a fund that provides billing assistance and house weatherization to low-income Montanans.
The same judge ruled earlier this year that the commission acted arbitrarily and unreasonably in slashing the rates and lengths for contracts NorthWestern pays to qualifying renewable facilities, after Commissioner Bob Lake was caught on a live microphone saying those terms would kill renewable development in the state.
NorthWestern spokesperson Jo Dee Black said in an email that the company is moving quickly to contract with, or purchase, small renewable energy projects to comply with the law.
Regulators have already approved five such projects totaling 36.4 MW, Black said. The commission is also considering a certification request for the 20-MW Meadowlark Solar Project, owned by VK Clean Energy Partners LLC subsidiary Meadowlark Solar LLC. Once that project comes online, NorthWestern will need to acquire less than 10 MW of additional projects, Black said. Moreover, ongoing upgrades to the company's hydroelectric facilities should qualify to help satisfy the requirements of the statute, Black said.
"Once again the courts have ruled against NorthWestern Energy and its efforts to hinder wind and solar projects in Montana," Brian Fadie, clean energy program director for the Montana Environmental Information Center, said in a news release. "Since this state law was passed in 2005, NorthWestern has never been in compliance, choosing instead to lobby against or otherwise undermine these projects. That's 14 years of lost clean energy, jobs, and tax revenue for rural communities around Montana."