Dive Brief:

• The Public Service Commission hosted a public roundtable tomorrow to discuss the Public Utility Regulatory Policies Act, with NorthWestern Energy seeking to halve the price it pays for energy from qualifying facilities.
• The Billings Gazette reports more than 100 small commercial solar projects have been proposed in Montana, setting off a debate over the price utilities must pay for the energy generated, against a backdrop of falling panel prices.
• The state currently requires projects 3 MW of smaller to be granted 25-year contracts at a rate of $66/MWh, but NorthWestern has said there is no demand for the rush of projects being developed.

Dive Insight:

Regulators in Montana hosted a roundtable on Wednesday aiming to tackle a host of issues surrounding PURPA mandates, including how avoided costs are estimated, standard rate designs for small projects, and market price forecasting. The discussion followed concern by NorthWestern Energy that contract terms legislated by the state are costing consumers $5 million per solar project.

“There’s a whole shelf of solar projects that we do not have consumer demand for,” Butch Larcombe, a NorthWestern spokesman, told the Billings Gazette. “We think we’ve got at least, possibly 130 solar projects. We’ve had 43 of them filed this year alone.”

According to the newspaper, NorthWestern is attempting to have the PURPA qualifying rate cut to $34/MWh, saying the commercial facilities should receive a lower rate to compensate for infrastructure that NorthWestern maintains.

At the roundtable, PSC Chairman Travis Kavulla said prices should reflect market fluctuations.

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

There is some uncertainty surrounding the number of projects being proposed, as speculators buy up suitable properties located near points they can interconnect with the utility. According to the Gazette, some applications are filed and then withdrawn as speculators attempt to sell the projects to companies capable of developing them.

NorthWestern has tried unsuccessfully in the past to have the PURPA rate lowered. In March, a district court judge upheld a PSC order that denied NorthWestern's propsal to reduce its established avoided cost. 

Next week, the PSC will host a meeting to discuss NorthWestern's request to suspend current price rates.