Dive Brief:
- The Montana Public Service Commission (PSC) on Monday unanimously voted to reject NorthWestern Energy's proposal to end net metering, implement a new rate class and add a demand charge.
- Regulators opted to maintain retail rate net metering until rooftop solar adoption reaches 5% of peak load, or the utility produces evidence to support its new rate class. PSC staff concluded the utility did not provide all requested information, and had recommended against approving the proposal.
- Renewables advocates hailed the 5-0 decision, which they say would have penalized customers who invest in rooftop solar and sent solar jobs to other states. A final order will be issued by the PSC next month.
Dive Insight:
Rooftop solar is currently only 1% of NorthWestern's peak load, leaving plenty of room to grow before the commission would reconsider moving customers into a separate rate class, according to estimates from Vote Solar and the Montana Renewable Energy Association.
"While the utility is allowed to come back with the required analysis and try again, we'll be waiting for them," David Bender, staff attorney at Earthjustice, said in a statement. "We are confident that a correct analysis will confirm what we've been saying all along: solar customers are a net positive to our energy grid."
The recommendation to wait until 5% solar penetration was put forth by Vote Solar and the Montana Renewable Energy Association, represented by Earthjustice. But the groups say either way, according to Montana law, changes to solar rates would need to occur in a general rate case.
NorthWestern said it is "disappointed with the ruling on the proposed new customer class for new net metering customers," in a statement, but will wait until a final order is issued to review before commenting specifically.
The utility did say, however, that the current rate design is flawed, and that "inequity will continue until the issue of the cost of service for the electric grid for residential customers who net meter is addressed."
Last year, a cost-benefit analysis estimated the value of solar energy sent back to the Montana grid at about $0.04/kWh — significantly less than what net metering customers are paid. NorthWestern Energy currently pays customers about $0.12/kWh for energy sent back to the grid.
NorthWestern also said it will work with the PSC and staff "to identify specifically the additional information it feels is needed to consider a new rate class."
Monday's vote was part of NorthWestern Energy's first rate case in a decade.
