Dive Brief:

• Montana Vote Solar, the Montana Environmental Information Center and Cypress Creek Renewables are suing the state's Public Service Commission over its decision to cut rates utilities pay to small renewable developers under the Public Utility Regulatory Policies Act.
• The groups say the PSC decision was unreasonable and a violation of Montana law. They believe solar investment in Montana will be difficult if the rate cut is allowed to stand.
• Following the PSC's decision, qualifying solar facilities up to 3 MW receive $31/MWh for 15 years, as of October 2017, compared with the previous 25-year contracts for $66/MWh.

Dive Insight:

Solar advocates in Montana are framing their lawsuit as an economic issue for the state. With lower PURPA rates, the state will not see the solar industry flourish, they say, ultimately losing hundreds of millions of dollars of economic investment, hundreds of construction jobs and significant tax revenues for local governments.

“Independent power producers simply want a fair chance to compete as afforded under the law," Casey May, director of market development for Cypress Creek Renewables, said in a statement. But May blamed "monopoly utilities such as NorthWestern Energy" for pushing efforts to reduce competition.

"We want to do business in Montana," May said. "We want to increase Montanans’ access to clean energy, create jobs, and increase the tax base of state and local governments, but this decision prevents that. The Commission gave NorthWestern even more than what it asked for."

Last year, the Federal Energy Regulatory Commission ruled that Montana regulators acted improperly when they suspended payments to solar facilities under PURPA. The Montana PSC responded by slashing the rate and reducing contract lengths.

NorthWestern had received a total of 97 requests for solar hookups in the year and a half before the PSC suspended PURPA payments. After the suspension, the number of requests fell to 10.

According to the solar group's lawsuit, the commission's decision to lower rates "is a death knell for small solar development in Montana at a time when demand for renewable energy is growing, the cost of producing renewable energy is at an all-time low, and NorthWestern has claimed a significant need for electric capacity that solar and wind developers are well-positioned to supply."