Committee Backs Energy Plan

Committee Backs Energy Plan

HELENA - May 16 - Billings Gazette, The

A House committee passed a bill Thursday requiring utilities to obtain a portion of their electricity from green power sources, but only if the measure does not increase consumer's utility costs.

Senate Bill 415, by Senate President Jon Tester, D-Big Sandy, requires NorthWestern Energy and Montana Dakota Utilities to obtain 5 percent of their power from wind or other renewable energy sources by 2008, 10 percent by 2010 and 15 percent by 2015. Rural electric cooperatives are exempt.

With increasing oil costs, natural gas prices are on the rise, supporters say But wind energy will stabilize rates and is also better for the environment because it reduces air pollution from fossil fuels burned from coal and natural gas plants.

NorthWestern Energy, which opposes the bill, says the measure unfairly targets its business. Placing a mandate is unnecessary when the company has voluntarily sought out renewable energy sources, said John Fitzpatrick, NorthWestern's governmental affairs director. The company recently received Montana Public Service Commission approval to sign a 20-year contract to buy up to 150 megawatts of wind power from a project that will be built near Judith Gap in Wheatland County.

Most lawmakers supported the use of renewable energy sources, but they adopted an amendment by Rep. Mark Noennig, R-Billings, to make sure no extra burden falls on consumers. "I like the idea of wind power, but I don't want my constituents to pay for it," Noennig said.

The effects wind power will have on utility rates is somewhat uncertain, said Rep. George Groesbeck, D-Butte. Supporters say it will decrease costs over time while opponents argue it will increase.

NorthWestern buys 70 percent of its power from PPL Montana through contracts that expire in mid-2007 If using wind is not as cost effective as the energy sources it gets from hydroelectric dams and coal-fired power plants, the company would not be required to use wind or other renewable sources.

Right now, the price for wind energy is competitive in the market, said Fitzpatrick because the federal government provides production tax credits to wind projects. The tax credits are scheduled to end Dec. 31. Should the government reduce the tax incentive, it could significantly increase the costs for wind energy.

"If the tax credit goes away, then consumers would get hammered:' he said.

MDU generates its own power. Under an amendment approved by the committee, if the company generates power using wind or other renewable sources and it costs more than 15 percent of its current expenses, then MDU also is exempt from this bill.

Patrick judge of the Montana Environmental Information Center said he is concerned by the implications of the amendment, but he was happy the bill passed out of committee. The change discourages local communities from constructing wind turbines because such projects slightly increase utility rates, Judge said. But the benefit of locally owned wind projects is that it allows communities to produce and consume energy in the same relative location. Plus, wind turbines all across the state produce power more efficiently then one project in a central location, he said.