10 January 2017
Montana’s net metering advocates won’t like SB-78
At present, net metering customers of Northwestern Energy are paid the retail price per kilowatt hour for their excess photovoltaic, wind, or (micro)hydro, generated electricity. That will change if Senate Bill 78, introduced by Sen. Keith Regier (R-Whitefish), becomes law.
Regier chaired the Energy and Telecommunications Interim Committee, which approved five net metering bills for the 2017 session of the legislature. SB-78 is not one of the interim committee’s bills. I suspect it was at least partially written by someone representing an electric utility.
The bill seems intended to set as low as possible the price paid for excess generation:
Section 2. Section 69-8-602, MCA, is amended to read:
(2) (b) Electricity produced by the customer-generator and delivered to the public utility must be valued at the wholesale rate as established by the mid-Columbia electricity price index average over a 3-month period.
(3) A customer-generator shall also pay a monthly service charge determined by the commission that is sufficient to cover the customer-generator’s share of a public utility’s fixed costs of operation.
(5) For the purposes of this section, “mid-Columbia electricity price index” means volume-weighted averages of specifically defined bilateral, wholesale, or physical transactions. Calculations average together power transactions from Columbia, Midway, Rocky Reach, Wells, and Wanapum/Vantage delivery points along the Columbia River.”
The mid-Columbia price index is based on data collected by the Intercontinental Exchange. The Rocky Reach, Wells, and Wanapum/Vantage delivery points are named for hydropower dams on the Columbia owned by the Chelan County, Douglas County, and Grant County, public utility districts. Customers of these PUDs pay what may be the lowest electricity rates in the United States.
The Rocky Reach Dam, incidentally, has a fascinating museum of electricity at its visitor center. It’s well worth a visit if you’re in the Wenatchee area.
At the Douglas County PUD, residential customers (PDF) pay 2.33 cents per kilowatt hour for the first 25,000 kWhrs each month, plus a $13 per month fixed charge. At Northwestern Energy, the residential energy charge is 11.55 cents per kWhr, and the monthly fixed charge is $4.10.
Whether SB-78’s pricing mandate would yield net metering payments similar in value to the per kWhr prices at the three central Washington PUDs is not a question for which I could find an answer. But these delivery points were not chosen at random. I strongly suspect that if SB-78 becomes law, new net metering customers of Northwestern might be paid as little as a cent or two per kWhr for their excess generation. Although I haven’t run that number through the NREL’s System Advisor Model yet, I suspect many PV systems in Montana would never reach the break-even point.
But there is one benefit, surely not intended, to the introduction of SB-78. It calls favorable attention to the economic benefits enjoyed by the customers of public utility districts.