By Ian Lund
SB 109 establishes new PSC districts and cut everymajor Montana city into more than one district.
2023 was a tough session for energy lobbyists in Montana. The Republican supermajority was committed to thwarting any energy progressivism and rolling back the few climate-friendly policies the state does have. While a dozen bad bills got through, three bills were defeated that would have been terrible for clean energy in the state.
Clean Energy Survives
Despite attacks from pro-fossil fuel legislators, wind projects and rooftop solar made it through the session relatively unscathed. Two bills, SB 97 (Sen. Keith Regier, R-Kalispell) and HB 454 (Rep. Gary Parry, R-Colstrip), tried to increase taxes on large-scale wind projects tenfold. Legislators wisely tabled these bills in the Senate and House Taxation Committees once it became clear that raising taxes on wind would effectively kill the industry and the revenue it produces for eastern Montana counties and agricultural producers. Raising taxes might increase revenue in the short term, but it could cost the state significant revenue in the long term if new projects do not get built.
Rooftop solar also survived an attack. Rep. Josh Kassmier (R-Fort Benton) carried several bad energy bills, including HB 643. This bill would have directed NorthWestern Energy to “study” the costs of the rooftop solar net-metering program and ask the Public Service Commission (PSC) to make a special rate class for solar customers that would effectively eliminate the benefits of the program. In a memorable hearing, Republican PSC Commissioner Randy Pinocci (speaking in his personal capacity) and former Republican House Energy Committee chair Derek Skees spoke against the bill, decrying NorthWestern’s attempt to sideline a low-cost energy resource while asserting a need to build new power plants.
Another big win this session was killing SB 353 (Sen. Walt Sales, R-Manhattan), NorthWestern’s “Right of First Refusal” for transmission projects bill. This bill would have meant that whenever any developer tried to build a new transmission line to move clean energy to market, NorthWestern would be allowed to build and operate the line instead, only letting merchant transmission developers build and operate the line if NorthWestern refused. This would have greatly increased the costs to ratepayers by taking a competitive sector and handing it to a monopoly utility on a silver platter. Hats off to the Senate Energy Committee for voting that bill down.
Wins for clean energy end there, unfortunately. SB 399 (Sen. Christopher Pope, D-Bozeman) would have established a framework for developers to build community solar projects. Despite extensive support from developers, climate groups, and Montana residents, this bill was tabled in committee.
Electric Vehicles Taxed
Electric vehicles (EVs), despite being a small fraction of cars on the road today, took an inordinate amount of the Legislature’s time as it tried to find a way to over-tax them for using the road system. Rep. Denley Loge (R-St. Regis) brought two bills, HB 60 and HB 55, that will increase the cost of EV ownership for Montanans. HB 60 adds an extra $130 annual fee to existing registration fees for EVs, with an even higher additional fee of $190 for electric trucks. This fee supposedly replaces the gas tax revenue that EV drivers don’t pay because they don’t buy gasoline. Although such EV fees are not unusual in the U.S., Montana’s is relatively high, especially for heavier vehicles.
Recognizing that Montana hosts more than a million tourists each year, some of whom will drive EVs, Rep. Loge sought to capture lost gas tax revenue from this group with HB 55. This bill establishes a 3¢ EV charging tax on public charging stations. The problem with a charging tax, however, is that it would mostly be paid for by Montana EV drivers who already pay high annual fees on top of existing registration fees. Rep. Loge’s original solution to this “problem” was having the Montana Department of Transportation (MDT) remit the tax to Montana drivers. This tax collection and remission program would have cost more than $2 million, not netting revenue for about five years.
Ultimately, the Legislature decided that it would just be easier to tax EV drivers twice. Instead of MDT administering and remitting the tax to Montanans, NorthWestern Energy’s lobbyist-turned-legislator, Rep. John Fitzpatrick (R-Anaconda) amended HB 55 to make utilities the tax collector through electric meters and eliminate the provision that protects Montana EV drivers from double-taxation. Additionally, his amendment gives utilities 0.25¢ of the 3¢ tax for every kilowatt-hour of EV charging for their trouble. Once again, the Legislature catered to its favorite customer-gouging monopoly utility.
Death to Local Control
In addition to undermining local control by passing SB 208 and SB 228 (see article on pg. 12), the Legislature also passed HB 241 (Rep. Josh Kassmier, R-Fort Benton). HB 241 demonstrates how far the 2023 Legislature was willing to go to discourage clean energy. In 2022, the Montana Department of Labor and Industry passed new building codes that allow self-governing cities to voluntarily adopt a “solar-ready” building code. Under the new rules, local governments could require that new construction be designed and built in such a way that adding solar and EV charging stations would be a cheap, convenient, and efficient option for building owners. Despite the low cost and ease of implementation, the Legislature killed this new local government option that could save homeowners thousands of dollars over time.
The Legislature Does NorthWestern’s Bidding
Rep. Josh Kassmier (R-Fort Benton) again did the bidding of fossil fuel interests by carrying HB 220 on behalf of NorthWestern Energy. This bill creates a special interim committee to suggest revisions to energy resource planning and acquisition laws despite the recent overhaul of the law and the PSC’s adoption of implementing rules in late 2022. The 12-person committee will be made up of four Republicans, two Democrats, two utility representatives, one PSC representative, one Consumer Counsel advocate, one independent power producer, and one environmental organization. NorthWestern Energy will surely be using this committee to tee up more legislation in 2025 that decreases oversight of its resource supply planning and decisions regarding new power plants. HB 284 (Rep. Jerry Schillinger, R-Circle) reinstates “preapproval,” the process by which a utility can put power plants into the rate base before they are built and operating.
Public Service Commission
Finally, SB 109 (Sen. Keith Regier, R-Kalispell) gerrymanders the PSC districts to all but ensure Republican control of the Commission. The bill splits every city into at least two different PSC districts in an attempt to water down the democratic base in most cities and provide more power to rural areas. One district covers all of southwestern Montana and continues northeast, far beyond the Great Falls area.
Unfortunately, two good interim study resolutions failed to make it across the finish line. HJ 36, (Rep. Steve Galloway, R-Great Falls) requested an interim committee study emerging energy markets that are developing in the Western U.S. as well as the transmission system that is needed to carry power from Montana to other states. This bill was strongly supported by MEIC because developing energy markets are crucial to decarbonizing the electricity system. The bill failed when the Senate adjourned the session before it had a hearing. The second resolution, HJ 40 (Rep. Dave Fern, D-Columbia Falls), was defeated despite unanimous support from the PSC. The resolution requested an interim legislative committee study the impact that cryptocurrency has on the energy system and how the state could minimize those impacts during times of peak energy demand. Nearly all types of cryptocurrency operations require enormous amounts of electricity to run the machines, which can be a significant problem when electricity supplies are tight, causing higher energy costs for residential and commercial businesses. Hopefully, both issues will still be studied by an interim committee.
This article was published in the June 2023 issue of Down To Earth.