By Ian Lund
SB 109 would establish new PSC districts and cut every major Montana city into more than one district.
Under the copper dome in Helena, utilities and conservative lawmakers are pushing laws that would undermine existing regulations and make it more difficult for cities to pass progressive energy policies. This is bad news for electricity customers and the climate. Here are a few of the bills about which we are most concerned.
Undermining the PSC’s Authority
HB 220 (Rep. Josh Kassmier, R-Fort Benton) establishes a special committee to rewrite all energy planning and resource acquisition laws. The committee would be made up of mostly utilities and Republicans, and would recommend changes to the Public Service Commission’s (PSC) new resource acquisition rules. The new rules protect consumers and give the PSC more oversight over a regulated utilities’ acquisition of new energy generation resources (a.k.a. power plants). Despite strong opposition from NorthWestern Energy, the PSC unanimously approved the new rules in December 2022. HB 220 gives NorthWestern a platform to replace the rules with ones that are more favorable to the utilities’ interests. The bill takes aim at specific provisions designed to protect consumers, such as the competitive solicitation process, which forces utilities to publicly evaluate the cost of various resources to ensure selection of the least cost option. The PSC exists to protect customers from poor decisions by utilities, but HB 220 puts the utility in the driver’s seat instead of the PSC.
In 2022, a Montana district court struck down the statute that allowed NorthWestern Energy to seek “pre-approval” from the PSC for new generation resources, on the grounds that it was “special legislation,” only benefiting one public utility. HB 284 (Rep. Jerry Schillinger, R-Circle) fixes that by extending pre-approval privilege to Montana-Dakota Utilities. However, this bill does nothing to address the harm that pre-approval can cause to ratepayers. Right now, pre-approved projects commit ratepayer funds to a project that can never be reviewed and denied at a later date or deemed imprudent. Additionally, there are no conditions for when pre-approval can be granted, meaning the utility can ask for pre-approval of resources before even comparing them to alternatives. Any pre-approval process should include a competitive solicitation process so the PSC can verify that the utility is getting the best possible deal for customers.
NorthWestern Energy is also deputizing legislators to attack rooftop solar net-metering rates. HB 643 (Rep. Josh Kassmier, R-Fort Benton) was its first attempt: It would have forced the PSC to create new rates for rooftop solar generators without taking into account the benefits of distributed solar for the grid. The House Energy Committee killed that bill, but now the same legislator is bringing another bill that does the same thing: decimating the compensation rate for the energy rooftop solar generators provide to the grid. At the time of this writing, the bill has not been assigned a number.
HB 170 (Rep. Steve Gunderson, R-Libby) repeals Montana’s state energy policy, a policy that has stood for 30 years and works to promote energy efficiency, conservation, production, and consumption of energy sources that represent the lowest costs and the greatest long-term benefits to Montana citizens. It makes no sense to repeal a sound principle when it could be improved to mitigate the worst impacts of the climate crisis and ease the transition to a clean energy economy. Rather than repealing this policy, it should be improved by amending it to: include support for a transition away from reliance on fossil fuels to a clean energy economy; make better use of Montana’s existing transmission capacity; and establish plans for a just transition for fossil fuel dependent-communities and workers.
Finally, SB 109 (Sen. Keith Regier, R-Kalispell) gerrymanders the PSC districts to all but ensure Republican control of the Commission. MEIC supported the bill as introduced because the previous districts were unconstitutional, but amendments were added to gerrymander the districts and split every major Montana city into at least two different districts. Last fall, a court found the PSC districts were lopsided and thereby unconstitutional for failing to provide people with adequate representation. The Secretary of State and the court established new districts for the elections during Fall 2022. SB 109 was introduced to adopt that district map but was then amended to create gerrymandered districts. These gerrymandered districts will likely violate the requirement for compact districts.
Prohibiting Local Regulation
In line with the theme of the session, SB 228 (Sen. Jason Small, R-Busby) attacks local control by preventing local governments from prohibiting the purchase or use of any petroleum-derived fuels: methane, oil, propane, gasoline, and diesel fuel. It also restricts local governments from limiting the use of vehicles, vessels, tools, appliances, or equipment that burn or transport petroleum fuels. As a result, local governments would be unable to regulate various activities involving petroleum, such as storage tanks, power plants, gas stations, semi trucks, and cars. This bill is written so broadly that it may even prohibit local governments from limiting gasoline or diesel vehicles, regardless of where they are driven or how fast.
Cities and counties around the country are limiting new methane gas hookups as a means to protect public health and safety, and decrease methane pollution. SB 208 (Sen. Jason Small, R-Busby) preempts any attempt by a local government to ban or limit the use of methane gas in Montana. SB 208 would prohibit the Department of Labor and Industry (MDLI), which writes the state building code, from writing any building codes that leave flexibility to cities to limit or prohibit the use of energy resources, and the bill denies local governments the power to obstruct the connection of fossil fuel infrastructure. In other words, it prevents cities and counties from taking meaningful action to protect public health and safety, and limit greenhouse gas emissions. Methane emissions from gas appliances have been shown to be harmful to the environment, health, and climate; local governments should have the ability to address these concerns as they deem necessary.
Lastly, HB 241 (Rep. Josh Kassmier, R-Fort Benton) would prevent local governments from requiring that new homes be designed to accommodate rooftop solar and electric vehicle (EV) charging.
Requiring such designs is a small lift for developers and could save homeowners thousands of dollars in future retrofits for their homes. MDLI passed new state building codes in 2022 that allowed self-governing cities to adopt voluntary city codes including solar-ready construction requirements. They would require new construction in those jurisdictions to design and build homes in such a way that adding solar panels later would be a cheap, convenient, and efficient option for building owners. HB 241 bans the MDLI and cities from adopting solar-ready codes at a time when we need local governments to help create climate solutions.
Taxing Electric Vehicles
The Legislature is still trying to figure out how to tax EVs. HB 60 (Rep. Denley Loge, R-Saint Regis) seeks to tax EVs when they are registered annually with a tax that would range between $130 and $1,100 for Class 4 vehicles. Passenger vehicles would be taxed $130/year and electric trucks would pay $190/year, while heavier vehicles would be taxed even more. EV taxes aren’t uncommon, but only nine other states have higher taxes for light duty vehicles, and only five have higher taxes for trucks. Additionally, Montana already has high registration costs for new vehicles. So, if someone wants to buy the new Ford F-150 Lightning, they would pay a $217 annual registration fee and the $190 electric vehicle tax. That’s $407 every year for the first four years of ownership, easily making Montana the most expensive state to own an electric truck.
Rep. Loge was concerned that the registration fees did not go far enough to tax the clean vehicle transition, so he introduced HB 55, which taxes EV charging at public stations. The intent is to make out-of-state EV owners pay their “fair share” of the state gas tax. It creates onerous, expensive, and complicated requirements for businesses that offer EV charging services. To enable utilities to charge the 3 cent/kilowatt-hour tax, every business must install a new electric meter specifically for the EV charger. This is especially inconvenient for “legacy” EV chargers, which may need expensive retrofits to comply by 2028. The one silver-lining of the bill is that because Montanans would be double-taxed if they paid the new registration and the charging taxes, the proposed registration tax would be lowered by 30% in 2028.
This article was published in the March 2023 issue of Down To Earth.