Montana’s Public Service Commission is petitioning the U.S. Supreme Court to hear a dispute involving a renewable energy project decided by the state Supreme Court last September.
The lawsuit centers on whether the PSC is fairly mediating disputes between renewable energy developers and regulated utilities like NorthWestern Energy in the state’s wholesale market. Montana courts have twice ruled against the PSC, finding that the contract terms it sets are unfavorable to renewable energy providers and that the commission has demonstrated bias in its dealings with them.
In its March 3 filing asking the U.S. Supreme Court to take up the issue, the PSC argued the Montana Supreme Court’s 2020 decision will result in overcharges to Montana’s energy consumers, and that federal, not state, bodies should adjudicate disputes regarding federal law.
Central to the debate is the Public Utilities Regulated Policies Act, or PURPA, a law Congress passed in 1978 to spur competition in the electricity market and encourage fuel diversity on electrical grids. Under PURPA, alternative energy developers –– e.g., wind and solar developers –– can sell energy to larger regulated utility companies. PURPA establishes guidelines around that process and outlines the factors to consider when those parties set contract terms.
MTSUN, an 80-megawatt solar project planned for an area outside of Billings, couldn’t agree to contract terms with NorthWestern Energy, so it asked the PSC to intervene, a remedy it was entitled to under PURPA. The PSC subsequently issued an order in 2017 that set rates and established a 15-year contract.
MTSUN disagreed with the PSC’s order, so it filed a lawsuit in the District Court of Cascade County. MTSUN said the contract term was too short and that the project’s ability to meet NorthWestern’s energy needs during peak demand should have been worth more. It also said a carbon adder — essentially a premium for being a clean energy source — should have been included.
Rogala said the PSC’s best-case scenario is that the U.S. Supreme Court reverses the state Supreme Court’s decision and voids the contract terms between MTSUN and NorthWestern Energy. He said the PSC also hopes the high court will clean up the legal record as to who has authority to adjudicate PURPA disputes. The PSC maintains that federal, not state, courts are best positioned to mediate those cases.
Monica Tranel, who represented WINData in the Montana Supreme Court case, countered that PURPA is clear on the role of state courts, and that the PSC’s jurisdiction claim holds little water.
Read more at the Montana Free Press.