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Chasing the Sun

Advocates see great potential in Montana’s growing solar power industry, but a Public Service Commission decision has changed the landscape

Up the North Fork of the Flathead — one of the wildest valleys remaining in the lower 48 states — the Polebridge Mercantile acts as a tiny haven of modernity, offering visitors baked goods, cold beer, supplies, and even a slow Internet dial-up.

Maintaining this human oasis in the elements is no easy task, but one especially trying aspect of running a business up the North Fork is having no access to a power grid or electricity.

That’s where owner Will Hammerquist decided to get creative. Behind the red-box frame of the mercantile sits an old historic barn, where the original owners housed horses to ride into town.

Now, the barn is covered in high-tech solar panels that capture sunshine and turn it into power to run the store. One source of power swapped for another, Hammerquist likes to say about the barn.

“We’re probably close to running 75 percent on solar power,” Hammerquist said in an interview last week.

The rest of the time, Hammerquist runs a diesel generator. It’s especially important in the summertime, because the mercantile is running refrigerators and other aspects of the business.

“In sunny winter, we could be 100 percent (solar) for months at the time,” he said. “We have a 30-kilowatt system, and my energy loads get close to that during (summer’s) peak times.”

Being off the grid necessitates innovative power ideas, Hammerquist acknowledged, but after paying bills in Polebridge for a few years now, he’d use solar power anyway.

“Solar is hands down more cost-effective. I view that as a simple business decision around how I put together my power supply in Polebridge,” he said. “In my mind, you have a diversity of supply in your portfolio. The sweet spot is where you use your renewables when they’re available, and you firm up with the fossil fuels when they’re not.”

Renewable energy sources have become a constant topic in national and statewide discussions about the future of America’s power. Solar power installations across the U.S. nearly doubled in 2016, accounting for more than 40 percent of new power projects added last year, according to a report from Greentech Media.

According to the report, 22 states each added more than 100 megawatts of power.

In Montana, solar is a slower growing industry. According to the Solar Energy Industries Association, the state has 25.8 megawatts of solar installations, ranking 42nd in the nation for solar projects.

The SEIA counted 168 jobs total jobs in solar energy in 2016 in Montana, along with 43 companies, and more than $6 million invested in solar.

But a recent decision from the Montana Public Service Commission, which is tasked with balancing a regulated utility’s reasonable right to profit with the customers’ right to a fair price, could stymie future solar projects.

At its July meeting, the PSC voted unanimously to reset guaranteed rates and contracts for all energy projects, including solar. Prices set by contract can no longer extend past five years, the PSC determined, changing it from the previous 25-year minimum.

When finalizing the decision, the board noted that the contracts are technically 10 years, because of a mandatory price renegotiation after five years. The commission reasoned that the long-term contracts unfairly trap customers for decades with prices higher than current market rates.

Guaranteed rates for the power produced were also slashed by 40 percent, causing small solar farm developers to object, saying five years is too short of a contract to secure financing.

Already, the decision is causing waves. MTSUN, a massive 480-acre solar farm planned near Billings, has reported that it cannot continue the $110 million project with a 10-year contract and the rates set by the PSC.

Several state lawmakers on the Legislature’s Energy and Telecommunications Interim Committee wrote a letter telling the PSC that its changes may be unlawful.

The Montana Environmental Information Center took part in a lawsuit trying to stop the decision, and has now appealed the PSC’s decision on the contract changes, asking for a reconsideration.

“Their decision would put a complete stop to (small) types of solar energy projects,” said Brian Fadie, clean energy program director at MEIC. “The commission set contract lengths for these solar projects that are entirely unworkable for developers.”

Fadie said the decision was especially disappointing as six utility-scale solar projects are about to come online, each producing 3 megawatts. Two are located in Helena, one in Hardin, one in Reed Point, one in Great Falls, and one in Lavina.

“It’s an example of how the solar technology has advanced, both in efficiency of the technology and cost declines,” Fadie said. “The commission’s ruling puts an end to that.”

Flathead Electric Cooperative, which as a cooperative is not regulated by the PSC, had no specific comment on the PSC decision, but spokesperson Wendy Ostrom Price said as a member-owned utility, power portfolio decisions belong to the members.

“All the power-purchase obligations that Flathead Electric Co-op enters into, they need to be fair to the members of the co-op first before any other considerations are made,” Ostrom Price said.

Co-op members are divided on the issue of pursuing more solar projects, she said, though the company continues to search out such projects just in case.

“We’re always looking for new community solar projects to develop as long as there’s adequate interest from our members,” Ostrom Price said. “I think people in general are interested in alternative energy sources — it just can’t be at all costs. As technology progresses and this kind of technology gets more affordable, the interest will grow as well.”

Still, solar advocates say renewable energy sources are price competitive and creating jobs. According to the U.S. Department of Energy, the solar industry accounts for more than 374,000 American jobs, meaning the industry employed 43 percent of the workforce generating electric power in 2016.

Hammerquist believes the numbers he’s seen on his bottom line after investing in solar are going to catch on, regardless of state policy.

“How we make that work on scale and in a grid designed 70 or 80 years ago, that’s tricky stuff. But we can’t let preconceived notions dictate the future,” Hammerquist said. “Solar is price competitive, without a doubt.”

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