Customers Should Benefit from Declining Costs of Renewables

Modernizing PURPA will give states like Montana more flexibility

By Bill Ryan

I have worked in Montana’s utilities systems since 1974, both investor owned and cooperative. I can say a lot has changed over those 40 years, especially for the electric consumers. Since 1978, when the Public Utility Regulatory Policies Act (PURPA) was enacted, a bill intended to increase energy conservation, efficiency and promote the growth of renewable energy, change has been rapid. It has done all it was intended to do and more. Thanks to PURPA, renewable energy has not just grown, it is thriving, and the cost of renewables continues to drop significantly.

But let’s take a close look. Customers are not the ones benefitting from the declining cost of the renewable projects! So you might ask, what is going on? Utilities are required to accept and add Qualifying Facilities (QF’s) to their systems, that’s PURPA’s goal. But now developers have learned to game the system.

Example 1, the Public Service Commission is currently in the middle of a proceeding to set an avoided-cost rate under PURPA for a developer that is demanding a rate that is on par with existing fossil fuel generation rather than renewable energy. (Oct. 23 Billings Gazette: “Next-gen wind farm near Columbus argues for prices on par with gas, coal.”)

Example 2, in 2017, the Montana Public Service Commission determined that NorthWestern Energy has been forced to pay PURPA energy providers nearly four times the avoided cost of energy. Montana Consumer Counsel recently noted in a filing that the PSC has “adjudicated seven large QF petitions in less than five years.” We, the IBEW, track those filings and there are several more on the horizon. That is going to raise rates on everyone.

Now understand, it is my IBEW members that build most of these systems, we like them, every type, but fair is fair. Shifting costs to consumers and undermining of small renewable projects is not right.

That’s why the International Brotherhood of Electrical Workers International President Lonnie R. Stephenson recently commended the chairman of the Federal Energy Regulatory Commission for taking steps to modernize the implementation of PURPA. “Under the current rules, developers have figured out ways to game the system in order to crowd out less expensive renewable projects, which hurts workers and customers alike.”

Modernizing PURPA will give states like Montana more flexibility to introduce more competition into renewable power projects, slashing prices for energy consumers while encouraging more opportunities for IBEW members to modernize the energy grid. It’s a win for workers, consumers and the environment, and we commend those efforts.

Bill Ryan, business manager
International Brotherhood of Electrical Workers Local Union 44

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