Bill would count existing dams as renewable energy

State lawmakers are considering a bill that would make it easier for utilities to meet the standard for renewable energy production, a proposal that conservationists say would make the standard meaningless.

The state's largest utility is also opposed to the bill because it would mean a windfall for hydroelectric power generators but end up costing its customers more.

The measure sponsored by Republican Sen. Debby Barrett, of Dillon, would allow electricity produced by large hydroelectric facilities to count toward state renewable resource requirements.

Montana utilities are required to procure 10 percent of their retail electricity sales from renewable resources. That jumps to 15 percent in 2015.

State law now counts only smaller hydroelectric facilities of 10 megawatts or less toward those requirements. Barrett's bill would make all existing dams and hydroelectric facilities eligible renewable energy resources, as long as they are not federal facilities.

About 40 percent of Montana's electricity comes from hydroelectric power. The proposal would add approximately 1 gigawatt of existing power to the state renewable energy standard, said Kyla Wiens, an energy advocate for the Montana Environmental Information Center

The bill would add so much hydroelectric power that companies required to comply with the standard would not have to develop any new resources for the next 20 years, she said.

"This bill would essentially make the existing renewable energy standard meaningless," Wiens said. "If all this hydro power is added, there's no need to get any new renewable energy."

NorthWestern Energy, the state's largest utility, says that is a possibility but it is opposing the bill because generators would be able to sell their hydroelectric power at a premium if it is reclassified as a renewable resource.

The generators would also be able to sell renewable energy credits to out-of-state interests, putting them in competition with NorthWestern's interests.

"We believe it essentially would create a windfall gain for generators that would ultimately punish our customers through higher energy costs," NorthWestern spokeswoman Claudia Rapkoch said.

It was premature to speculate on the effects the bill would have on NorthWestern's wind energy projects, she said.

The intent of the bill is to recognize that water is a renewable resource, and the measure should not be a disincentive to developing wind power or other renewable resources in the state, Barrett said.

"If NorthWestern or anybody else can afford to develop it on a level playing field, they should go ahead," she said. "I would like a product produced economically so we can purchase it economically."

Barrett said she believes the incremental increases in the renewable energy standard are "smoke and mirrors" that ensures certain companies can make money while the taxpayers subsidize their renewable energy initiatives.

The Senate Energy and Telecommunications Committee planned to hold a hearing on the bill Tuesday afternoon.