The Green Power Program (formerly known as a renewable rate option or green tariff) is a program that would allow NorthWestern Energy customers to support and benefit from a new source of renewable energy in Montana, such as a new wind or solar farm. Local governments, businesses and residents would then have the option to subscribe to pay a special rate and receive a portion of their energy supply from this renewable energy source. By subscribing to the program, customers would pay the costs of the new renewable energy source over time and receive the benefits it produces, including the environmental benefits and the clean energy’s economic value on the market. 

The lead communities of the City of Bozeman, City of Missoula, and Missoula County have been working with NorthWestern Energy for the past several years to develop the Green Power Program. Developing the program is a key strategy for these lead communities to reach their respective 100% clean electricity goals.

Now, these communities have reached an important milestone by requesting their elected officials adopt the term sheet negotiated with NorthWestern. While non-binding, the term sheet serves as the framework for how the program will work going forward. Now that the Bozeman City Commission has adopted the term sheet, Bozeman and the other lead communities will consider entering into binding agreements to submit to the Public Service Commission.

The Public Service Commission will then need to approve the Green Power Program before it’s available to the public. Following approval, the next step would be for the lead communities and NorthWestern to develop an RFP and solicit proposals for the new renewable energy project. Once the project is selected, local government and commercial and industrial customers will subscribe to purchase electricity from it. 

There are two main ways to participate in the Green Power Program. Local governments, as well as commercial and industrial NorthWestern Energy electricity customers in Montana, will be able to subscribe to the Green Power Program. Local governments and commercial and industrial participants will commit to subscription contracts for the depreciable life of the renewable energy development, generally about 25 years.

There will be an opportunity for residential customers to participate, as long as they live within a local government jurisdiction that decides to participate in the program and are NorthWestern Energy electricity customers. Residential participation will be limited by the project’s size and may vary from community to community, as each participating local government will be able to allocate a portion of their subscription agreement to residents in their jurisdiction. Residential participation enables local governments to dedicate resources to additional renewable energy solutions.  

The cost to participate in the program will depend on a few variables: the fixed costs to develop the renewable energy source and administer the program, a floating credit representing the market value of the project’s clean electricity, and the size of the customer’s subscription. Preliminary modeling suggests that this represents a good value for participants and their climate goals. While it’s premature to assign a dollar amount at this point, we will be able to model financial impact and re-engage the community after the PSC approves the program. We will review costs again when we are closer to the project development phase, as they will evolve.

The size of the initial project will be capped at 50 MW and will be determined by how much energy local governments, and commercial or industrial customers in Montana, are willing to commit to purchasing over the depreciable life of the renewable energy development. The project size will be selected based on that interest. Regardless of size, the program would lead to a new source of renewable energy that would not have otherwise been built. 

The Green Power Program is one of our primary ways to reach 100% clean electricity for the City of Bozeman. A new renewable energy development, like a solar or wind farm, will be built to serve this program. Where small-scale development, like rooftop solar, may have site or size constraints, this development could be large enough to provide clean electricity to NorthWestern Energy commercial customers and hundreds of residential customers, including renters. A project of this size can move us significantly closer to our goal of 100% clean electricity by 2030. 

Preliminary modeling suggests that if the City subscribes to the program, this would have a minimal impact on the City's budget. While premature to assign an exact dollar figure at this point, initial estimates suggest a modest impact on utility bills, which make up a small portion of the overall City budget. 

Participation in the project will be completely voluntary, and non-participants will not be subjected to any of its costs. This is also known as “no cost shifting.” 

Right now, NorthWestern Energy’s E+ Green program allows customers to take credit for existing clean electricity that comes from solar, wind or hydro sources from anywhere in the Pacific Northwest. This does not necessarily change how much clean electricity is going onto NorthWestern Energy’s grid. The Green Power Program is designed so subscribers can support, and benefit from, a new source of renewable energy in Montana.

The lead communities, like many local governments and businesses across the country, have made climate commitments that are more ambitious than their state government or utility. Green power programs like ours are a proven tool to bring new renewable energy to the grid on an accelerated timeline. These programs are designed to meet the clean electricity goals of subscribers, without impacting other utility customers. To do so, the costs for project development and program administration are shared only among subscribers, rather than spread out across an entire utility customer base.  While this distribution of costs may result in a modest premium for subscribers, the benefits of the Green Power Program are likewise distributed only among subscribers.

The benefits of the Green Power Program to subscribers include:

• The opportunity for a range of customer classes, from residential to commercial and industrial, to achieve their 100% clean electricity goals.
• The ability to pay off the upfront cost of developing new renewable energy over time through subscription rates. This removes the barrier of upfront costs that can often limit the investment in the clean energy transition.
• A subscription rate that incorporates the financial value of the clean electricity generated through the program as a credit towards the program costs. This rate design could result in potential bill savings.
• The ability to invest in a meaningful addition of utility-scale renewable energy onto the grid that would not have been built otherwise. This first phase is capped at a size of 50 MW which is 1000 times larger than the 50 kW limit for net metered systems.

While this program may result in a modest premium, we’re confident that the program as designed would provide significant value to subscribers and needed progress towards a clean electricity future. 

It is generally true that renewable energy is cheaper than fossil fuels on a per kWh basis. The communities involved with this agreement have remained engaged with energy issues in the MT State Legislature, Public Service Commission (PSC) proceedings, and NorthWestern’s Integrated Resource Plan with the ultimate goal of accelerating the system-wide transition to clean energy. This work will not stop with the implementation of a Green Power Program, and we continue to seek partnerships to strengthen this message to the Legislature, the PSC, and the utility. The Green Power Program is a complementary opportunity for commercial and government organizations to directly invest in renewable energy to meet their climate and sustainability goals on an accelerated timeline.

The Green Power Program will result in a new renewable energy project in Montana that would not have otherwise been built. It will help accelerate Montana’s clean energy transition and bring economic benefits to the state. Adding energy storage to the project would further reduce emissions by decreasing the utility’s dependence on natural gas plants to serve customers when renewable energy resources are not available.

Qualifying Facilities authorized under PURPA have brought considerable utility-scale renewable energy resources to the State of Montana. The Lead Communities have explored a variety of opportunities to invest in clean energy. To date, the proposed Green Power Program is best aligned with our 2030 goals and guiding principles to build a new renewable resource at a meaningful scale that is available to all customer classes. We are paving the way for commercial and residential customers to voluntarily purchase renewable energy without complex negotiations with an individual energy developer. Plus, the utility will manage and administer the Green Power Program subscriptions and customers will benefit from the convenience of having the program costs and credits included on their electric utility bill. Qualifying Facilities remain an important tool to bring new renewable energy generation that can reduce system-wide carbon emissions. The Green Power Program is a complementary tool that will increase opportunities to develop new renewable energy projects and provide customers with the opportunity to purchase 100% net clean electricity.  

The lead communities support rooftop solar and the concept of community solar. They have remained engaged with efforts to promote rooftop solar installations in our communities, as well advance state policies that support local, distributed renewable energy generation. The Green Power Program is additional to these efforts, and it will not compromise net-energy metered customers.

For commercial customers, the net metering cap of 50kW is not adequate for many commercial buildings. Even if this cap were increased, some large commercial energy users are challenged to meet their energy needs with rooftop solar alone. For residential customers, rooftop solar is not available to everyone because it requires a large upfront investment, not every roof is suitable for solar, and it’s typically not an option for renters. We believe the Green Power Program will serve as a complementary option for commercial and residential customers to access clean energy.

Written public comments may be submitted by email, mail, or form: https://www.bozeman.net/departments/administration/city-clerk/public-comment 

Public comment may also be given at any public meeting.

Past program presentations with opportunities for public comment:

• Sustainability Citizen Advisory Board on Wednesday, Nov. 8.
• City Commission meeting on Tuesday, Nov. 28.

Program contact: Natalie Meyer, nmeyer@bozeman.net