For the second time in as many months, the Montana Supreme Court has said the state Public Service Commission illegally undermined a solar-power project – a decision that may clear the way for the project to proceed.
The high court’s unanimous ruling Tuesday upheld a 2019 lower-court order, which said the PSC didn’t follow the law when setting rates for MTSUN’s proposed 80-megawatt solar power plant north of Billings.
“It is clear that at nearly every step of setting the terms of MTSUN’s (contract), the PSC chose arbitrary and unlawful methodologies that resulted in deflating the economic feasibility of MTSUN’s project,” wrote Chief Justice Mike McGrath for the court.
MTSUN officials have said they hope to go forward with the project, once they get a contract agreement from NorthWestern Energy, as outlined in the court orders.
The 7-0 decision comes on the heels of a Supreme Court order last month, when the court upheld a similar ruling that said the PSC ignored federal and state law when it reduced the prices and contract terms for other solar-power projects planning to sell to NorthWestern.
Tuesday’s order applies to a single project, for which MTSUN has been trying for at least five years to arrange a contract with NorthWestern, the state’s dominant electric utility.
MTSUN had petitioned the PSC to settle the contract dispute and set a price that NorthWestern would pay for the power, under state and federal laws meant to encourage development of independent, renewable-power projects.
A series of PSC orders in 2017 set contract terms and rates that not only made it impossible for the project to succeed financially, but also violated the renewable-power law, MTSUN said.
The company then sued the PSC and won a decision in state District Court last year, setting a more favorable rate and contract term.
The PSC and NorthWestern appealed that ruling to the Montana Supreme Court.
In its decision Tuesday, the Supreme Court said the five-member PSC, all Republicans, ignored both the law and the PSC staff’s recommendations, and instead relied more on commissioners’ political views about energy development.
“It is indisputable that the PSC’s methodologies chosen, combined with the reduced contract length, had the effect of discouraging development of MTSUN’s project, which is contrary to (the law),” McGrath wrote.
Although Tuesday’s decision was unanimous, Justices Jim Rice and Laurie McKinnon – who dissented on last month’s solar-power decision – said they still have concerns that overriding the PSC in these cases could lead to higher power rates for consumers.
“I believe the unfortunate consequence of this decision will likewise be to significantly increase the costs for provision of power that will ultimately become the burden of ratepayers, in excess of, and therefore in violation of, the intention of Congress under (the renewable power law),” Rice wrote.
Rice and McKinnon said they felt the August solar-power decision had set a precedent they had to follow.