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<title>July 2005: Montana Passes Renewable Energy Legislation</title>
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<p align="left"><strong><small><font face="Arial">About The Author:</font></small></strong></p>
<p align="left"><font face="Arial" style="font-size: 9pt">Robert A. Olson is a partner in the law firm of
Brown, Olson & Gould, P.C. which maintains a nationwide practice in energy law,
public utility law and related commercial transactions.</font></p>
<p><small><font face="Arial"><font style="font-size: 9pt">He can be reached at:</font><br>
<br>
<b><font color="#0000FF">Brown, Olson & Gould, PC</font></b><br>
2 Delta Drive<br>
Suite 301<br>
Concord, NH 03301<br>
<a href="mailto:[email protected]">[email protected]</a><br>
(603) 225-9716<br>
<a href="mailto:[email protected]"></a></font></small></p>
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<p ALIGN="left"><b><u><br>
<br>
J</u></b><u><b>uly 2005</b></u><font size="6"><b><br>
Montana Passes Renewable Energy Legislation<br>
</b></font><strong>by Robert Olson and Maria Reinemann -- Brown, Olson and Wilson, P.C.<br>
</strong><font face="Arial" size="2">(<em>originally published by PMA OnLine Magazine:
200</em>5/08/01)</font><font size="6"><b><br>
<br>
</b></font>More states are joining in the national trend towards the
enactment of renewable energy legislation. Recently, Montana adopted
renewable energy legislation to promote and encourage the growth and
development of a variety of renewable energy sources.</p>
<p ALIGN="left">The state of Montana’s renewable energy portfolio standard
(“RPS”) was enacted on April 28, 2005, through the Montana Renewable Power
Production and Rural Economic Development Act (SB 415). The Act, which
became effective immediately upon enactment, requires public utilities to
produce a certain percentage of their retail electricity sales from
renewable sources. The Act establishes a graduated renewable energy standard
and requires that, in 2008 through 2009 at least 5% of the electricity sold
at retail come from renewable energy sources. This percentage is increased
to 10% in 2010 through 2014 and to 15% in 2015 and thereafter. There is no
established expiration date for the Act. <br>
<br>
Eligible renewable sources include wind, solar, geothermal, existing
hydroelectric projects with a nameplate rating of ten megawatts or less,
landfill or farm-based methane gas, gas produced during the treatment of
wastewater, low emission, non-toxic biomass, and fuel cells where hydrogen
is produced with renewable fuels. Eligible facilities must have begun
operating after January 1, 2005, and must either be located in Montana or
deliver electricity into Montana. <br>
<br>
Public utilities can meet the standards by (1) entering into long-term
purchase agreements for electricity bundled with renewable energy credits (“RECs”);
(2) purchasing renewable energy credits separately; or (3) a combination of
both. A renewable energy credit is defined as a tradable certificate of
proof of one megawatt hour of electricity generated by an eligible renewable
resource that is tracked and verified by the Montana Public Service
Commission (“Commission”) and includes all of the environmental attributes
associated with that one megawatt-hour unit of electricity production. There
is a three-month grace period at the end of any compliance year within which
a public utility may purchase renewable energy credits to satisfy compliance
for that year. If a public utility exceeds the standard established in any
compliance year, that utility may carry forward the amount by which the
standard was exceeded to comply with the standard in either or both of the
two subsequent compliance years. The carry-forward may not be
double-counted.<br>
<br>
Should a public utility be unable to comply with the Act during any annual
period (January 1 through December 31), such public utility must pay an
administrative penalty of $10.00 for each megawatt hour of renewable energy
credits that it failed to produce. The public utility may petition the
commission for a short-term waiver from full compliance. The public utility
may not recover the penalty in electricity rates. Any funds derived from
such penalties go into a universal, low-income energy assistance fund.<br>
<br>
Between now and June 1, 2006, the Montana Public Service Commission is
charged with the responsibility of establishing the alternative energy
credit program needed to implement the Act by, among other things, adopt
rules to select a renewable energy credit tracking system, establish a
system by which renewable resources become certified as such, define the
process by which waivers from full compliance may be granted and establish
procedures under which contracts for eligible renewable resources and
renewable energy credits may receive advance approval. <b><br>
</b></p>
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<p align="left"><font face="Arial">
<small>Robert A. Olson is a partner in the law firm of Brown, Olson &
Gould P.C.
which maintains a nationwide practice in energy law, public utility law and related
commercial transactions. He can be reached at:</small></font><p align="center">
<font face="Arial"><small><font color="#0000FF"><b>Brown, Olson & Gould, PC</b></font><br>
2 Delta Drive, Suite 301<br>
Concord, NH 03301 <br>
<br>
<a href="mailto:[email protected]">[email protected]</a> | (603) 225-9716<a href="mailto:[email protected]"></a></small></font>
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