For the third time in a month, Montana’s Public Service Commission is being sued for the way it handles solar energy farms.
Cypress Creek Renewables filed the suit in Federal court accusing the PSC of violating federal energy laws intended to promote small alternative energy projects.
The lawsuit stems from the Public Service Commission’s mid-2016 decision to pull the plug on guaranteed rates for small solar projects at the request of NorthWestern Energy, which has about 340,000 metered customers in Montana.
At the time the Public Service Commission suspended the guaranteed rate, small renewable energy projects were assured a 25-year contract and a $66 per megawatt price for their power. The projects were 3 megawatts in size, each with enough output to power about 540 homes.
The federal Public Utility Regulatory Policies Act has for 50 years required states to set a price and contract lengths in order to promote alternative energy resources.
Cypress now wants the PSC to honor the price and contract lengths regulators suspended in June 2016. The solar company is relying on a Federal Energy Regulatory Commission ruling that Montana was wrong to suspend the contract and price terms.
The lawsuit comes after Cypress spent a year working on the issue with the PSC, said Steve Levitas, Cypress Creek’s senior vice president for regulatory affairs and strategy.
“We made a significant effort to resolve the matter without litigation and we regret that we were unsuccessful,” Levitas said. “But, we remain open to exploring opportunities to resolve this matter amicably with the commission.”
The Cypress lawsuit identified more than a dozen projects the company contends should have received the price and 25-year-contracts suspended by the PSC. These projects were identified by NorthWestern as ones the utility felt obligated to honor, even though contracts hadn’t been signed. Later, after the PSC suspended the guaranteed contracts and rates, NorthWestern reversed course and said it didn’t have a legally enforceable obligation.
Chris Puyear, a spokesman for the PSC, said the commission disagrees with Cypress’ contention that the solar company had a legally enforceable obligation.
“The Commission disagrees with the contention in this complaint that the requirement for QF (qualifying facility) to obtain a signed interconnection agreement prior to establishing an LEO violates PURPA," Puyear said. "The Commission’s standard is less rigorous than many other states, some of which require a QF to be near the end of construction before a legally enforceable obligation can be established."