Senate OKs bill to change net metering reimbursement rate

A bill aiming to change the rate at which solar and other “net metering” utility customers are reimbursed for their excess wattage received preliminary approval from the Montana Senate Wednesday.

Senate Bill 78, sponsored by Sen. Keith Regier, R-Kalispell, received a 33-16 vote on second reading.

As originally proposed, the bill would have directed the Public Service Commission to set reimbursements to those net-metering customers at a wholesale rate, which Northwestern Energy says is less than a third of its retail rate. Currently, those small businesses and homeowners who produce excess power receive credits equal to their retail rate.

A Senate committee amended the measure to instead direct the commission to set reimbursements at the utilities’ “avoided cost” rate instead. The avoided cost is the price a utility would otherwise pay for electricity from another source, such as coal or hydropower.

Sen. Dick Barrett, D-Missoula, spoke in opposition to the measure, which he said failed to provide enough direction to the commission in setting the new rate class.

“If you look around the nation at the many studies of avoided cost, those numbers are all around the map,” he said. Noting that transmission costs differ with the customer’s distance from a generating station, he added, “Should rural customers pay more than non-rural customers? That’s an important question. The bill is silent on it.”

Regier responded that his bill intentionally gave flexibility to the Public Service Commission to make those determinations.

“If we brought a bill to answer all those questions, we would get hammered because we’re not the experts,” he said.

If the Senate passes the bill on a final vote Thursday, it will head to the House for consideration.

Reporter Sam Wilson can be reached at 758-4407 or by email at

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