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State Energy Efficiency Policy Database

Montana

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Summary

Customer energy efficiency programs in Montana are provided by utilities or in selected cases by a state agency.  NorthWestern Energy, the state's largest utility and provider of electricity to 90% of the state population, funds programs through a lost revenue adjustment mechanism. Programs also receive funding from a universal system benefits charge, established in 1999, paid by all customers of competitive electricity providers and cooperative utilities (see Mont. Admin. R. 42.29.101 et seq.). The Montana Public Service Commission oversees the programs. The Montana Department of Revenue ensures all of the money is spent on qualifying programs.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

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November 8, 2013


Customer Energy Efficiency Programs

Customer energy efficiency programs are run through individual utilizes in Montana. Utilities include a universal system benefits charge for each customer meter (see Mont. Code 69-8-402). The Montana Public Service Commission reviews and approves each regulated utility’s plans for the system benefits funding. Cooperative utilities also run programs, which are approved by the local cooperative governing board. Utilities may also choose to turn their funds over to the Montana Department of Environmental Quality to administer energy efficiency and renewable energy programs. Low-income programs are also run by the Department of Health and Social Services.

Western Montana is part of the region served by the Bonneville Power Administration. Consequently, that part of the state is also included in the activities of the Northwest Power and Conservation Council and the Northwest Energy Efficiency Alliance. NorthWestern Energy is participating in a five-year smart grid demonstration project initiated by the Bonneville Power Administration with support from the U.S. Department of Energy. This project will extend through 2014.

Montana has commercial, residential, and residential low income natural gas efficiency programs implemented by the utilities and their subcontractors.  Programs were mandated by statute in 1997 as part of natural gas restructuring.

NorthWestern Energy allows customers with demand larger than 1 MW to channel their cost-recovery mechanism (CRM) funds to an escrow account that repays them on a quarterly basis for completed self-direct projects.  The annual maximum contribution is $500,000 and companies have two years to use their funds before they are returned to the larger pool of CRM revenues.  NorthWestern administers the funds but provides no measurement or verification.  Self-direct customers file annual reports with the Montana Department of Revenue.  The department publishes these reports and a public "challenge" process is provided for as the only scrutiny or review.  More information on large customer self-direct programs can be found in the ACEEE report, Follow the Leaders: Improving Large Customer Self-Direct Programs.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

Links:

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November 8, 2013


Energy Efficiency Resource Standards

There is currently no EERS in place. 

For more information on Energy Efficiency Resource Standards, click here.


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August 9, 2013


Alternative Business Models

NorthWestern Energy was granted approval to recover lost revenue in 2004 and in 2008.  A 2010 Commission Order required NorthWestern to implement decoupling. The Order was appealed in court and a settlement was reached in 2011, however the decoupling approach proposed by NorthWestern was rejected by the Commission. (Docket No. D2009.9.129 Order No. 7046i)


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August 9, 2013


Reward Structures for Successful Energy Efficiency Programs

Montana statute allows the PSC to add 2% to the authorized rate of return for demand-side management investments (MT Code 69-3-712). This incentive has not yet been approved for any utility.


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August 12, 2013


Energy Efficiency as a Resource

Following Montana Public Service Commission Guidelines, NorthWestern Energy completes an Electric Supply Resource Procurement Plan every two years. The most recent plan was filed in 2011 and stated a goal of achieving 84 aMW of energy savings over 15 years, or 6.0 aMW annually. Although energy efficiency is not prioritized within the plan, NorthWestern notes that energy efficiency programs help stabilize resource portfolio costs by reducing load.

Under Montana Code Annotated Sec. 69-8-419(2), the procurement process must evaluate "the full range of cost-effective electricity supply and demand-side management options."


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August 13, 2013


Evaluation, Measurement & Verification
  • Cost-effectiveness test(s) used: TRC, UCT, PCT, SCT
  • Uses a deemed savings database: no

The evaluation of ratepayer-funded energy efficiency programs in Montana relies on regulatory orders (Utility Division Docket No. D2003.6.77, Order No. 6496f and Utility Division Docket No. D2004.6.90, Order No. 6574e.). Evaluations are mainly administered by the utilities. There are no specific legal requirements for these evaluations in Montana, and the rules for benefit-cost tests are not specified. Evaluations are conducted for each of the utilities. Montana uses four of the five classic benefit-cost tests identified in the California Standard Practice Manual. These are the Total Resource Cost (TRC), Utility/ProgramAdministrator (UCT), Participant (PCT), and Social Cost (SCT) test. Montana specifies the TRC to be its primary test for decision making. The benefit-cost tests are required for the individual measure level for program screening, but there are exceptions for low-income programs, pilots, and new technologies.


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August 21, 2013