Court Opinion

ID: 4567755
Source: CourtListenerOpinion
Date Created: 2020-09-22 19:06:55.981488+00
Date Added: 2024-06-11T09:26:56.958921
License: Public Domain

09/22/2020

                                 SYNOPSIS OF THE CASE
                                                                                            Case Number: DA 19-0363

2020 MT 238: DA-19-0363, MTSUN,LLC, Applicant, Petitioner and Appellee, v. THE
MONTANA DEPARTMENT OF PUBLIC SERVICE REGULATION, MONTANA
PUBLIC SERVICE COMMISSION, Respondent and Cross-Appellant, and
NORTHWESTERN CORPORATION, D/B/A NORTHWESTERN ENERGY,
Intervenor, Respondent and Appellant, and THE MONTANA CONSUMER
COUNSEL,Intervenor.'

The Montana Supreme Court has overruled the Public Service Cornmission's (PSC)
rejection of a proposed development of an 80 megawatt solar energy facility near Billings,
Montana.

In a 7-0 decision, the Justices upheld a lower court decision that ruled the PSC had violated
both federal and state laws by rejecting an agreement MTSUN, LLC proposed to
NorthWestern Energy for the developrnent. Further, the Court ruled that the PSC had
exceeded its authority by "upending" the terms agreed to by NorthWestern and MTSUN.

On December 23, 2016, MTSUN filed a petition with the PSC to determine that
NorthWestern had a legally enforceable obligation with the developer to go forward with
the purchase. The PSC ruled there was not an enforceable agreement and went on to alter
the terms of the proposal, including the provisions that both parties had previously agreed
to accept.

The federal Public Utility Regulatory Policies Act(PURPA)precludes state regulators like
the PSC from using discriminatory practices against developers of energy that are
alternatives to the use of fossil fuels. The PSC must give solar and wind developers the
opportunity to compete on a level playing field with existing forms of power being used
by the utility. Smaller projects like MTSUN's 80 MW plan can negotiate directly with
utilities for the sale of the power and only need to go to the PSC ifthe parties are unable to
fully agree.

The Supreme Court agreed with the District Court that the PSC violated the requirements
of PURPA and state law precluding discrirnination against solar energy projects and that
the terms of the submitted proposal should have been approved.

The Court held that there was an enforceable obligation and that "clearly, MTSUN's
difficult and drawn out negotiations with Northwestern and its eventual petition to the PSC,
sufficiently demonstrated a commitment to the development of its proposed project to
establish" an agreement to go forward. The Court also held that the PSC exceeded its

   1 The Court prepared this synopsis for the reader's convenience. It constitutes no part of the
Opinion of the Court and may not be cited as precedent.
authority by irnposing its own contract terms by changing the length of the contract from
25 to 15 years, changing calculations for avoided-energy and avoided-capacity costs, and
striking a contingency for potential carbon costs.

The concurring opinion notes that this challenge more properly should have been pursued
in the federal courts; however, the Montana Supreme Court's recent precedent in Vote
Solar v. PSC allowed for state court proceedings. Further, the impact of both decisions
will likely increase the costs for provision of power in violation of congressional intent in
enacting PURPA.

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