Montana

State seal of Montana

Montana’s Renewable Resource Standard (RRS)—also known as a Renewable Portfolio Standard (RPS)—is intended to increase use of renewable resources in the state by establishing the minimum amount of renewable energy that the state’s electricity providers must sell in a given year. This legally-established renewable energy procurement goal gradually increases over time to meet the overall target of 15% renewable power by 2025.

The state profile below explores the design of this policy, highlighting the factors that influence the success of Montana’s RPS goals and the tradeoffs inherent to it. Once you’re comfortable with the information on this page, you can evaluate the policy’s expected viability with the RPS Feasibility Calculator. You can also use the calculator to change the policy requirements, trajectory, cost cap, and more, to see how altering Montana’s policy design affects its success.

RPS Snapshot

Overview

  • 15% of the state’s energy consumption must be from renewable sources by 2015, subject to the cost cap
  • No carve-outs
  • Explicit cost cap at 15% of alternative source price and implicit ‘cost cap’ defined by compliance payments

Carve-outs

Carve-outs can create economic opportunities in the state by introducing new or promising technologies into the market. However, these standards limit the utilities’ ability to substitute between renewable energy sources, potentially increasing the cost of the policy. Montana’s RSS does not have any minimum technology requirements.

RPS Progress

Compare the goal established in the RPS to what is being achieved.

Energy Details

Grid Mix

The following chart compares the variety of sources currently used to generate Montana’s electricity. The color of each bar is indicative of the carbon intensity of each source.

Cost Cap Details

Montana has an explicit cost cap at a 15% premium over alternative sources. Utilities are not obligated to purchase renewable power that exceeds this cost cap. Additionally, by allowing alternative compliance payments (ACPs), Montana sets an effective cap on the premium a utility will be willing to pay for renewable energy. If the renewable energy premium exceeds this cap, but is less than the explicit cost cap, the utility would prefer to meet the standard by making the lower cost alternative compliance payments. Using the RPS Feasibility Calculator you can make adjustments to the cost cap, determining how this impacts the provision of renewable power and the overall viability of the RPS.

Historic retail prices (¢ / kWh)

The above chart presents historical data from the Energy Information Administration (EIA) on the price at which residential customers can purchase electricity. Typically, states set explicit cost caps relative to the retail price (as opposed to the lower wholesale price).

Legislation

Statute

Originally enacted in 2005, and updated as recently as 2013, Montana’s Renewable Resource Standard requires that 15% of retail electricity sales in the state come from renewable sources by 2015. Although there are no technology requirements, state law does require that utilities purchase a minimum amount of power (50MW escalating to 75MW) from ‘community renewable energy projects’. The program is administered by the Montana Public Service Commission.

RPS Technical Details

PolicyDescription
Eligible Technologies Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Geothermal Electric, Compressed Air Energy Storage (From Eligible Renewables), Anaerobic Digestion, Fuel Cells using Renewable Fuels
Geographic Eligibility Generation can be located in other states as long as the electricity produced is delivered into Montana.
Percent of Total Load 66.6%
Technology Requirements None
Sectors Investor-Owned Utility, Retail Supplier
Penalty ACP of $10/MWh of noncompliance

Resources

Tools and other links

References