PSC Commissioner Says Montana Rate Payers Were ‘Getting it in the Shorts’ Under Long Term Contracts
The Montana Public Service Commission voted last Thursday to cap the length of long-term electricity supply arrangements to just ten years, whereas a typical contract used to be about 25 years. According to Commissioner Roger Coopman, the long term contracts have been hurting rate payers.
"The rate payer has really, frankly, been taking it in the shorts, because these long term contracts are not justified" Coopman said. "A great example is what happened recently with these solar projects that wanted to rush into the state and take advantage of these standard rates that were set at $66 per megawatt hour."
Those $66 per megawatt hour rates were calculated years ago, but Coopman says that recent calculations put the cost much lower.
'We have it down to a rate of more like $31 during peak/high demand times and $23 when it is a lower demand period," Coopman said. "Solar projects were going to rush in and take advantage of old rates that were set four or five years ago that were two to three times higher than they should have been and guess who pays for that?... the rate payer."
Under the new system, contracts will not only be capped at ten years, but a recalculation is required after five years. The contract cap was pushed for by the Montana Consumer Counsel, the state’s ratepayer advocate.