Clean energy gains momentum in Montana
MEIC's Derf Johnson walks us through the current state of affairs
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Hey Chat House readers—this is the final newsletter of 2023. Happy waning days of Hanukkah, Merry Christmas and Happy New Year. See you in 2024!
As momentum builds across the world for new technologies and policies to reduce greenhouse gas emissions, clean energy advocates in Montana had reasons for both optimism and concern this year.
On one hand, Unit 4 of the Colstrip coal plant got a second lease on life, and the state legislature passed bills that restrict cities’ ability to embrace renewable energy sources.
Yet at the same time, climate-related funds attached to the Biden Administration’s landmark Inflation Reduction Act (IRA) began to go into effect, two utilities companies announced a plan to build a new transmission line from eastern Montana to South Dakota—which will boost Montana’s ability to export clean energy—and Puget Sound Energy announced the construction of a new wind farm in the state. Furthermore, the youth plaintiffs in Held v. Montana won their case in district court. While the ramifications of the case remain unknown, Held nonetheless reiterates and reinforces Montanans’ constitutional right to a clean and healthful environment.
When it comes to making sense of the future of energy in Montana, Derf Johnson knows the lay of the land better than nearly anyone else. Johnson currently serves as the Deputy Director of the advocacy organization Montana Environmental Information Center (MEIC), which turned 50 this year. Over the course of his thirteen years at MEIC, Johnson has served in several other roles, including Water Program Director and Staff Attorney.
Read on as Johnson highlights his frustrations with state lawmakers’ approach to energy policy, flags some of the most promising utility-scale and residential emissions-reduction programs funded by the IRA, offers advice for discussing the economics of clean energy with skeptical audiences and much more.
Max: In the course of your career, how have you seen Montana change, in regards to energy policy?
Derf Johnson: It's become really politicized. You can't necessarily have a conversation about the realities of energy and energy markets in places like the Montana Legislature. It's a vacuum that is unwilling to look at some of the major shifts that are happening and continue to stick their heads in the sand. And you can't craft good policy if you're not starting from a realistic baseline.
The first time I lobbied I think was 2007, and that was the end of some of the more moderate Republicans on energy, and just moderate in general. Now you get lawmakers who are opposed to clean energy simply because they think it's a conspiracy, or that it's not gonna work; nothing reality-based.
It can be frustrating because there's a lot of tax money, there's a lot of jobs, there's a lot of potential there; they’re cutting off the nose to spite the face.
Another thing I’ve seen is that—regardless to some extent of what the legislature's done or planning to do—the energy markets are responding and changing really rapidly. It's actually quite phenomenal. Just yesterday I was looking at a internal memo from the Public Service Commission, looking at NorthWestern Energy and both the energy supply that they received in 2022 from different sources as well as the costs of those energy sources. And one thing that really stuck out to me was solar plus wind has surpassed Colstrip [coal plant] energy production for NorthWestern Energy.
That trajectory is only going to grow.
Did that wind and solar data apply to Montana specifically, or company-wide?
That is Montana, specifically.
Over the past 12 years of my work, we've gone from roughly 50% of the United States' energy portfolio coming from coal to 17 or 18%.
We've seen Colstrip Units One and Two shut down. We've seen the Corette station in Billings shut down. We've seen Lewis & Clark station over in far eastern Montana shut down. And yet, the lights still turn on.
One of the big arguments [against renewables] is reliability—grandma's gonna freeze in the dark, et cetera. Those are certainly concerns that need to be addressed and evaluated, but aren’t nearly the engineering hurdle you'll hear NorthWestern make it out to be.
Do you see the work you're doing as partisan in nature?
I would like to think no. If you want to argue affordability, it's clean energy, right? It's just the cheapest stuff out there. It’s more affordable than natural gas, more affordable than coal. It's taking over the market in terms of capital expenditures. In terms of new builds for new energy sources [across the country], it's almost all wind and solar at this point.
A big part of [this resistance] is cultural: coal mining has been how America powered itself for a long time.
But now some of those chickens are coming home to roost in terms of climate impacts and the costs of continuing to rely on the resource. I haven't yet heard a good non-partisan argument for planning to transition from coal to clean energy and from natural gas to clean energy in the Montana Legislature. In the quiet conversations, most folks, if not a majority, get it. They see the opportunity. But there doesn't really seem to be much in the way of leadership to [enact this change].
Colstrip exports to the Pacific Northwest; those customers are looking for a clean source of energy. There’s the old adage, “Give the customer what they want. The customer's always right.” We have that opportunity here if we craft policy correctly. Montana can do so, certainly within a conservative frame of view. I mean, if you're just looking at the competitive economics, clean energy is leaps and bounds ahead of other sources. Look at Iowa, look at Texas; the wind energy in those two states is just going gangbusters.
It might take another decade, but I do think that it's going to click for some of the more conservative members of the legislature [to embrace these] jobs and opportunities and get with the times.
Economics trumping ideology, at a certain point?
Yeah, I think that's a big part of it. A lot of these folks—and it's fair—want to see proof, right? They want to see the facilities providing jobs and tax revenue, et cetera; seeing solar farms and wind farms producing energy and sending money to their local tax base.
Two utilities companies, Allete and Grid United, announced a plan in January to build a new transmission line that connects North Dakota to Colstrip. What’s the significance of that project?
Transmission is very complicated, and I don't even pretend to be an expert on it (laughs). But what I can tell you is that transmission is [currently] balkanized into different systems. One of the significant things about that particular line is it's going to tap into that Midwest transmission system to allow a larger degree of energy sharing.
That is really what we need, in terms of building out renewables: more transmission. It [helps] markets address a lot of the reliability issues that are faced by clean energy resources, and [allows you] to move energy really fluidly across the grid through different energy systems.
That's just one of a whole bunch of projects that we would love to see. That particular project would allow for Montana energy to travel east. Right now, most of our customers—if you look at it that way—are on the West Coast.
[The Pacific Northwest] has a summer peak and a winter peak in terms of energy demand. Their wind energy is gangbusters during the summer, but the winter, not so much. Montana has a really strong winter wind energy resource that would able to compliment those slower periods of time for those states. And so tying that grid together, having a more distributed and broader area to draw from, is what needs to happen to create those competitive markets.
How are Inflation Reduction Act funds being implemented in Montana?
It's probably too early to say at this point. It’s so big—billions and billions of dollars—and the real stuff doesn't kick in until this coming year. It's everything from transportation to small-scale solar to massive utility projects.
There's a lot of different programs that need to be implemented by the state. I think that the state could be a little better about being on top of implementing some of these things. But it's a tough ship to turn.
I'm excited personally about the heat pump benefits; they'll potentially be available next year. Heat pumps are one of the best ways we can reduce [emissions] across the country, and do so in a really effective and cheap way. But that's also an example of where the state needs to come up with regulations and a program to administer it.
And then there's utility-scale projects that benefit from clean energy production tax credits. And my understanding is that there's a lot of excitement in rural Montana for that particular program [because] the IRA implemented something called Direct Pay, which will allow for non-profits and government entities such as tribes, and co-ops, to directly receive funding for building out [clean energy projects]. With such a large amount of Montana's energy load being served by co-ops, that's pretty darn exciting.
Is the heat pump policy a tax rebate for residential installation?
Yeah. My understanding is it’ll be up to $8,000 per household in tax credits.
But there hasn't been a dime spent yet because the program's been really slow. And not just in Montana, but across the country.
Anecdotally, I’ve heard folks say that Montana's generally too cold for heat pumps to be effective here. Do you buy that argument?
I think that's increasingly not true. I still think there are times and days when you're going to need a backup system, but they are getting more and more advanced to [better] operate in colder weather. They're incredibly efficient—three times, four times as efficient as some other systems.
Housing developers have been digging wells to provide water to new homes, and the issue has gotten a lot of attention recently. What do you feel like is at stake right now with that policy?
There's a lot of people who are buying homes who don't fundamentally understand what it is they're buying. They're not provided with the full picture of the risk associated with an exempt well.
That's really problematic. Here's the deal: Montana's going to get drier and we're going to have less water available and it'll be at different times than we're accustomed to, both because we have an increasing population and we’ve got a climate that's heating up.
Exempt wells don't have the same water rights protections or guarantees as an actual water right; not just that you're gonna have water available, but also water quality. There's a lot of pollutants that come from having a well, depending on where you're located.
If a developer builds a 100-500 home subdivision and just punches a bunch of straws into the ground, that does not guarantee that community is going to have water. It also has really bad land-use implications, because exempt wells often come with septic systems. And in order for a septic system to have the appropriate drainfield, the lots often have to be an acre or larger. And so you get these really spread-out lots that screw up a lot of land in order to accommodate the necessary spacing for the septics and the wells.
Before we wrap up: what advice do you have for readers who are looking to discuss energy policy and climate change, writ large, with folks who may be less than amenable to having the conversation?
Start where people are at and talk about real impacts. A lot of conservatives approach climate change with the mindset of either, they don't believe in it—which I'm not sure there's much room to have a conversation [around]—or that it's going to be too expensive to address. That's just not true.
Provide them with the numbers on clean energy. Unsubsidized clean energy is just plain cheaper than a lot of other energy sources at this point. In addition, not doing anything and continuing to conduct business as usual will [result in] piled-on climate catastrophes that just exacerbate and are expensive. We're already seeing it in Montana with wildfires or not having enough water in Flathead Lake. Those issues are only going to get worse.
This conversation has been edited for length and clarity.
Thanks so much for being here. In the meantime, you can always reach me via email, the comment section below, or on the Elon Machine, @SavageLevenson.