- [Anna] Coming up on a special edition of "Impact."

In the midst of an alarming winter in Montana, NorthWestern Energy's 2022 Climate Vision is getting fresh scrutiny.

- [Mary] There are no carbon reductions, and that's a real problem.

- We're well ahead of the game and I just don't feel like that's portrayed very well here in the media and the state.

- [Anna] That's next on "Impact."

(gentle music) - [Narrator] Production of "Impact" is made possible with support from the Otto Bremmer Trust, investing in people, places and opportunities in our region, online at ottobremmer.org; the Greater Montana Foundation, encouraging communication on issues, trends, and values of importance to Montanans and viewers like you who are friends of Montana PBS.

Thank you.

(gentle music) - Welcome to "Impact," our news and public affairs series, exploring issues important to you.

I'm Anna Rau.

More and more NorthWestern Energy is finding itself, between a rock and a hard place as pressure mounts for the monopoly utility to address carbon emissions.

It's also trying to balance the needs of shareholders with the rates it charges customers.

Montana PBS's Stan Parker and I teamed up for this half hour special that examines the trade-offs and their implications for our changing climate.

- [Stan] Dr. Steve Running is Montana's resident expert on climate change.

He also happens to be a world expert.

He started with a team at NASA in the 1980s, and by 2007 he was part of the United Nations Nobel Prize Winning Team, known as the Intergovernmental Panel on Climate Change.

The IPCC had gathered enough evidence over decades to show that the world is warming and greenhouse gases are to blame.

- We had this naive expectation that when we as scientists pointed out what was going on, everybody had to get real quick and the politicians had to line up at our door to ask what needs to be done.

And here we sit 20 years later and some things are going, but everybody widely agrees, not nearly the pace that's needed.

- [Stan] A 2017 climate assessment done by researchers at Montana Universities, explains just how much the climate has already changed here in Montana.

They say between 1950 and 2017, average temperatures have risen, two to three degrees Fahrenheit and could reach nearly 10 degrees by the end of the century if emissions hold steady.

(water sloshing) One effect will be more extreme weather.

On balance, the treasure state will heat up and dry out, despite more spring flooding events.

- It isn't the temperature alone or the rain snowfall alone.

It's the net result of water balance of the system, inputs and outgo, just like your checking account.

And when you look at that, the evaporation rate is increasing faster than any rain or snowfall is.

So, we're on net getting drier, aridifying bit by bit across the state, except for the very eastern corner.

- The IPCC has urged countries to make immediate, steep, dramatic cuts to greenhouse gas emissions to limit warming.

They hope to hold the line at two degrees Celsius at the absolute worst, but the panel says even that will likely push the Earth beyond repair and that 1.5 degrees would be far better.

The world has already warmed about one degree, since pre-Industrial times.

Making electricity is the second biggest source of emissions in the US behind transportation, which means electric utilities have a central role to play.

How concerned are you with the risks of climate change?

- We see it in Montana.

Our fire season has expanded dramatically.

It used to be a Memorial Day to Labor Day thing.

And we've had fires in December and it's something we take extremely serious.

- [Stan] Brian Bird is the president and CEO of NorthWestern Energy, Montana's largest electric utility.

He joined as chief financial officer in 2003 to guide the company out of bankruptcy and has been there ever since.

As urgency about climate change mounted, the company got pressure from shareholders to take action.

- We think over time we were doing the right things, but we had stakeholders to say, "Hey, you don't have a plan."

- [Stan] In March, 2022, Bird announced the utilities roadmap to reach net zero carbon emissions by 2050.

The company touted that its portfolio already had 56% carbon free sources, which is better than the industry average, yet it still plans to keep burning coal for power until the 2040s.

The document has been controversial from the start.

- I have to say, I find it, what's the right word here?

Disappointing.

- [Stan] Longtime lawmaker and Billings resident, Mary McNally knows a little about the electricity industry.

She served on energy committees in the house and Senate for 12 years.

- I think they're trying to make the case that they do care and that they plan on doing something about it.

But the devil's in the details.

- [Stan] She's disappointed, steep emission cuts are still decades away.

In the meantime, NorthWestern plans to take incremental steps, like efficiency measures, fixing gas line leaks, electrifying their fleet of cars and installing smart meters to help manage customer demand.

- On your side of the meter, you're gonna have information.

Ultimately, we need to do a better job of rolling out that technology to you, getting you the meter now, but now we gotta get you better technology.

Then on a daily basis, you can know how your appliances are operating, what you can do to improve your energy efficiency.

- The company says new technologies, will displace carbon-intensive generation eventually, but won't be ready to stop adding fossil fuel resources, until 2035.

For what's left of emissions after 2050, they plan to buy carbon offsets.

One thing I noticed with the plan is it seems like there's a bit of kind of a wait and see, that there's a lot of placeholders for resources yet to be developed.

- Yeah, but the reason it's a bit of a wait and see, it's these dispatchable, long duration resources that aren't yet developed.

We're going to get there, but honestly, it is gonna take time.

- [Stan] Bird sees potential in small modular nuclear reactors, hydrogen and better storage.

But for now, he says fossil fuels make up for the fact that wind and solar are intermittent resources.

- And when the wind's blowing and the sun's shining, we actually have more energy than we need and we can sell that excess energy into the marketplace and provide that benefit to our customers.

But on those days when it's not, I'm sure glad we have our fossil fuel resources, every one of these resources has their pros and cons.

But the one I'd say the best is hydro 'cause it's clean and it's reliable.

That's my favorite.

- [Stan] McNally and other critics look at bold steps, taken by other utilities to cut carbon and wanna see more of that.

- Until Colstrip is shut down there are no that I can see in here, there are no carbon reductions.

And that's a real problem.

I mean, so it's not that they're not sincere, but I don't see a roadmap for really getting there and I just see more carbon.

- [Stan] The net zero vision shows NorthWestern expects its greenhouse gas emissions to gradually increase, until 2030 before starting to come down.

Driving these emissions, will be the company's new 175 megawatt, gas-fired Yellowstone County Generation Station, which will come online in 2024.

In 2026, it will double its ownership of Colstrip units three and four, adding 222 megawatts at no purchase cost.

Natural gas plans, emit about half the carbon that coal plants do.

- I'm I guess, a world expert on the global carbon cycle.

And the worst thing humanity is doing right now is burning coal for electric power.

And I state that worldwide, it's the highest single carbon emission point of everything humanity does.

It's still going up in Southeast Asia, China, India, Indonesia and every time I look at the "Annual Global Carbon Budget Report" and just shows coal emissions just continuing to go like this, and I just think, "We're not gonna get out of this.

"We, the great we of humanity "is not gonna get out of this until absolutely, "A number one, we quit burning coal."

- [Stan] NorthWestern says it plans to keep the coal burning in Colstrip until 2042.

- By then, we will have easily blown past 1.5 degrees, we'll have blown past two degrees and it's really too late.

- They're saying that limiting warning to 1.5 degrees and two degrees involves rapid deep and in most cases, immediate greenhouse gas emissions.

Is NorthWestern on board with this assessment.

And if so, how does that square with another couple of decades of burning coal in Colstrip?

- Yeah, I would tell you this from our plan, we're more in line with the two degree, not the 1.5 degree.

I think it's more realistic in terms of the time period of what we're trying to accomplish.

And again, it's nice to think about what ideally 1.5, but from a technology standpoint ability to get there, we think that two degree makes more sense.

- It sounds like someone could hear that and think, it sounds like you're resigned to letting the worst effects of global warming happen.

- Well, they could take that point of view of course.

My view is, again, balancing reliability, affordability and sustainability.

I'm not gonna make everybody happy.

- [Stan] Greenhouse gases are a global problem.

One utility won't solve climate change by itself, which is where international agreements and industry rules come into play.

The US Environmental Protection Agency is adding more pressure on coal, proposing regulations that would make a coal strip, install costly mercury controls and require any coal plant operating after 2039 to capture and sequester 90% of the carbon.

- I'm struggling with EPA is trying to do, and I understand their intentions are good, I truly do.

But from a serving our customer standpoint in a period of time that we're trying to electrify everything, you're trying to shut down resources, the math doesn't work.

They're saying we're gonna close 30 gigawatts of coal in 2020 down to 10 in 2030.

How can I do both of these things, like electrify this industry with fewer resources to do it?

And again, intermittent resources don't close that gap.

And so we just need policies that are realistic, not what people want to hear, but what are actually achievable with time and technology.

I wanna build the new bridge to get to something cleaner, but I'm not gonna tear down the old bridge, until the new bridge is built.

- When is that bridge end?

2035, 2043, 2050?

Climate scientists are saying that we are like at a pivotal point now, so they want to continue doing what they're doing for at least the next 20 years?

If this is a crisis does that make any sense at all?

- [Stan] Helena attorney Michael Uda is a green energy lawyer who represents mostly small renewable projects that want to sell their power to the utility.

He thinks that bridge to the future is here already.

- The installed cost of building solar and wind has dropped dramatically.

It is now cheaper to use renewables to serve load than it is fossil fuels.

- [Stan] When you look at the price per megawatt hour of different sources, renewables have been cheaper for a while.

It varies by year.

But take 2016, 2017 for example, the Montana Consumer Council, a lawyer appointed by the legislature to represent rate payers, found that Colstrip was the most expensive in the portfolio at $74 per megawatt hour.

Renewables varied between about 30 and 60 bucks per megawatt hour.

As for NorthWestern's new gas plant, the company didn't give us numbers, but an expert witness hired by the Uda Law Firm, told the Public Service Commission, his estimate was $184.21 per megawatt hour, which is in line with the normal range for gas peaking plants.

That cost has yet to be added to rate payers bills and customers are already angry, about the steep rate increase the commission just approved.

So yes, renewables are cheaper by some metrics, but NorthWestern argues its intermittency is still the kicker.

Comparing wind with the new gas plant, the utility argues they'd have to spend six times as much money on wind to achieve the same effective load carrying capacity.

And Bird points out the most expensive power of all is the power bought last minute on the open market.

- December of 22 when we had four days of no wind and I paid 900 bucks a megawatt hour for a day.

What I worry about is when that becomes more than 900 bucks a megawatt or I can't get it at all.

So, what happened this year, four days in a row of approximately 900 bucks, and I'm worried still that I might not even get it.

And can you imagine being the CEO of a company if you can't provide electricity to your customers when it's 45 below?

It's not something we take lightly.

- [Stan] Those recent four days he mentioned were a January cold snap where temperatures plunged to double digits below zero, across the state.

Critics say those high prices could be avoided by timing market purchases better.

They also say grid upgrades can help take advantage of renewable generation in other places, the wind is usually blowing somewhere they say.

And advocates like Uda also argue that fossil fuels impose costs on customers that won't necessarily end up in their bills.

- You're paying for environmental cleanups.

You're paying for updating the pollution control technology.

You're paying for whatever environmental catastrophe ensues, all kinds of collateral consequences, pretty much none of which renewables impose.

- [Stan] He also says his clients, have had an uphill battle with NorthWestern.

- We would approach NorthWestern and we'd say, "Hey, we have this really cool hybrid project, "batteries and wind and we're gonna use the wind "to power the batteries "and then we're gonna deliver that power to you "at a time when the system needs it most."

And they said, not interested.

And we had to go to the Montana Public Service Commission and force them to do it.

And in a number of cases, the commission said no too.

And so we had to go to court.

- [Stan] If you're wondering why these small renewables projects are allowed to force NorthWestern to buy their power, it all goes back to a '70s era federal law.

The government wanted to encourage a diversified energy supply, so they made monopoly utilities by power from the upstarts.

- The idea was, is that if you made utilities focus more on buying from others, it would create competition essentially, within each utilities customer base, so that the supply was not just dependent upon what choices the utilities made, but there would be alternative avenues to acquire electricity.

- [Stan] Not surprisingly, monopoly utilities fought this arrangement, further buying from these small qualifying facilities or QFs can hurt NorthWestern's bottom line, since the utility only makes money by investing in its own assets.

And Uda says NorthWestern Energy isn't as only obstacle.

The Montana Public Service Commission often makes it hard for qualifying facilities as well.

In fact, in 2020, the Montana Supreme Court ruled the PSC illegally tipped the scales against renewable developers.

The case featured an embarrassing moment of Commissioner Bob Lake and a staffer, caught on tape revealing how recent decisions, would pull the plug on solar development.

The recording first reported by "The Billings Gazette," reflects how changes to contract terms can kill projects.

- It's going to probably kill QFs developments.

- Well, the tenure might do it if the price doesn't, and honestly, at this low price, I can't imagine anyone gonna get into it.

- No, no.

- So it's gonna be, it becomes a totally moot point, because just dropping the rate that much, probably took care of the whole thing.

We're still alive.

- Yeah, but I think our mics are off, so we're okay.

- Yeah, but anyway.

- NorthWestern specifically and the Public Service Commission, each has an obligation to encourage these projects, which they're not doing and have not done for a long time.

And the only reason we've made progress is because we were willing to litigate it.

- Can you explain some of the conflict that there's been at the PSC over the qualifying facilities?

- Yeah, I think the issue has been both a question of need and a question of cost.

And I mentioned earlier that we're long energy at times and so do we need more of wind and solar when in fact customers have to pay for that?

And so it's a function of need, do we need all of these resources that are being, there's a queue of quite a few qualifying facilities.

Do we need all of those resources?

And if so, the cost structure associated with them, is it fair to customers?

Because they are rising costs.

- There is a sense in the state that NorthWestern is actively opposed renewable projects here.

- I've just added nearly a thousand megawatts since 2011 and not added one fossil fuel resources, you must be reading the media.

(Stan laughing) - Well, that's why we're here to set the record straight.

- Right and it's frustrating.

It's frustrating that we're at 60% carbon free.

We're better than California.

That's frustrating to me that this state hangs onto one coal plant and one gas plant being built and ignores everything else, ignores that our hydro system is more megawatts than those two facilities.

It's frustrating for me.

- [Stan] The hydro system he mentions is the legacy Montana Power Company system that NorthWestern bought about 10 years ago.

Thanks to that edition, NorthWestern's Montana portfolio is 69% carbon free as of 2023 with the fossil fuel additions in the next couple years, that will drop to 56% by 2026.

About half the renewables in its portfolio are from the QFs the company is required to accept.

- But I will tell you, Stan, I certainly take credit for those contracts in our calculation in our megawatt hours, so they're part of our portfolio, those contracted resources.

So, I can't say all bad things about qualifying facilities and not also respect that we get benefits from the wind and solar in our megawatt hours in our profile.

- [Stan] Bird says one technology piece is missing for renewables to play a bigger role.

- I would tell you that the future is long duration storage.

That is the perfect compliment to intermittent resources.

If you can do that, you can keep adding wind and solar.

We'll take more wind and solar if you can then store it for longer durations.

- Bird says the utility is starting to take a closer look at options, like pumped hydro, where water is pumped uphill when energy is abundant and then flows downhill to spin turbines when it's needed.

And for utility scale batteries, today's varieties can only last a few hours at a time.

Those that can last days are just now beginning to hit the scene.

But Uda isn't convinced there's a need to wait for new technologies before kicking the carbon habit.

- Yeah, I mean, I get their point of view and I'm not even saying that everything they're saying is wrong.

What I'm saying is on balance, it really doesn't matter.

I mean, the fact is, if we're gonna transition to a different economy, we have to start somewhere.

- [Ed] I want to take action to protect the people in places that we love.

- [Stan] Billings architect and city council member, Ed Gulick is someone who has heeded the call to climate action in his own life.

(door rattling) - To address the climate crisis, we need to be working at a variety of scales.

So, I think as individuals you make decisions about how, where you live, where your investments are gonna be made.

- [Stan] For Gulick that means energy efficiency upgrades for his home.

And if you can believe, he doesn't own a car.

Not happy with the pace of NorthWestern's transition, he also puts solar panels on his roof.

But he recognizes there's only so much that individuals can do.

- There is definitely more community-scaled action that's required.

That means you need to have organized citizenry, typically to bring those changes.

Or you have elected officials who are taking a leadership role.

- [Stan] Evora Glenn with the City of Missoula is working with Bozeman and NorthWestern Energy on one community project right now.

- The Green Power Program is really the goal is to create a new utility scale, renewable energy project in Montana and to enable regular residents, businesses, municipalities like the City of Missoula to subscribe on their electricity bills to that new renewable power.

- [Stan] The Green Power Program has been in the works for about three years, but in December they finally reached an agreement on the details.

Missoula and Bozeman will choose the 100% green project.

NorthWestern Energy will finance it and own it, and rate payers in those communities will have the option to pay an estimated 2% extra in their energy bills to support the renewable project.

- We need a hundred percent clean electricity and we need it, like I said, like 50 years ago.

So, to me it's the right thing to do.

It's time and I hope that we can continue working through this partnership to execute a program that's gonna be extremely meaningful.

- Those two communities, and I give them a ton of credit, they've set a very high target from a net zero perspective for their communities.

The problem is, if certain customers don't wanna pay more for that resource, they shouldn't have to.

So, how do we get customers to subscribe to pay more for their energy because they want it clean.

If we can set up a structure like that, we'd be willing to put that in front of the commission and put forth a green tariff and help them build.

They can decide they want wind or do they want solar.

And so we're working with those communities to try and make something that works within the rules.

- [Stan] The initial project would be for 50 megawatts, but there's an option to build more projects and add more communities across Montana if there's enough demand.

- It's not just us.

This is a global commitment, but we definitely have to do our share.

That's I think the big driver behind making that commitment is we know it's what we need to do.

And the bonus is there is so much research that shows us it's possible.

We have really clear paths of how to meet that goal, even if it's ambitious, even if it's new.

- I like to give NorthWestern Energy the benefit of the doubt that they're approaching this honestly, that they really wanna do the right thing and make a pencil out for everybody so it's feasible.

I hope so.

And that'd be an interesting then challenge to the public of, yeah, put your money where your mouth is sort of thing.

People are concerned about climate.

Okay, here's something you can do that's very tangible, right off the bat.

- [Stan] For "Impact," I'm Stan Parker, - Missoula and Bozeman constitute a large customer base for NorthWestern Energy.

They are second and third respectively behind Billings.

Once the two communities have signed a binding agreement, it will go before the PSC for approval.

If all goes to plan, they hope to have a utility scale renewable project, up and running as early as 2025.

That's all the time we have for this episode.

On the next "Impact," the monopoly system for getting donated organs to the patients who need them is rife with inefficiencies.

Something that disproportionately affects rural states.

We'll tell you what's being done about it.

And in a follow up to a story we brought you in November, we'll examine ongoing homelessness in Missoula.

How has buy-in at the city and county level helped?

(gentle music) Thanks for joining us.

We'll see you on the next "Impact."

(gentle music) - [Narrator] Production of "Impact" is made possible with support from the Otto Bremmer Trust, investing in people, places, and opportunities in our region, online at ottobremmer.org; the Greater Montana Foundation, encouraging communication on issues, trends and values of importance to Montanans and viewers like you who are friends of Montana PBS.

Thank you.

(bright music)