HomeMy WebLinkAbout10-21-20 Public Comment - J & W Swearingen - Comments on draft Bozeman Climate PlanFrom:Will Swearingen
To:Agenda; Natalie Meyer
Cc:Jennifer Swearingen; Will Swearingen
Subject:Comments on draft Bozeman Climate Plan
Date:Wednesday, October 21, 2020 11:10:24 AM
Attachments:Bozeman Climate Plan, Comments, Swearingens_Oct. 21, 2020.docx
City Commissioners and Staff,
Attached are our comments on perceived problems with the renewable energy section of the
draft Bozeman Climate Plan, along with suggested changes and solutions.
Respectfully,
Jennifer and Will Swearingen
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COMMENTS ON THE BOZEMAN CLIMATE PLAN
We appreciate Bozeman’s strong commitment to mitigate climate change and its ambitious
goals for reducing carbon emissions. As stated in the draft plan, electricity usage accounts for the
greatest share of our city’s greenhouse emissions, and our comments focus on this critically
important section, “Responsible and Reliable Renewable Energy Supply,” pp. 60-77.
The solutions proposed in this section include the following:
• (D) Increase Utility Renewable Energy Mix: Support NorthWestern Energy to meet
and surpass their 2045 goal to reduce the carbon intensity of their generation by 71%
to 0.14 MT CO2 per MWh.
• (E) Increase Community Participation in Utility Green Power Programs: Collaborate
with NorthWestern Energy to introduce a subscriber-based green tariff.
• (F) Increase Community-Based Distributed Renewable Energy Generation: Work
across the community to increase the adoption of distributed renewable energy on
public and private properties.
All of these solutions rely on NorthWestern Energy to progressively add more renewable
energy to its portfolio, phase out fossil fuel generation, support distributed generation, and
embrace “green” energy policies. However, our utility’s past and current actions raise serious
questions about its commitment to our city’s goals. The list below is only a brief summary of
some of our utility’s most concerning actions.
• NorthWestern Energy is committed to significantly expanding its fossil-fuel
generation. While our utility is portrayed as “green” throughout the document, the fact
is that NorthWestern Energy is the only utility in the country that is seeking to expand its
coal-fired generation. Hearings are now underway at the PSC on NWE’s request for pre-
approval for increasing its ownership of Colstrip Unit 4. On top of that, it is planning to
build a new billion-dollar fleet of natural-gas generators within the next five years. These
actions would more than double our utility’s carbon emissions. None of this is
acknowledged in the plan. And yet Solution D encourages our community to support
NorthWestern Energy’s efforts to “reduce its carbon intensity.”
• NorthWestern Energy has repeatedly resisted adding renewable resources to its
portfolio, slamming wind and solar resources as “unreliable” and “economically
infeasible.” An independent reviewer of NWE’s recent long-range plan found that the
utility manipulated its modeling data to reach that invalid conclusion. Moreover, NWE
has lost multiple lawsuits for illegally blocking affordable renewable energy projects,
including two cases decided by the Montana Supreme Court in just the past two months.
How do these actions square with the goal of relying on NWE to “Increase Utility
Renewable Energy Mix”?
• NorthWestern Energy has been a fierce opponent of solar energy in the legislature
for many years, as any of Bozeman’s elected representatives will confirm. Last year, our
utility spent hundreds of thousands of dollars on a biased “study” in support of
eliminating net metering in Montana, which would have destroyed our state’s growing
solar industry. (The Public Service Commission has delayed taking action on NWE’s
proposal, but says it will revisit the issue in the near future.) It has also repeatedly lobbied
against lifting Montana’s low cap of 50kW on solar systems, severely limiting solar
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capacity for schools, municipalities, and businesses. How is this history compatible with
the goal of “Increasing Community-based Distributed Renewable Energy”?
• NorthWestern Energy’s 2019 Electricity Supply Resource Procurement Plan
indicates that it has no intention of investing in renewable resources, beyond what is
required by law. It’s a complicated, technical report that most people would not care to
delve into, but its Executive Summary is written for the layperson and contains the main
points of the plan. Using scare tactics and misleading information, it insists that it must
more than double its current power capacity and that only “thermal resources” (coal and
natural gas) will meet its needs. Renewable resources are deemed unreliable. A graph on
page 7 of the Executive Summary shows declining emissions through 2038 but fails to
include any specific benchmarks and neglects to include the new carbon-intensive
generation it is planning to add to its portfolio. (Note: Links throughout the document to
NorthWestern Energy’s 2019 Electricity Supply Resource Procurement Plan are
inoperative and should be restored.)
• NorthWestern Energy continues to misrepresent the facts in its communications
with the public. In a recent op-ed in the Bozeman Daily Chronicle, Heather Bellamy,
Community Relations Manager for NorthWestern Energy and a participant on the City’s
Climate Team, stated that NWE’s portfolio “includes more wind resources than either
coal or natural gas,” but somehow failed to mention that our utility is currently planning
to significantly expand both its coal and gas generation. These new fossil-fuel assets
would dwarf NWE’s current wind generation—and would spike its “carbon intensity.”
Moreover, NWE’s owned wind resources account for only a tiny fraction of its portfolio
(51 MW, or < 2%). The lion’s share consists of small qualifying facilities that it has
fought tooth-and-nail to keep out of its system, but has been bound by federal law to
accept. The long-term contract with the Judith Gap wind facility, which expires in 5
years, has historically been NorthWestern’s strongest renewable energy asset and its
cheapest source of electricity overall, but our utility rejected a recent opportunity to bid
on the power from a new expansion at that facility. In the op-ed, Ms. Bellamy also
characterized solar energy as unreliable and expensive, neither of which is supported by
the facts. (Solar energy accounts for <1% of our utility’s portfolio.)
NorthWestern Energy has repeatedly shown by its actions that it is hostile to renewable energy.
In the plan, all of this history is completely ignored, as it endorses “supporting” NorthWestern
Energy in order to successfully reach the City’s goals. It adopts language widely used by our
utility in its communications to create doubt about the reliability and affordability of renewable
resources: “a rapid transition [to renewable energy] could potentially cause a rate shock and
increase rates,” repeated references to the need for “cost-effective” renewable resources,
emphasis on analyzing the “economic feasibility” of adding renewable generation, and the
implication that renewables are not quite ready for widespread adoption. Even the title of the
chapter seems designed to disparage renewable energy as potentially irresponsible and
unreliable. These purported issues are obstructionist. Due to advances in technology and scale of
production, renewable energy resources are now indisputably cost-effective and economically
feasible and are being widely adopted not only in our region but across the country.
Even more troubling is learning that the City of Bozeman will support policies to address NWE’s
“electric capacity shortfall,” a highly contentious issue being debated at the Public Service
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Commission. To us, it is clear that the Bozeman climate plan has been co-opted by
NorthWestern Energy. This conclusion is not surprising, given that two high-level management
employees of NWE were given seats on the Climate Team, and a member of the corporation’s
Board of Directors was engaged to help facilitate meetings. (The document fails to disclose that
Britt Ide, a member of the Consulting Team, is a member of Northwestern Energy’s Board of
Directors. This error must be corrected.)
The most concerning aspect of this section of the plan is that the City of Bozeman is lending
credibility to NorthWestern Energy’s misleading “plan” to reduce its carbon emissions.
Throughout the section on energy supply are repeated references to NWE’s “voluntary
commitment to reduce the carbon intensity of its electric portfolio for Montana by 90% by
2045.” No explanation of how that would be achieved is provided within the body of the plan.
NWE has publicly stated that Colstrip will continue to operate through 2042, and its planned new
gas-fired generators have an expected lifespan of at least 30 years. Most importantly, NWE is
using a seriously misleading metric: carbon intensity is not a meaningful measure of reductions
in carbon emissions. It is possible to decrease carbon intensity by adding renewable generation
(hydroelectric dams, for example) without reducing any carbon emissions. The city’s reduction
goals are correctly expressed in terms of carbon emissions—not the rate of those emissions. No
other utility is using the flawed metric of carbon intensity in their carbon reduction
commitments. Where did this come from?
The key to NorthWestern Energy’s carbon metric is buried in the Appendices: “NorthWestern
Energy’s carbon reduction plan presented in ‘Our Vision for Montana’ was used as the baseline
scenario. This report projects emissions reduction through 2045” (p. A6). If you follow the link
to NWE’s “report” on its vision for Montana’s energy future, you find an 8-page marketing
brochure with lots of photos and no timetable for specific transitions to renewable resources, no
quantitative analysis of carbon emissions reductions over time—only a public relations ploy with
lots of misleading statements and no substance. Most concerning, its conclusion conflates carbon
intensity with carbon emissions. That is a very serious problem. The premise of this entire
section—that our city’s electricity, purchased from NorthWestern Energy, will become cleaner
and cleaner over time—is meaningless.
The section dealing with green tariffs also poses important questions. Given that NorthWestern
Energy is unlikely to significantly increase its investment in renewable energy resources in the
near future, much falls to the alternative: a “subscriber-based green tariff.” Indeed, this is
identified as “a key strategy to meet the City’s aggressive short-term goals.” Yet very little
information is provided on how a green tariff would work or how much it might cost. According
to NorthWestern’s own slide presentation on this topic, some green tariffs are sourced from new
renewable projects and some are not. Some are simply purchase agreements sourced on the open
market and passed on to clients. Where would Bozeman’s clean energy come from? Would it
flow from an existing project, or would it flow from a new project (that is, would it add new
clean energy)? What are other cities in our region doing in this regard? Would NWE be allowed
to source some of its own existing “green” hydropower? How much (approximately) would the
tariff cost the City of Bozeman and its taxpayers? How much (approximately) would it cost
residential subscribers? Would it be affordable to low-income households? Would NWE charge
a commission on every “green” electron? Would it charge fees for brokering the deal? Most
importantly, would instituting a green tariff program—a self-imposed fee on electricity—
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actually reduce Bozeman’s carbon emissions? Or would it simply swap carbon electrons for
already existing green electrons, while putting money in the pockets of NorthWestern Energy?
These questions need answers.
It is clear that this critically important section, “Responsible and Reliable Renewable Energy
Supply,” reflects a conflict of interest between NorthWestern Energy and the City of Bozeman.
Overall, it appears that the plan relies on NWE’s “Vision” document, which itself lacks any kind
of legitimate data and no discussion of specific planned carbon reductions. That document also
fails to disclose our utility’s planned expansion of its coal generation at Colstrip, and no mention
is made of NWE’s planned new gas generation. This section on energy supply lacks benchmarks
for carbon reductions or any quantitative analysis showing how the identified “solutions” would
impact future emissions. Figure 17 (p. 16), which illustrates carbon reductions over time, lacks
any context or reference to data and is not discussed in the text of the plan. The Quantitative
Analysis in Appendix A is inadequate at best and relies on unrealistic assumptions. A review of
the notes from pertinent meetings (in Appendix B) indicates that important issues and questions
were glossed over during discussion. In sum, we find the Renewable Energy section of the plan
hugely disappointing. It will not result in meaningful reductions as it is written.
Bozeman can do better than this. The citizens of Bozeman want a sound, strong plan that reflects
our commitment to protect our climate and leave a livable planet for future generations.
Moreover, the plan created by Bozeman will become a model for other cities in Montana. It
should embrace and embody the words used to define the elements of this plan in the
introduction: bold, robust, innovative, and actionable. To that end, we offer several suggestions
for improving and strengthening the section “Responsible and Reliable Renewable Energy
Supply,” focused on reducing carbon emissions from Bozeman’s electricity supply.
• Reject NorthWestern Energy’s dishonest “carbon intensity” promise. It is not a valid
or accurate measure of carbon emissions reductions. Relying on this misleading metric
will lead to distortions in future calculations and the entire process of accounting for
carbon emissions will lack integrity. Bozeman’s plan is rightly based on reductions in
carbon emissions, not on reductions in the intensity (or rate) of carbon emissions, and that
metric should be maintained throughout.
• Set firm benchmarks for carbon emissions reductions over time. The City must chart
a course—in collaboration with our utility—with specific time and reductions targets that
are actionable and achievable. If our utility fails to hold up its end of the bargain, there
must be consequences, whether in the arena of public opinion or in the negotiation of
subsequent contractual agreements.
• Strengthen incentives for rooftop solar energy and adopt enabling building codes.
The opportunity to expand residential solar energy is huge. Systems now have a very
short payback period—often less than 8 years. What is really needed to support that
demand is subdivision design that enables an advantageous orientation and regulation
from the city to protect residents’ investments in solar systems. The City should also
advocate for the expansion of state tax credits for solar installations, which come under
attack every legislative session by NWE lobbyists. Bozeman does not need to reinvent
the wheel in this regard; many cities (and some states) are years ahead of us, and we can
learn from them.
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• Commit to “additionality” as a prerequisite for a green tariff. Paying a premium for
electrons from existing renewable projects will not lead to carbon emissions reductions. It
is essential that any green tariff be sourced from a new, local renewable project. (“Local,”
in this instance, means within our utility’s transmission area.) Transparency will be
crucial for successful adoption by residential subscribers, and the City of Bozeman
should reject any proposal, such as a “sleeved” power purchase agreement, that does not
meet the criteria of “new” and “local.” The City must also determine and inform the
public of the costs, fees, commissions, etc., related to the initiation and ongoing expenses
of entering into a green tariff contract with NorthWestern Energy.
• Enlist the assistance of independent renewable energy expertise to strengthen the
City’s position when negotiating the Memorandum of Understanding with NorthWestern
Energy. It is clear that NWE has co-opted the process thus far with the extensive
participation of management personnel and even a corporate board member guiding the
meetings. When it comes time to negotiate the MOU and the green tariff contract, the
City must be represented by an impartial, experienced advocate with expertise on green
tariffs.
• Do not allow NorthWestern Energy to force concessions on issues such as
decoupling and doubling its generation capacity. Our utility should not be leveraging
its larger policy agenda against our local interests in renewable energy, and the City must
avoid any efforts to force contingencies in the larger policy arena.
• Collaborate with Missoula and Helena to increase our clout. Whether it be our
interactions with NorthWestern Energy, or our engagement with the Public Service
Commission and state legislature, Bozeman’s voice will be stronger if we join with like-
minded cities seeking common purpose. We suggest setting up quarterly meetings to
update each other, share ideas, and strategize on our common agenda.
• Leverage the power of public opinion against our utility. NorthWestern Energy has
been getting a “black eye” from Wall Street investors. Earlier this year, BlackRock
Capital Investment Corp., the world’s largest asset managing investment firm, announced
that it was taking a close look at utilities’ plans for addressing climate change. Its CEO
told investors it would be divesting from companies earning 25% or more of their
revenue from coal—a metric that would have been hard for NWE to meet even before it
sought to expand its ownership of Colstrip. BlackRock owns one-sixth of NorthWestern’s
shares and therefore has tremendous power over its financial viability. And BlackRock is
not the only Wall Street firm setting expectations for ethical climate-related decisions by
utilities. Many of the world’s largest banks have adopted similar guidance on climate
change. Bad investment ratings cause NWE’s stock price to sink and make it harder and
more expensive to borrow funds for its ongoing operations and capital expansion. In
other words, NorthWestern Energy has an interest in portraying itself as “green,” and it
can do that by helping the City of Bozeman meet its carbon emissions reduction goals.
By providing Bozeman clean renewable energy, it receives favorable media coverage and
evidence of its commitment to climate sustainability to use in its annual report and other
marketing tools. Conversely, if our utility fails to keep its end of the bargain, it will earn
very negative press from our community, which will impact its financial viability. The
City must recognize that it has significant leverage in this bargain.
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• The City of Bozeman must become a strong advocate for climate action and the
adoption of renewable energy. NorthWestern Energy hires two full-time lobbyists for
the legislative session, and it has highly paid executive positions devoted solely to
influencing public policy related to its corporate interests. In order to compete with that
corporate agenda, which is far more interested in profits than in the climate crisis, the
City of Bozeman must devote more personnel resources to advocate for policies in
support of climate mitigation and for renewable energy development, in particular. For
decades, renewable energy advocates have been losing to NorthWestern Energy in the
legislature, as its lobbyists kill good bill after good bill. Uniting with Missoula and
Helena to create a “climate lobby” that could harness public pressure and educate
legislators and voters would be a good start. You can bet that NWE’s lobbyists have
already drafted bills to weaken net metering, water down the renewable portfolio
standard (RPS), and grant the company subsidies for its Colstrip operations. They will
also vigorously oppose renewable energy advocates’ efforts to lift the 50kW cap on solar,
to allow aggregate metering, to legalize community solar, and to institute innovative
financing for residential solar. They do it every session! And the City of Bozeman (along
with colleagues from Missoula and Helena) should be there to push back, call out
NorthWestern Energy, and fight for these critically important policies in support of
climate protection. Most important, the City of Bozeman should be participating in the
hearings going on now at the Public Service Commission on our utility’s application to
get pre-approval for its Colstrip expansion. If approved, this expansion would make the
City’s carbon emissions reduction targets more difficult to achieve. Action now is
urgently needed.
• The City of Bozeman must seize every opportunity to strengthen awareness of
climate change—in our actions as citizens and as a community. We were so pleased to
read in the October 13 Daily Chronicle about the City’s decision to expand the solar array
on the new public safety center, yet no mention was made of climate change, or the
resulting long-term reductions in carbon emissions enabled by the technology, or the
imperative to raise the 50kW cap on solar installations. There is no “controversy” about
the climate crisis, and the City must not shy away from addressing this most critical issue
with conviction and commitment.
Respectfully submitted by Will and Jennifer Swearingen, October 21, 2020