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HomeMy WebLinkAboutBozeman City Commission Folder_NorthWestern Energy GPP_20260721Green Power Program: Lead Community Agreement Bozeman City Commission Natalie Meyer Sustainability Program Manager City of Bozeman Today’s Agenda •The Big Picture: Why establish a Green Power Program (GPP)? •Guiding Principles Behind Montana’s GPP •Timeline and Process: Where We’ve Been, Where We Are Now, Where We’re Going •Impact of Approving the Lead Community Agreement •Future City Commission Steps The Big Picture The Green Power Program is a key strategy to reach 100% clean electricity, especially considering limited options in Montana, i.e., •No renewable or clean energy standards; •Net energy metering cap; •No enabling legislation for community solar; and •Limited customer options for new clean energy through NorthWestern in its service territory. What Is A Green Power Program? An option for customers of regulated utilities to buy power from newly developed renewable energy sources through a special rate (“tariff”) on their utility bills Impact of voluntary clean energy deals •Commercial buyers have added 143.8 GW¹of clean energy in the US •Estimated 370 GW²of installed clean energy in the US •Voluntary deals represent up to 40%of installed clean energy 1.CEBA: https://ceba.org/programs/deal-tracker/ 2.ACPA: https://cleanpower.org/resources/clean-power-quarterly-market-report-q1-2026/ Guiding Principles 1.Develops new, utility -scale renewable energy in Montana 2.Program rates, contract terms, and eligibility requirements are as accessible and attractive to as many customers as possible 3.Program does not negatively impact non-participating customers GP1: New, utility -scale renewable energy •New solar or wind resource , potentially paired with storage, located in Montana •Size will be capped at 50 MW for the initial phase of the program •The resource will be owned and operated by NorthWestern Scale of renewable energy resource •50 MW =1,000 times the 50 kW net energy metering cap •For a hypothetical wind energy resource: 10%closer to our clean electricity goal 35% of commercial electric load subscribes ≈ 8.2 MW 50% clean electricity offset ≈ 45.5 MW Bozeman community electricity = 326,777 MWh GP2: Accessible and attractive •Contract terms and eligibility: •All local government, commercial, and industrial NorthWestern Energy electricity customers may participate for the depreciable life of the project •Residents in participating jurisdictions will have the ability to opt-in for short-term subscriptions •Participation is completely voluntary GP2:Accessible and attractive •Program rates •(Fixed costs) –(Floating credit) = Subscription rate •Floating credit based on the market value of the electricity produced, plus capacity credit •Early modeling indicated a modest premium •Expiration of clean energy tax credits may have a significant impact on program economics GP3:No impact to non-participants •Cost of the project will be incorporated into the subscription rate •The program design ensures that the program costs are fully recouped from program subscribers Additional Provisions •Process for PSC approval, commercial and industrial recruitment, and RFP issuance •Opportunity to participate through the depreciable life of the project, with the option to extend •Names communities as lead marketers of the program •Agreement to collaborate on future projects •Retirement of renewable energy certificates (RECs) on behalf of participants Where We’ve Been Dec. 2019 Provisional goal of 100% clean electricity Dec. 2019 June 2020 Missoula MOU with NorthWestern Energy signed Feb. 2021 Dec. 2020 100% clean electricity adopted under the Bozeman Climate Plan Green Power Program Design PSC directs NWE to explore green tariff Interlocal between Missoula County, Cities of Missoula, Bozeman, Helena Jan.2024 Green Power Program Term Sheet Approved Where We’ve Been Dec. 2019 Provisional goal of 100% clean electricity Dec. 2019 June 2020 Missoula MOU with NorthWestern Energy signed Feb. 2021 Dec. 2020 100% clean electricity adopted under the Bozeman Climate Plan Green Power Program Design PSC directs NWE to explore green tariff Interlocal between Missoula County, Cities of Missoula, Bozeman, Helena Jan.2024 Green Power Program Term Sheet Approved Summer 2026 Le ad Community Agreement Approval What is the Lead Community Agreement? •The Lead Community Agreement (LCA) outlines roles and responsibilities for the Lead Communities and NorthWestern to bring the GPP to the Public Service Commission (PSC), including: •RFP design and process specifications •Each community signs its o w n LCA with NorthWestern •Then, the Lead Communities and NorthWestern jointly file the GPP Tariff * rate structure with the PSC * “Tariff”: formal term for an approved rate structure. Additional Provisions •Lead Community Agreement Includes: •PSC filing date on or before September 15, 2026 •City of Bozeman municipal non-binding Notice of Interest with expected load commitment •9,622,880 annual kilowatt hours (akWh ) Where We’re Going Green Power Program Design Jan. 2024 Green Power Program Term Sheet Approved Where We’re Going Green Power Program Design Jan. 2024 Green Power Program Term Sheet Approved Summer 2026 Le ad Community Agreement Approval -Roles & Responsibilities -RFP Design & Process Where We’re Going 2026 Joint Tariff filing at PSC Green Power Program Design Jan. 2024 Green Power Program Term Sheet Approved Summer 2026 Le ad Community Agreement Approval -Roles & Responsibilities -RFP Design & Process Where We’re Going 2026 Joint Tariff filing at PSC 2027 Notices of Interest submitted after PSC approval Green Power Program Design Jan. 2024 Green Power Program Term Sheet Approved Summer 2026 Le ad Community Agreement Approval -Roles & Responsibilities -RFP Design & Process Where We’re Going 2026 Joint Tariff filing at PSC 2027 RFP p rocess 2027 Notices of Interest submitted after PSC approval Green Power Program Design Jan. 2024 Green Power Program Term Sheet Approved Summer 2026 Le ad Community Agreement Approval -Roles & Responsibilities -RFP Design & Process Where We’re Going 2026 Joint Tariff filing at PSC 2027 RFP p rocess 2027 Notices of Interest submitted after PSC approval 2028 Subscription Agreements submittedGreen Power Program Design Jan. 2024 Green Power Program Term Sheet Approved Summer 2026 Le ad Community Agreement Approval -Roles & Responsibilities -RFP Design & Process Where We’re Going 2026 Joint Tariff filing at PSC 2027 RFP p rocess 2027 Notices of Interest submitted after PSC approval 2028 Subscription Agreements submitted 2028-2029 Compliance filing with PSC Green Power Program Design Jan. 2024 Green Power Program Term Sheet Approved Summer 2026 Le ad Community Agreement Approval -Roles & Responsibilities -RFP Design & Process What‘s Entailed? Commits the City? Financial Decision? Lead Community Agreement (LCA) & Submit Notice of Interest (NOI) (current step) -LCA: Ro le s & Responsibilities, RFP Design & Issuance -NOI: Non-Binding Load Information Ye s-File Tariff at PSC with NorthWestern, Missoula City/County-RFP Cost Recovery (if LCA is terminated) Ye s-RFP Cost Recovery (if LCA is terminated) Future Costs “As Needed” shown below File Tariff at PSC -Commission-Approved Program Design No As Needed-Legal Representation, Technical Expertise Costs Recruit Subscribers to Submit NOI -Non-Binding Load Information that Informs RFP No As Needed-Subscriber Engagement Approve Subscription Agreement -Binding Subscription for the Life of the Project Ye s-To Purchase Energy Ye s-New Electricity Rate FUTURE CITY STEPS Recommended Motion I move to recommend that the City Commission authorize the City Manager to sign the Green Power Program Lead Community Agreement with NorthWestern Energy and administratively approve future minor changes. Thank you! Q&A