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EXPLANATION OF I-180
80% renewable electricity: To reduce atmospheric CO2 levels that are heating up the earth, I-180 will take Montana’s investor-owned utilities gradually to 80% renewable electricity by 2050. It will increase renewables from the present 15% to 19% by 2018. Between 2019 and 2025 renewable energy provided by investor-owned utilities will increase by 3% per year. From 2026 through 2040 renewables will increase by 2% per year. From 2041 through 2050 renewables will increase by 1% per year. A higher percentage of transition is required initially to coincide with the ability to take advantage of renewable energy tax credits which are being phased out.
Benefits of 80% section: The gradual increase over 33 years will allow utilities to plan and to depreciate their fossil fuel generating assets. It will allow fossil fuel work forces to be downsized gradually as a result of retirements and other labor transitions. It will reduce atmospheric CO2 to levels the overwhelming majority of climate scientists deem necessary to limit man-caused climate change. And, because it will require 50% renewables by 2030, it will help meet America’s Clean Power Plan. Whether this will be enough depends on what happens regarding electricity exported from Montana.
Displaced fossil fuel workers section: I-180 will provide for up to 2 years of retraining with full unemployment benefits plus an additional 20% of those benefits for displaced fossil fuel workers employed by coal mines, power plants and railroads. And it will make up any deficiency in a pension payments promised to workers by defunct coal mines or fossil fuel generating plants.
Effect of I-180 on jobs: Approximately 1300 coal miners work in Montana. Twenty-three percent of the coal they mine goes to produce electricity in Montana. So gradually, by 2050, 80% of the 23% of mining jobs will be affected by this initiative. Many of the other coal mining jobs will be affected by the transition away from coal generated power in surrounding states and countries.
Approximately 500 workers toil in Montana’s coal generating facilities. Between 30 to 100 railroad workers haul coal here. Much of the power they produce or haul goes out of state. Thus, approximately 23% of 1900 jobs, that is, a total of 437 jobs will be lost by I-180 over 33 years.
Tax to pay for displaced worker benefits: To pay for increased benefits to displaced fossil fuel workers I-180 levies a fair tax on all electricity production — that produced by the wind and sun as well as by fossil fuel. The tax will be paid by all Montana electricity consumers as well as out-of-state consumers to whom Montana plants export electricity. It will cost consumers who use 1000 kilowatt hours of electricity a month (i.e., more than the average user) $2.40 a year ($0.0002/kWh) for the 5 years it is levied. Then the tax will cease unless it is re-levied for short periods to pay for worker benefits. The fiscal note projects that $20.3 million will be raised to support these benefits through 2021.
Effect on other Montana jobs if we fail to curb CO2 emissions: Climate change already affects jobs in Montana’s agriculture, skiing, fishing, health, and tourism industries and jobs elsewhere. For example, in Syria a 4 year prolonged, unusual drought destroyed many Syrian farms and fueled civil war. It’s a war like those our defense establishment warns we can look forward to in other countries as global warming gets worse. The World Bank and others project millions of climate migrants worldwide (like those from Syria) as sea levels rise, storms get more violent, wild fires become more prevalent, and deserts expand if we do not address global warming. So, it is fair to expect us all to pay $2.40 a year, etc. (that is, a tax of $0.0002/kWh) to bring climate justice to fossil fuel workers displaced because we need to have them shift jobs to bring climate justice to our other neighbors on this planet.
Replacing Montana’s Coal Severance Tax: I-180 also levies a small electricity production tax to replace Montana’s Coal Severance Tax revenues. That revenue will dwindle gradually. So, the replacement tax will rise, as coal use declines. To start, consumers (using 1000 kWh of electricity) will pay $0.26/year to replace Coal Tax revenue. The replacement tax will rise gradually to $6.36/year in 2050, (that is, a top tax rate of $0.00053/kWh of electricity produced). While it is difficult to match replacement taxes with the revenues to be replaced, the fiscal note projects the tax to supplant declining coal severance tax revenues, will increase the 2017-2021 general fund by an average of $65,805/year more than the coal tax would have produced during that period.
Economic benefits of I-180: Since contracts for solar and wind generated power are already being signed for less than coal-generated electricity, the savings from eliminating the fossil fuel costs presently charged utility consumers are expected to be much greater than the taxes needed to protect displaced fossil fuel workers and replace lost Coal Severance Tax Revenue.
Limit on costs of transition to clean energy: I-180 carries a cap limiting the cost of transitioning to renewable energy to not more than 2% increase in electricity prices. This is similar to the language in Colorado law which is working well and not preventing installation of renewable energy in all Colorado utilities required to meet that states’ 20% and 30% renewable energy standards which are higher than Montana’s current requirement.
Electric Co-op provisions: There is no mandatory requirement that rural electric cooperatives, and municipal electric systems meet the renewable energy standards. However, I-180 requires them to poll their members every 4 years to see if they want to comply voluntarily. Cooperative utilities must offer clean power at market prices to their members. In addition, the initiative imposes some restrictions on new energy supply contracts so the practice of locking-in dirty power for years will be curtailed.
Protections for those lease purchasing renewable energy systems: Likewise, I-180 carries contractual protections so that those lease-purchasing residential and business renewable energy systems will not be surprised by having to buy their rooftop solar systems more than once. This avoids the practice of current investor owned utilities who have manipulated deregulation and reregulation so that Montanans have had to pay for utility property more than once. In the past that has created a cash cow for utility insiders and their financiers, which legislators and regulators have failed to curtail.
Consumer participation in transition: I-180 revises the definition of “community renewable energy projects” to allow more participation in the transition to clean energy by residential energy customers, school districts, and communities wishing to reduce their energy bills. However if despite this change, utilities persist in keeping the benefits of sun and wind power to themselves, judicial clarification or further changes in the law may be needed to produce the intended effect of facilitating consumer generation of distributed energy.
Other benefits of I-180: If Montana expects to sell power outside of Montana it must meet the renewable energy standards already enacted in 21 surrounding states. Failure to have a greater than 15% mix of renewably generated electrons on the grid will prevent electricity sales to states like California, Oregon, Colorado, Minnesota, Utah, Nevada, New Mexico and Kansas. If Montana industry expects to compete with countries (like Denmark, Germany, Iceland, Sweden, Costa Rica, and China) and states (like California, Texas, Minnesota, and Iowa) that are eliminating more and more fossil fuel costs as a component of their energy prices, we will have to keep pace by installing more renewable energy generating capacity. Otherwise energy prices will help make Montana products uncompetitive.
Effect of I-180 on NorthWestern Energy: NorthWestern says 44% of its current generation comes from its hydro facilities (which are not “eligible renewable resources” under current law) and 13% comes from “eligible renewable resources” (mostly wind turbines). This initiative is written to preserve the requirement that pre-2005 hydro resources which have been supplying clean electrons for a century are not included in the definition of “eligible renewable resources” until the combination of pre-2005 hydro resources and “eligible renewable resources” reaches the target of 80%. When NorthWestern adds the required 23% more “eligible renewable resources” needed by 2025 to reduce CO2 emissions, the combination will reach 80%. At that time NorthWestern will be able to count its pre-2005 hydro resources for purposes of demonstrating compliance with the 80% standard. Any other construction would not benefit consumers while also reducing CO2.
Interim legislative committee: I-180 creates an interim legislative committee in 2021 to review the law and procedure set forth in the initiative and adjust it if need be.
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Page updated 2/16/2016