Great Falls Tribune (Montana)
BYLINE: By, KARL PUCKETT
Members of the Montana Public Service Commission agreed on a fine of $99,120 for the utility arm of the city of Great Falls for failing to purchase state-mandated renewable energy credits.
That’s $33,110 less than the original penalty proposed by the PSC, but more than Electric City Power has available to pay the penalty, City Manager Greg Doyon said.
“The money has to come from somewhere,” Doyon said.
The money probably will be taken from pooled cash from other funds in the city, Doyon said.
Doyon informed the board of directors of Electric City Power of the fine at a meeting Monday.
The PSC originally proposed a penalty of $132,230 for the city failing to procure any of the necessary renewable energy credits for 2010.
State law requires competitive electricity suppliers to buy a minimum of 10 percent of their retail sales of electrical energy from renewable sources, such as wind. The PSC enforces the requirement. Failing to comply with the renewable energy rule results in an administrative penalty of $10 for each megawatt hour of renewable energy credit not purchased.
ECP made an offer of $99,120 to settle the matter Nov. 3.
PSC members, who are based in Helena, accepted the offer Jan. 17 after a 3-1 vote. Commissioner Brad Molnar voted no and John Vincent, Bill Gallagher and Gail Gutsche voted for the settlement. Travis Kavulla abstained from voting.
The PSC, the order says, will take no further action if ECP pays the $99,120 “within a reasonable time.”
City officials are now working to secure renewable energy credits “to make sure we don’t have to go through this again,” Doyon said. He said he did not know how much the purchase would end up costing. The city has until March 30 to buy the credits.
ECP officials had once planned to pass the cost of the renewable energy credits to customers but Doyon said that’s no longer an option because the city’s customer base now is a shadow of what it used to be. As of Dec. 31, the city had 10 customers with the city itself the largest.
ECP Chairman Bob Jones said ECP received letters from seven customers indicating their intent to quit buying power from the city.
ECP sells power to commercial and governmental customers but its losing money and faces more losses as Southern Montana Electric Generation and Transmission goes through bankruptcy. ECP purchases its power from SME, which is made up of the city and rural electric cooperatives.
At the ECP meeting, Melissa Kinzler, the city’s top fiscal officer, said the cash balance of ECP was $5.4 million in the red as of Jan. 31. ECP’s potential net loss is $8.9 million depending on the outcome of the bankruptcy case, she said.
So far in fiscal year 2012, ECP is operating at $164,294 in the negative but the electricity supplier had an operating profit of $11,949 for January.
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