Montana Wind Facts

Over two thirds of Montana has excellent wind resources for the development of utility scale wind projects. However, with only 146 MW of installed wind energy capacity, Montana has lots of room for growth. Growth is coming due to extensive legislation promoting wind energy. This legislation proves that Montana is truly dedicated to helping landowners get the most out of their wind energy developments.

This legislation includes a renewable energy standard, tax credits, production incentives, production tax reductions, property tax exemptions, utility grants and loans, and a green power program. The Montana Department of Environmental Quality (DEQ) is also helping individuals assess the feasibility of investing in wind energy by providing reliable and accurate wind monitoring data on sites across the state.

Montana wind facts as of January 2008:

• Total installed wind energy capacity (MW): 146
• Current wind energy capacity under construction (MW): 19
• Total wind energy potential (Billions of kWh/year): 1,020
• Average potential power output (MW): 116,000
• Ranks 5th in US for potential wind energy production
• Ranks 16th in US for current wind energy production

Renewable Portfolio Standard

Montana implemented its renewable portfolio standard in April of 2005. The standard requires all public utilities to obtain specific percentages of their electricity from qualified renewable energy resources according to following schedule:
• 5% by 2008
• 10% by 2010
• 15% by 2015

Montana’s renewable energy standard has plans in place to stimulate rural economic development. Public utilities must purchase a certain amount of renewable energy credits and the electricity output from community-based energy developments in accordance to the following time frames:

• 2010-2014: 50MW purchased
• For every year following 2015, 75 MW must be purchased.
• Cooperative utilities and municipal utilities with less than 5,000 customers are exempt from these requirements, but those that exceed 5,000 customers must implement a renewable energy standard. The standard must promote renewable energy and rural economic development.

Financial Incentives:

Tax Credit: Five thousand dollars worth of commercial and net metering renewable energy investments are applicable for tax credits. The maximum credit is 35% of the income produced by the investment.

• The credit can only be taken against income generated by a commercial operation.
• Facilities and industries associated with the production of alternative energy equipment can apply.
• Available to those with an existing facility and to those building a new one.
• Must use the tax credit in the equipments’ first operational year.
• If the credits exceed the taxes needed to be paid, they can be applied against state taxes for 7 years following the initial operation.
• Can apply for an extension up to the 15th tax year.
• Cannot use this credit in combination with any other state energy or investment tax benefit.

Production Incentive:
The Northwest Solar Cooperative (NWSC) is offering a Green Tag Purchase program available to owners who installed their wind systems after June 1, 2002. Through December 31, 2009, NWSC is offering to purchase the environmental attributes or “Green Tags” resulting from wind generated electricity. The current price members are paid for Green Tags is $0.02/kWh. Contracts can be renewed for another 3-year term starting December 31, 2009.

Property Tax Reduction:
A property tax reduction is offered to Montana plants that utilize 1 megawatt or more of a renewable energy resource. The tax reduction is applied to the local mill levy during the first nine years of operation. This reduction applies only to taxes levied by local high schools, elementary schools, and the local government. The assessed value of the property is adjusted every five years to reflect market trends.

• Reduction of 50% of the taxable value during the first five years after an issued construction permit.
• After five years, the tax rate increases steadily until the full taxable value is reached in the tenth year.

Tax Rate based on ownership:
• Utilities are taxed at 6% of assessed value.
• Electric cooperative are taxed at 3% of assessed value.
• All other businesses are taxed at 3% of assessed value.

Property Tax Exemption:
Newly built electricity generating facilities using renewable energy resources with a nameplate capacity of less than 1 MW are exempt from property taxes. This exemption is applicable for five years after the start of the operation.

For all other facilities utilizing renewable energy resources, a property tax exemption can be claimed for 10 years after initial installation.
10-year exemption applicable for:
•Single family residential dwellings up to $20,000 in value.
•Multifamily residential dwellings or a nonresidential structure up to $100,000 in value and will be taxed on a 3.46 percent of assessed value.

Utility Grant Program:
NorthWestern Energy provides funding to its customers for wind energy projects. NorthWestern offers a maximum of $10,000 to customers, at a rate of $2 per watt. A request for proposal needs to be submitted to be approved.
Montana’s Universal System Benefits (USB) Program requires utilities to set aside funds for renewable energy developments and other energy-efficiency related activities. NorthWestern uses $700,000 dollars annually for renewable energy projects.

Alternative Energy Revolving Loan Program:
This program offers individuals, small businesses, local government agencies, units of the university system, and nonprofit organizations loans for the production and installation of alternative energy systems. The maximum loan amount is $40,000 with a repayment period of 10 years. Interest rates are set annually and are fixed for the term of the loan.

Mandatory Green Power Program:
All utilities are required to offer their customers the option of purchasing products composed of renewable energy resources.