In the eternal battle of man vs. sun, does the PSC have what it takes to win? 

For more than 200 years now, America has struggled against the sun. Our old enemy has scorched our crops, spotted our caucasians and turned our ice sculptures into tragic metaphors. Is there no end? Must our children forever writhe beneath the pitiless gaze of that tyrant in the sky? Couldn’t we blow it up with a missile or something?

So-called experts say we cannot. We can only hope to root out the collaborators in our midst. Those who would cooperate with the sun must know that they will find no quarter in the chambers of government. To this noble end has the Montana Public Service Commission applied itself.

Last month, the PSC set a rate for the proposed MTSUN solar electricity farm: $20 per megawatt-hour over a 10-year contract. What does this mean? The federal Public Utility Regulatory Policies Act, or PURPA, requires states to promote alternative energy by regulating the price at which established utilities buy electricity from smaller producers. In setting this rate, the PSC has determined that NorthWestern Energy will agree to buy MTSUN’s solar-generated electricity for $20 per megawatt-hour for the next 10 years.

That guarantee helps MTSUN attract investors by creating the basis for a reliable earnings estimate. That’s what it’s supposed to do, anyway, under PURPA. But the $20 rate over the next decade effectively puts MTSUN out of business, when you compare it to the contract the PSC gave to NorthWestern Energy for its residential supply rate: $62 per megawatt-hour for the next 25 years.

Take that, solar energy! No more will the sun’s quislings on Earth conspire to replace our all-American power with photovoltaic socialism drawn from the very air. One is tempted to applaud the PSC for its patriotic defense of Montana’s ratepayers, who would rather pay a little more for electricity they can trust. But what if this is a false flag operation? How do we know that this isn’t just the PSC trying to win our trust, so we don’t notice that they are actually in the pocket of Big Sun?

Reader, don’t worry. Back in June, PSC Commissioner Bob Lake and rate analyst Neil Templeton put to rest any questions about where their loyalties lie in a conversation accidentally caught on a hot mic. Discussing the potential impact of new contracts on solar-power startups, Templeton opined that “just dropping the rate probably took care of the whole thing.”

“Well, the 10-year might do it if the price doesn’t,” Lake replied. “And at this low price, I can’t imagine anyone getting into it.”

One month later, MTSUN got its $20/10-year contract. Developer Mark Klein told the Billings Gazette that the project would be unworkable at that price. “We certainly cannot move forward at the current rate or 10 years,” he said. This news, welcome to patriotic ratepayers and owners of utility companies alike, shows the power of our greatest resource in America’s battle against the sun: regulatory capture.

Regulatory capture occurs when a government agency designed to ensure competition by regulating large firms acts to protect those firms instead. In this case, the federal government passed PURPA in the 1970s to encourage small solar electricity producers to compete with established companies. Recognizing the danger inherent in this plot, the Montana PSC has used its regulatory power to set rates for solar power so low that producers cannot get into the market at all. Through the magic of regulatory capture, the commission has protected NorthWestern Energy and, by extension, ratepayers from cheap electricity generated by questionable means.

But for how long? The PSC has given NorthWestern Energy the authority to price solar farms out of the electricity market for now, but we shouldn’t get too comfortable. You know the old warning: It’s always darkest just before the dawn. The electricity market is dark and quiet now, just the way we like it, but the sun is always coming up again.

Many of the solar developers whose projects have been derailed by the new rates are likely to sue, arguing that the PSC has violated PURPA by setting rates for renewable energy far below those for NorthWestern’s conventional energy supply. That’s the terrifying thing about renewable energy: It keeps coming back.

If we’re going to defeat the sun once and for all, we’ll need more than a state regulator that actively discourages competition. We need vigilance. I dream of an America that no longer bows to Big Sun. Let us all follow the PSC’s example. When our old enemy rises again tomorrow, let’s look it straight in the eye and refuse to blink.

Dan Brooks writes about politics, culture and the upside of regulatory capture at combatblog.net.

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