Montana Public Service Commission Declined to Make Declaratory Ruling

The Montana Public Service Commission declined to make a declaratory ruling incorporating climate change into its regulatory oversight of the energy sector.

A coalition of 41 businesses and nonprofits submitted a petition to the PSC in March of 2024 in the wake of a state district court finding in Held v. Montana that the state’s right to a “clean and healthful environment” incorporates a right to a “stable climate system.” 

The petition before the PSC had two parts. One asked the agency to adopt rulings “affirming its obligation to consider the adverse climate impacts of greenhouse gas emissions under the Montana Constitution and the statutory and regulatory framework governing its decision making.” The other included a specific rule giving the commission a framework for weighing the social, economic and environmental costs of different energy sources. That framework, developed by the U.S. Environmental Protection Agency, is called the Social Costs of Greenhouse Gases.

In his presentation before commissioners on Tuesday, PSC Chief Legal Staff Lucas Hamilton argued that the authority for declaratory rulemaking rests with the judicial and legislative branches, not with an executive-branch agency such as the Public Service Commission. He urged the commission to reject the declaratory ruling part of the petition. The commission has not yet acted on the other part of the petition regarding the implementation of the Social Costs of Greenhouse Gases analysis.

Even if the commission had the authority under case law and the [Montana law] to issue that declaratory ruling, the draft order before you still concludes it would be inappropriate to do so here because the right to a ‘clean and healthful environment’ exists alongside several other very important rights, including the right to pursue life’s basic necessities,” Hamilton said in his breakdown of the order.

Hamilton then discussed state laws governing how the agency considers environmental impacts, public interests and the process by which utilities identify and compare new sources of electricity generation. Adding climate to the list of considerations would “engraft additional, mandatory requirements into those statutes that the Legislature did not clearly intend,” Hamilton said.

“Instead, you should consider evidence on a case-by-case basis and determine — only in the context of cases — exactly what rights are implicated by the parties appearing in front of you,” Hamilton said. 

Lucas also flagged potential issues about creating a “very, very broad” framework for climate analysis that would be “binding against all present and potential future parties that may appear before the commission.”

“If the commission would like to do that, the proper method would be through administrative rulemaking,” he concluded. 

The commissioners discussed the petition for two minutes before voting unanimously to adopt the order PSC staff drafted rejecting the declaratory ruling request. Public Service Commission President Brad Molnar praised Hamilton’s work on the issue before cautioning his fellow commissioners that the PSC’s decision would likely land before a judge.

“This is one step. If anybody thinks that this isn’t going to court, I think they are wrong,” Molnar said. “Nationally, regionally and in the state of Montana, this is a conversation that will be going on for some time.”

Jenny Harbine, an attorney for Earthjustice who represented the petitioners in their request, nodded at that eventuality in an emailed statement issued Sept. 2.

“The PSC makes critical decisions about utility investments in fossil fuel and clean energy infrastructure that affect all Montanans,” Harbine wrote. “Under our constitution, the commission must account for the significant climate costs of its actions. We intend to hold them accountable to that requirement.”

Michael Hudson, a volunteer with Families for a Livable Climate, expressed disappointment with the commission’s “further delay” in acting on the petitioners’ request.

“We know that climate change will cost Montanans millions — in lost crops and livestock, in widespread health problems from increased wildfire smoke, lost tourism and more. The PSC regulates the single greatest source of CO2 emissions in our state, and it would make sense for them to consider its impacts,” Hudson said in the statement.