NorthWestern Energy would have to pay about $20 per megawatt hour for electricity from a proposed 80-megawatt solar power project northwest of Billings, less than a third of the amount MTSun LLC initially sought.

MTSun proposed building the 480-acre solar farm with a guaranteed rate of nearly $64 per megawatt hour. In late November, the company rejected NorthWestern’s offer of about $43.50.

Under the federal Public Utility Regulatory Policies Act, NorthWestern is required to buy power from such renewable facilities at a rate that it would otherwise cost the utility to generate the energy. If they can’t agree on a rate, the Public Service Commission sets it.

The PSC authorized the 10-year contract Thursday, a week after voting to cap contracts at 10 years. Previous contracts could run up to 25 years.

The Montana Consumer Counsel, who advocates on behalf of ratepayers, testified the longer contracts locked in potentially unfair rates that are passed on to NorthWestern’s customers.

Developer Mark Klein said Thursday that he understands the commissioners are trying to protect consumers. However, he said short-term contracts assume power prices will remain as low as they currently are.The short contracts also make it difficult for developers to recoup their investment, he added.

MTSun proposes building a $100 million solar farm that could generate enough electricity to power about 14,400 homes at peak production, The Billings Gazette (https://bit.ly/2trL8Rz) reported.