State and Local Policy Database


State Scorecard Rank



10.0Scored out of 50Updated 12/2022
State Government
Score: 1.5 out of 4.5
State Government Summary List All

The state offers several incentives for energy-efficient investments. The state government leads by example by setting energy requirements for public buildings and fleets, benchmarking energy use, and encouraging the use of energy savings performance contracts. 

Financial Incentives List All

The state of Montana offers the following financial incentives to encourage energy efficiency improvements:

  • Deduction for Energy-Conserving Investment
  • Energy Conservation Installation Credit: For the 2021 tax year, the Montana state credit remains at 25% of eligible investments, up to $500 per taxpayer. The Montana credit can be claimed each year that eligible improvements are completed. This credit ends in 2021.
  • Alternative Energy Revolving Loan Program: AERLP provides low-interest loans to individuals, small businesses, nonprofit organizations, and government entities in order to increase investments in alternative energy systems and energy conservation measures in Montana.

Further financial incentive information can be found in the Database of State Incentives for Renewables and Efficiency (DSIRE Montana). In addition to these state-funded incentives, Montana has enabled commercial Property Assessed Clean Energy (PACE) financing and has one active program. For additional information on PACE, visit PACENation.

Last Reviewed: June 2022

Equity Metrics and Workforce DevelopmentList All

At this time, the state has not taken specific steps to engage with marginalized groups in the community for the creation or implementation of its energy, sustainability, or climate action plan, and has not adopted specific goals, metrics, or protocols to track or evaluate how any energy, sustainability, or climate action initiatives being taken are affecting local marginalized groups.

Workforce Development

The state does not currently include specific measures to prioritize clean energy workforce development.

Last Reviewed: July 2021

Carbon Pricing PoliciesList All

The State of Montana does not yet have carbon pricing policies in place.

At this time, the state does not have a statewide emissions reduction goal in place.

Last Reviewed: September 2022

Building Energy Disclosure List All

There is no disclosure policy in place.

Last Reviewed: July 2019

Public Building Requirements List All

In April 2009, the legislature passed S.B. 49, creating energy efficiency standards for state-owned buildings. Energy-efficient building standards apply to new construction and major renovation projects for state-owned buildings and new construction projects for state-leased buildings. The buildings must exceed the Energy Conservation Code adopted by the state by 20%, to the extent that it is cost-effective over the life of the building or renovation.

The State Building Energy Conservation Program (SBECP) uses an internal database to track energy performance of state-owned facilities. 100% of eligible buildings with square footage greater than 20,000 sq ft have been benchmarked; information is available on the Energy Office website. The SBECP also provides free online energy tracking services to local government and K-12 schools. State building energy usage is available for public viewing.

In April 2014, Governor Steve Bullock directed state agencies to begin monitoring energy use in state buildings and to begin publicly disclosing these energy numbers online. This directive by the Governor is part of a larger commitment to smart energy use and consumption, the promotion of energy efficiency and conservation in Montana, as well as a more transparent state government.

The 2015 legislature approved High Performance Building Standards to be required of all new state buildings. Based on Section 17-7-201 MCA, and adopted under 17-7-213 MCA, the Department of Administration (through its Architecture & Engineering Division) established High-Performance Building Standards for the construction, renovation, and maintenance of public buildings in this state as well as all new state-leased buildings. These standards have been developed to improve the capacity of the state to design, build, and operate high-performance and resilient buildings. An integrated design process is used to optimize all major high-performance attributes including energy performance, flexibility, durability, life-cycle performance, enhanced indoor environmental quality and conservation of natural resources. Local governments and schools are encouraged to comply.

Last Reviewed: June 2022

Fleets List All

Per Governor Initiative, the State of Montana has been directed to meet and is currently in compliance with federal CAFÉ standards. Through the Statewide Fleet System, Montana tracks CAFÉ ratings down to vehicle specific performance in an electronic Equipment Vehicle Management System (EVMS). Further per 2-17-416 MCA all new vehicles purchased meet current CAFÉ standards, unless there is a usage requirement exception.

Last Reviewed: June 2022

Energy Savings Performance Contracting List All

The Montana Energy Office serves as the lead agency for Energy Performance Contracting (EPC). EPC provides an alternative procurement method for design and construction services that reduce facility operating costs through energy conservation improvements. EPC is an attractive financing model that uses cost savings from the project to finance the construction work, sometimes with no upfront cost. Also, all EPC projects must be completed by a qualified Energy Service Provider (ESP) whose qualifications have been vetted by the State; this helps ensure the ESP maintains a high standard of technical expertise and has sufficient financial resources to guarantee cost savings for project financing. The 2019 Legislature amended statute to better define “cost-effectiveness” of EPC projects.

Last Reviewed: July 2020

Research & Development List All

No public research centers have a focus on energy efficiency.

Last Reviewed: July 2019

Score: 4.5 out of 12
Buildings Summary List All

Montana's building energy codes are mandatory statewide. The current residential code requires compliance with the 2018 IECC, with amendments. The commercial code requires compliance with the 2018 IECC or ASHRAE 90.1-2016.  Localities are permitted to adopt stretch codes as long as incentives are provided to pursue the higher level of code stringency, however, no localities have pursued stretch codes to date.  

Residential Codes List All

Montana's residential building code, codified in ARM Title 24, Chapter 301.161, is mandatory statewide. Montana's residential code requires compliance with the 2018 IECC, with amendments. The residential code amended requirement for above grade walls to R-21 , does  not require continuous R-5 external insulation.  Blower door test amended to 4 ACH 50 , where 2018 IECC lists 3 ACH 50.  Building cavities allowed for return ducts if  ducts pass tightness test.  As listed in amendment - Exception: "Building framing cavities may be used for return ducts if there is no atmospherically vented furnace, boiler, or water heater located in the house outside of a sealed and insulated room that is isolated from inside the thermal envelope and if the duct system has been tested as having a maximum total leakage not greater than 4 cfm/SF. The room walls, floor, and ceilings shall be insulated in accordance with the basement wall requirements of Table R402.1.2."

Last Reviewed: July 2022

Commercial Code List All

Montana's commercial building code, codified in ARM Title 24, Chapter 301.160, is mandatory statewide. The commercial building code requires compliance with the 2018 IECC or ASHRAE 90.1-2016.

Last Reviewed: July 2022

Compliance List All
  • Baseline & Updated Compliance Studies: The most current study was finalized in April 2019. The study used the prescriptive method when evaluating compliance and estimated a 75% compliance rate. The report is a DOE document and data was collected by the Northwest Energy Efficiency Alliance and Cadmus Group. Study to be incuded with report submittal.
  • Utility Involvement: Although no utility commission guidelines have been established, utility providers in Montana support energy code compliance activities through participation in the Code Compliance Collaborative, sponsorship of training events, testifying at adoption hearings, and supporting agencies such as NEEA in their outreach efforts. 
  • Stakeholder Advisory Group: The Montana Energy Code Collaborative is coordinated by Northwest Energy Efficiency Alliance (NEEA) and National Center of Appropriate Technology (NCAT). Paricipating stakeholders include state government officials, code officials, county sustainability coordinators, university staff, and NGOs. The Collaborative meets every four months.
  • Training/Outreach: MEO conducts onsite energy code meetings twice a year with most code officials. MEO provides Residential and Commercial Energy Code summary booklets to all building department offices. In conjunction with the Montana Department of Labor and Industry, Residential Energy Code Summary booklets and energy component labels are delivered to all new houses in Montana. MEO conducts onsite trainings with building code departments and contractors utilizing a blower door and infrared camera. MEO also provides a 2 credit-hour energy code training sessions to real estate professionals and estimates that 40% of Montana real estate sales staff has attended a training session. Montana Department of Labor and Industry provides residential and commercial energy code trainings at their  annual conference. 

Last Reviewed: July 2022


CHP Summary List All

The state has a favorable interconnection standard but otherwise has limited policies or programs to encourage CHP deployment. One new CHP system was installed in 2018.

Interconnection StandardsList All

Montana's interconnection standards apply to all small-generators of electricity (including CHP) up to 10 MW in size, regardless of fuel type. These interconnection standards apply to the two regulated electric utilities in the state, which constitute a majority of the state’s customers and retail sales. The standard has multiple tiers of interconnection, allowing for expedited approval for smaller systems.

Last Updated: July 2018

Encouraging CHP as a ResourceList All

There are currently no state policies designed to acquire energy savings from CHP (like other efficiency resources) or energy generation from CHP (in terms of kWh production) that apply to all forms of CHP.

Last Reviewed: July 2019

Deployment IncentivesList All

There are currently no state policies that provide incentives for CHP deployment.

Last Reviewed: July 2019

Additional Supportive PoliciesList All

Montana's state energy office has undertaken technical assistance activities that encourage the deployment of CHP including outreach to project developers, conducting feasibility assessments, and encouraging the use of CHP in public buildings.

Last Reviewed: July 2019

Score: 2.5 out of 15
Utilities Summary List All

Customer energy efficiency programs in Montana are provided by utilities or in selected cases by a state agency. NorthWestern Energy is the state's largest utility and provider of electricity to 90% of the state population. Programs receive funding from a universal system benefits charge, established in 1999, paid by all customers of competitive electricity providers and cooperative utilities (see Mont. Admin. R. 42.29.101 et seq.). The Montana Public Service Commission oversees the programs. The Montana Department of Revenue ensures all of the money is spent on qualifying programs.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables.

Customer Energy Efficiency Programs List All

Customer energy efficiency programs are run through individual utilities in Montana. Utilities include a universal system benefits (USB) charge for each customer meter (see Mont. Code 69-8-402). The Montana Public Service Commission reviews and approves each regulated utility’s plans for the system benefits funding. Cooperative utilities also run programs, which are approved by the local cooperative governing board. Utilities may also choose to turn their funds over to the Montana Department of Environmental Quality to administer energy efficiency and renewable energy programs. Low-income programs are run by the Department of Health and Social Services.

Western Montana is part of the region served by the Bonneville Power Administration. Consequently, that part of the state is also included in the activities of the Northwest Power and Conservation Council and the Northwest Energy Efficiency Alliance. 

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables.

Last reviewed: July 2020

Energy Efficiency as a Resource List All

Under Montana Code Annotated Sec. 69-8-419(2) and 69-3-1204(2), regulated public electric utilities in Montana are required to consider "the full range of cost-effective means" to meet service requirements, including conservation and efficiency. Effective July 1, 2020, Mont. Code Ann. Sec. 69-8-419(2) is repealed, and all regulated utilities must file under 69-3-1204. Also effective July 1, 2020, Mont. Code Ann. Sec. 69-3-1209 requires regulated utilities to file a demand-side management and conservation report every three years.

Last Updated: June 2020

Energy Efficiency Resource Standards List All

There is currently no EERS in place. 

For more information on Energy Efficiency Resource Standards, click here.

Last reviewed: July 2020

Utility Business Model List All

A lost revenue adjustment mechanism was previously used in Montana, however, the PSC denied recovery of lost revenues for NorthWestern Energy in Order No. 73571 in Docket No. D2014.6.53, effective December 1, 2015. MDU was denied recovery of lost revenues for its natural gas conservation program beginning in 2017 (Docket D2017.1.7).  The PSC required NorthWestern to implement decoupling in 2010, however, the order was appealed in court and a settlement was reached in 2011. However, the decoupling approach proposed by NorthWestern was rejected by the PSC (see Docket No. 2009.9.129, Order No. 7046i).

A decoupling mechanism pilot, called a fixed-cost recovery mechanism ("FCRM"), was apporved for NorthWestern in its 2019 rate case, Docket D2018.2.12. The FCRM is set to begin July 1, 2020, however, NorthWestern has requested a delay, due to the Commission opening a docket to investigate any potential COVID-19 impacts on the FCRM pilot.

Montana statute allows the PSC to add 2% to the authorized rate of return for demand-side management investments (MT Code 69-3-712). This incentive has not yet been approved for any utility.

Last reviewed: July 2020

Evaluation, Measurement, & Verification List All
  • Primary cost-effectiveness test(s) used: total resource cost test
  • Secondary cost-effectiveness test(s) used: utility cost test,  societal cost test, ratepayer impact measure test

The evaluation of ratepayer-funded energy efficiency programs in Montana relies on regulatory orders (Utility Division Docket No. D2003.6.77, Order No. 6496f and Utility Division Docket No. D2004.6.90, Order No. 6574e.). Evaluations are mainly administered by the utilities. There are no specific legal requirements for these evaluations in Montana, and the rules for benefit-cost tests are not specified. Evaluations are conducted for each of the utilities.

According to the Database of State Efficiency Screening Practices (DSESP), Montana uses a Total Resource Cost model (TRC) as its primary cost effectiveness test for decision making. In addition, Montana uses the Utility Cost Test (UCT), Societal Cost Test (SCT) and Ratepayer Impact Measure test (RIM) as secondary tests. The benefit-cost tests are required for the individual measure level for program screening, but there are exceptions for low-income programs, pilots, and new technologies.

Though not included in the primary total resource cost test, a 10% environmental adder incorporated into the societal cost test is intended to account for the non-energy benefits of EE. The adder functions as an upward adjustment to utility avoided costs. The adder approach is generally considered easy to apply and an effective way to account for external environmental benefits.

Further information on cost-effectiveness screening practices for Montana is available in the Database of State Efficiency Screening Practices (DSESP), a resource of the National Efficiency Screening Project (NESP).

Last Reviewed: January 2020

Guidelines for Low-Income Energy Efficiency Programs List All

Requirements for State and Utility Support of Low-Income Energy Efficiency Programs

SB 150, passed in 2015, made changes to the state’s system benefit fund, increasing a public utility’s minimum funding level for low-income energy and weatherization assistance and clarifying that eligible projects can be located on tribal reservations. SB 150 increases a public utility’s minimum annual funding requirement for low-income energy and weatherization assistance from 17% to 50% of the public utility’s annual electric universal system benefits (USB) level. A cooperative utility’s minimum annual funding requirement for low-income energy assistance remains at 17% of its annual USB funding level.

Mont. Code 69-8-402 specifies that the initial funding level for USB programs is 2.4% of each utility’s annual retail sales revenue for the calendar year ending December 31, 1995.

Cost-Effectiveness Rules for Low-Income Energy Efficiency Programs

Montana specifies the Total Resource Cost (TRC) to be its primary test for decision making. The benefit-cost tests are required for the individual measure level for program screening, but there are exceptions for low-income programs, pilots, and new technologies.

Coordination of Ratepayer-Funded Low-Income Programs with WAP Services

Low income energy assistance program (LIEAP) and a low-income weatherization program are run by the Department of Health and Human Services. Energy Share, a non-profit, receives funding from utility USB programs and also provides bill assistance and low-income weatherization. Energy Share and DPHHS work with Human Resource Development Councils (HRDC) to distribute funding. 

Last reviewed: August 2022

Self Direct and Opt-Out Programs List All

Self-direct is available statewide in regulated utility service territory. About 90% of the population is served by NorthWestern Energy. NorthWestern Energy allows customers with demand larger than 1 MW to channel their cost-recovery mechanism (CRM) funds to an escrow account that repays them on a quarterly basis for completed self-direct projects. The annual maximum contribution is $500,000, and companies have two years to use their funds before they are returned to the larger pool of CRM revenues. NorthWestern administers the funds but provides no measurement or verification. Self-direct customers file annual reports with the Montana Department of Revenue. The department publishes these reports, and a public "challenge" process is provided for as the only scrutiny or review. About 60 customers use self-direct, approximately 89% of eligible large customers.

More information on large customer self-direct programs can be found in the ACEEE report, Follow the Leaders: Improving Large Customer Self-Direct Programs.

Last Updated: July 2018 

Data AccessList All

Montana has no policy in place that requires utilities to release energy use data to customers or third parties. 

Last Updated: July 2018

Score: 1 out of 13
Transportation Summary List All

Montana has not focused on policies to encourage efficient vehicles and transportation systems.

Tailpipe Emission Standards List All

No policy in place or proposed.

Last Reviewed: November 2022

Transportation System Efficiency List All

Transportation and Land use Integration: No policy in place or proposed.

VMT Targets: No policy in place or proposed.

FAST Freight Plans and Goals: The state's freight plan is located here. There are no energy efficiency performance measures for freight. There is no modal balance target. 

Last Reviewed: November 2022

Transit Funding List All

No policy in place or proposed.

Last Reviewed: November 2022

Incentives for High-Efficiency Vehicles List All

No policy in place or proposed.

Last Reviewed: November 2022

Equitable Access to TransportationList All

Montana does not have any state programs in place to incentivize the creation of low-income housing near transit facilities, nor does it consider the proximity of transit facilities when distributing federal Low-Income Housing Tax Credits to qualifying property owners.

Last Reviewed: November 2022

Appliance Standards
Score: 0 out of 3
Appliance Standards Summary List All

Montana has not set appliance standards beyond those required by the federal government.

Last Reviewed: June 2019