State and Local Policy Database


State Scorecard Rank



12.5Scored out of 50Updated 10/2019
State Government
Score: 3 out of 6
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

Financial Incentive information for Montana is provided by the Database of State Incentives for Renewables and Efficiency (DSIRE Montana).

Last Updated: July 2018

Carbon Pricing PoliciesList All

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

Last Reviewed: July 2019

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 and state-leased buildings. Energy efficiency 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 effective most recent International 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. Also, the current administration has launched a “Smart State Buildings” initiative to continue efforts of saving energy in State Buildings. Rather than targeting a specific reduction, building baselines will be determined and then targeted measures for each building will be implemented.

The State Building Energy Conservation Program (SBECP) uses an internal database to perform energy saving verification studies at buildings receiving facility upgrades for projects designed to save energy. 100% of eligible buildings with square footage greater than 20,000 sq ft have been benchmarked; information is available on the DEQ Energy Office website. The SBECP also provides a free portal energy tracking services to local government and K-12 schools. Under the Governor’s Smart State Building Initiative; state building energy usage is available for public viewing. To date, the state has benchmarked approximately 15% of state buildings.

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. Local governments and schools are encouraged to comply.

Last Reviewed: July 2019

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: July 2019

Energy Savings Performance Contracting List All

Montana statute declares that “it is the policy of the state of Montana to promote efficient use of energy and water resources in local government and state agency buildings… by authorizing local government units and state agencies to enter into energy performance contracts.”  Information is housed in the Department of Environmental Quality and includes prequalified ESCOs and a model contract.

The 2015 Legislature amended statute 90-4-1103 to encourage more use of EPC as a financing tool for K-12 schools and local governments. 

Last Reviewed: July 2019

Research & Development List All

No public research centers have a focus on energy efficiency.

Last Reviewed: July 2019

Score: 5.5 out of 8
Buildings Summary List All

In Montana, a home rule state, the state establishes the set of codes that are to be enforced, including the energy code. Local jurisdictions may choose to enforce the codes of their preference, but they are not mandated to enforce any. If a local jurisdiction chooses to adopt a code, it must be the state code without modification. 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 pursue stretch codes to date. Approximately 40% of new homes are constructed within jurisdictions that enforce the energy code. Residential and commercial buildings must comply with the 2012 IECC, with amendments. The state has completed a baseline compliance study, established a stakeholder advisory group, and offers training and outreach.

Residential Codes List All

Montana's residential building code, codified in ARM Title 24, Chapter 301.160, is mandatory statewide. Montana's residential code requires compliance with the 2012 IECC, with amendments.

Last Reviewed: September 2019

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 2012 IECC with amendments or ASHRAE 90.1-2010.

Last Reviewed: September 2019

Compliance List All
  • Gap Analysis/Strategic Compliance Plan: In calendar year 2014, Montana DEQ hosted a stakeholder group whose purpose was to develop a strategic compliance plan. This plan has been developed and now used as a planning tool for 2015/2016.
  • Baseline & Updated Compliance Studies: In 2012, the Northwest Energy Efficiency Alliance (NEEA) commissioned a study conducted by Cadmus to determine energy code compliance in Montana. An update evaluation to the compliance study was released in February 2017.
  • 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). In 2013, DEQ initiated another stakeholder group to specifically address the need for a strategic plan and develop a long-term workplan to implement the stragic plan. Upon completion of plan, DEQ handed this process back to NCAT who now hosts the Code Collaborative. 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 session to real estate professionals and estimates that 40% of Montana real estate sales staff has attended a training session. With the adoption of the 2012 code, training has stepped up dramatically with offerings of conference workshops, webinars and multiple training opportunities across the state.

Last Reviewed: September 2019


Score: 0 out of 3
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: 3.5 out of 20
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.

In addition to the USB programs, NorthWestern Energy has a separate Demand-Side Efficiency portfolio that is budgeted at 2.5 times the USB budget.

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. NorthWestern Energy is participating in a five-year smart grid demonstration project initiated by the Bonneville Power Administration with support from the U.S. Department of Energy. This project extended through 2014.

Montana has commercial, residential, and residential low income natural gas efficiency programs implemented by the utilities and their subcontractors. Programs were mandated by statute in 1997 as part of natural gas restructuring.

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 Updated: July 2018

Energy Efficiency as a Resource List All

Following Montana Public Service Commission Guidelines, NorthWestern Energy completes an Electric Supply Resource Procurement Plan every two years. The most recent plan was filed in 2011 and stated a goal of achieving 84 average megawatts (aMW) of energy savings over 15 years, or 6.0 aMW annually. Although energy efficiency is not prioritized within the plan, NorthWestern notes that energy efficiency programs help stabilize resource portfolio costs by reducing load.

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.

Last Updated: June 2018

Energy Efficiency Resource Standards List All

There is currently no EERS in place. 

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

Last Updated: July 2018

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 is being proposed by an intervening party in NorthWestern's 2019 rate case, Docket D2018.2.12.

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 2019

Evaluation, Measurement, & Verification List All
  • Primary cost-effectiveness test(s) used: total resource cost test 

  • Secondary cost-effectiveness test(s) used: utility cost test, participant cost test, societal cost 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. Montana uses four of the five classic benefit-cost tests identified in the California Standard Practice Manual. These are the Total Resource Cost (TRC), Utility/Program Administrator (UCT), Participant (PCT), and Social Cost (SCT) test. Montana specifies the TRC as 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.

Last Updated: January 2019

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 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 Development Councils (HRDC) to distribute funding. 

Last updated: July 2018

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: 0.5 out of 10
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: July 2019

Transportation System Efficiency List All

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

VMT Targets: No policy in place or proposed.

Complete Streets: No policy in place or proposed.

FAST Freight Plans and Goals: No freight plan or goals in place.

Last Reviewed: July 2019

Transit Funding List All

No policy in place or proposed.

Last Reviewed: July 2019

Incentives for High-Efficiency Vehicles List All

No policy in place or proposed.

Last Reviewed: July 2019

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: July 2019
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