Montana's Alternative to Energy Deregulation

Democrats offer alternative to deregulation
Charles S. Johnson, Lee State Bureau, November 11, 2003

HELENA -- Democratic legislators presented an energy plan Monday that calls for rural electric cooperative or public ownership of Montana's dams and electricity distribution system to put more affordable, reliable power back in consumers' hands.

The plan also calls for more reliance on other sources of electricity -- wind power, energy conservation and natural gas-fueled power plants.

Presenting the plan called "ReFuel Montana" were Senate Minority Leader Jon Tester of Big Sandy and Sen. Ken Toole of Helena. They want to discuss it with Republican Gov. Judy Martz, the Montana Public Service Commission and leaders of the Republican legislative majorities.

"Montana had some of the cheapest power rates in the nation," Tester said during a Capitol press conference. "But that changed in 1997 when the Republican Legislature deregulated Montana's electricity. Republicans gave away one of our competitive business advantages."

The last three Republican-controlled legislative sessions have failed to correct this bad situation, he said, "and Montanans are forced to pay millions of dollars more for natural gas and electricity."

Among the highlights of the Democrats' plan are:

* They want a rural electric cooperative or public power group to buy NorthWestern Energy after its parent company emerges from Chapter 11 bankruptcy. NorthWestern Energy supplies and distributes electricity and natural gas to more than 300,000 Montana customers.

* They support having a cooperative or public power group buy or condemn the hydroelectric dams that PPL Montana bought from Montana Power Co. in 1997 and dedicate electricity to Montana use. Voters rejected Toole's 2002 initiative, 68 to 32 percent, that would have allowed the state to condemn the dams and buy them for a fair market price. After PPL protested its property taxes, Toole said Montanans might be more sympathetic if a similar plan is on the 2004 ballot.

* They want cooperative, private or state ownership of proposed gas-fired electricity generating plants in Great Falls and Butte and wind power projects in Wheatland County and Whitehall. They back more aggressive energy conservation efforts.

* They favor use the state's coal tax trust fund to leverage the best possible interest rate in financial markets when they borrow money to buy the utility assets.

* They are creating an Energy Action Group to seek public comments on their plans and make recommendations to the 2005 Legislature or any special sessions.

Toole said the best solution might be to have rural electric co-ops, owned by their members, take over the utility property. "I think the world is a better place for Montanans if co-ops take over the whole shebang," Toole said.

In response, NorthWestern Corp. spokesman Roger Schrum said, "NorthWestern's assets are not for sale." He said the company is working to reorganize its finances to become a much stronger investment-grade energy company that focuses on its three-state utility operation.

"A taking of privately owned energy assets and moving them to public ownership would substantially impact the state's property tax base and create a number of unintended consequences to taxpayers and energy consumers," said Schrum, adding that his company's annual Montana property tax bill is $48 million.

While NorthWestern appreciates all Montanans' views on its energy supply issues, he said the company will be filing with the PSC next month a comprehensive supply plan.

Martz thanked the Democrats for their proposals and said she would forward the proposals to her nonpartisan Energy Consumer Protection Task Force for consideration. In order for the effort to be truly bipartisan, Martz said, divisive and partisan language should be set aside.

Senate Majority Leader Fred Thomas, R-Stevensville, criticized Democrats for allying with "radical environmental groups" that have cost Montanans jobs and power.

"Between the Democrats' alliance with radical environmental protesters and lack of solutions up to this point, I just can't help but think this so-called plan is anything more than a lifeless campaign stunt," said Thomas. Republicans have been consistent in their policy and they are on the right track for long-term affordable energy, said Thomas, chief sponsor of the 1997 deregulation law.

Dave Wheelihan, general manager of the Montana Electric Cooperatives Association, and David Hoffman, a PPL Montana spokesman, declined to comment, saying they wanted to study the plan further.