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Bailing Out Aging Coal Plants is an Unmitigated Disaster

Montana’s Republican legislators have a long and horrific record of savaging Montana’s consumers while doing everything possible to increase the profits of the state’s utility corporations. Despite the devastating mistakes of the past, they’re at it again. This time with a bill that will allow Montana’s largest utility, NorthWestern Energy, to buy Colstrip for a buck — and inherit the liabilities that come with the shutdown and remediation of the antiquated and massively polluting power complex, which will then be passed on to the utility’s customers.

Those with good memories will recall the disastrous deregulation bill passed by the Republican-dominated legislature and signed into law by Republican Gov. Marc Racicot in 1997. The measure was sponsored by Sen. Fred Thomas, a Hamilton Republican widely known back then as “the man of a thousand bad ideas.” Thomas is back in the legislature and, not surprisingly, still lives up to that description.

The phony premise behind utility deregulation was that “competition” and “choice” would bring Montana’s consumers lower energy prices. Since Montana had the lowest-cost power in the region, it was pretty obvious competition was not going to lower our energy prices. But never letting facts interfere with ideology, the Republicans stuffed through the massive bill with their majorities and set in motion a tidal wave of disastrous consequences.

Montana Power Company, then-owner of the Colstrip complex and a monopoly utility regulated by the Montana Public Service Commission, decided to sell its holdings in the coal plants and hydroelectric dams and then turned itself into Touch America, a communications company. The result? Montana’s electricity costs went from lowest in the region to highest while Montana Power went bankrupt and, tragically, took stockholder and pension funds down with it.

Montanans are already on the hook to the tune of almost a billion dollars to NorthWestern Energy, now a re-regulated utility that decided to re-purchase the dams for $900 million a few years back. Ironically, Montanans had already paid to build and maintain those dams through their utility bills, and thanks to the Republican deregulation disaster, we now get to buy and maintain them again.

Our Republican utility geniuses come forth now with Senate Bill 278, sponsored by Billings Republican Sen. Tom Richmond — and the potential costs for Montana utility consumers associated with the measure could run into the billions. As the Montana Consumer Council’s Jason Brown told reporters: “If NorthWestern’s rates include the full cost of Colstrip, the impact could be astronomical.” And how handy, as reported by the Billings Gazette: “Richmond’s bill prohibits the Public Service Commission from scrutinizing any future costs the utility might expect customers to pay.”

The recently released estimate to contain the toxic pollution from Colstrip’s ash ponds alone comes to staggering $700 million. Then there’s the decommissioning and demolition of the plants, undoubtedly yet-to-be-discovered further toxic remediation, and any “future” costs after the purchase. That could include the cost of the pension funds that are currently insufficient to meet the obligations to retired employees. Even worse, the measure encourages the continued operation of the coal-fired plants that are producing power at considerably higher costs than natural gas or solar facilities while massively contributing to global warming emissions.

This is a lose-lose-lose proposition made in a desperate attempt to “save” Colstrip’s outdated coal plants. It seems our Republican legislators have learned nothing from their 1997 deregulation debacle that continues to plague Montanans and our economy with high energy costs. For the sake of our citizens, our economy and our future, we must reject this latest very bad idea.

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George Ochenski is a columnist for the Missoulian, where this essay originally appeared.

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