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Another Utility Disaster Headed Our Way

Photograph Source: P.primo – CC BY-SA 3.0

Twenty years ago Montana’s Republicans enacted the worst and most costly public policy decision in the state’s history. Overwhelming Republican majorities in the state legislature and Republican Gov. Marc Racicot colluded to launch a very complex bill hundreds of pages long near the very end of the legislative session that would overturn the historic regulation of monopoly public utilities in favor of what they called “consumer choice.”

Now, with Colstrip’s coal-fired power plants closing much earlier than predicted due to coal’s economic disadvantage against natural gas, wind and solar electricity production, Montana’s all-Republican Montana Public Service Commission is about to allow another corporate-friendly, consumer-disastrous decision that will offload hundreds of millions of dollars in costs to consumers, some of whom will never use the power for which they will be charged.

For those new to Montana, the deregulation debacle is worth telling as a cautionary tale of what happens when single party rule takes precedence over the good of the populace. Governor Racicot was friends with Texas Gov. George W. Bush, who supported Enron, a Texas energy corporation that championed deregulation. Racicot jumped on Bush’s deregulation train, hoping to ride it to Washington, D.C., if Bush became president.

The Montana Power Company (MPC) had long enjoyed a monopoly over the state’s consumers as a “regulated utility” that was allowed to develop generation sources, roll the costs into the consumer rate base plus a 10% profit. The costs and rates were overseen by an elected Public Service Commission tasked with protecting consumers’ interests and Montanans had the lowest-cost power in the northwest region.

But corporate greed and faulty political ideology set the stage for disaster. MPC’s CEO, Bob Gannon, wanted to transform it into a telecommunications company, Touch America. To generate capital, Montana’s consumer-funded hydroelectric dams were sold to Pennsylvania Power and Light — an out-of-state corporation looking forward to the tidy profits from supplying unregulated monopoly power to the state’s consumers at whatever the market would bear.

Zoom forward to now. Enron went bankrupt, MPC crashed — taking pensions and stock holdings with it — and Touch America failed. PPL sold the dams to South Dakota’s NorthWestern Energy (NWE), for nearly a billion bucks. The legislature re-regulated utilities and Montanans now get to pay again for the dams they already paid for once, resulting in the highest power prices in the northwest region. Colstrip is on the rocks, but not before the Public Service Commission OK’d $400 million in debt to be passed on to consumers. And NWE is trying to stick consumers with millions more for power it bought when Colstrip’s generators were offline due to mercury emissions violations. To top it off, NWE is trying to hit solar panel owners for a ridiculous line maintenance charge.

Meanwhile, the all-Republican Public Service Commission’s internal war was highlighted by Commissioner Roger Koopman’s recent opinion column slamming fellow commissioners and Commission Chair Brad Johnson for abusing travel expenditures, conducting backroom hiring deals and failing to notify the public of increased millions in ratepayer charges. Calling the current PSC “habitually dysfunctional, politically dominated,” Koopman concluded with: “The question is, at the end of the day, can elected officials bury their egos and ambitions long enough to put the people’s business ahead of their own? Recent events would suggest that where the Montana PSC is concerned, the answer is ‘no.’”

The real question, it seems, is whether Montanans should continue to be the victims of Republicans’ corporate-friendly, consumer-disastrous policies and decisions. And as Koopman so succinctly put it, “the answer is no.”

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

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