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Opposition Grows to Allowing MT Utility to Sidestep Oversight

A bill on Colstrip is being considered by the Montana House. (Tracy/Flickr)
A bill on Colstrip is being considered by the Montana House. (Tracy/Flickr)
April 15, 2019

HELENA, Mont. — Opposition is growing to a bill that would allow Northwestern Energy to buy a unit at Colstrip without oversight from the Public Service Commission.

Current and former Public Service Commission members have become increasingly vocal in their concerns that Senate Bill 331 will pass on major costs to ratepayers. Commissioner Roger Koopman said a monopoly utility such as NorthWestern Energy doesn't operate like free-market companies and needs regulation on decisions like these to ensure customers are getting a good deal.

"Seventy-five million dollars of those costs are simply removed from PSC review,” Koopman said. “And all that does is create an incentive for the company to be less efficient and, of course, lays all the risk and all the cost in the laps of the ratepayer. And that's just not fair."

A Montana Voters Education Fund survey last week found 63 percent of Montana voters oppose the bill and only 19 percent support it. It's been dubbed the "Save Colstrip bill," although it doesn't explicitly secure jobs.

NorthWestern and lawmakers who support the measure say purchasing Unit 4 at Colstrip will provide the utility a reliable source of energy. The bill has cleared the Senate and currently is in the House energy committee.

Koopman pointed out that NorthWestern already had a chance to buy Unit 4 and didn't take it. He said the fact that current owners don't want to keep it and reportedly are willing to sell it for $1 also raises red flags.

"It's an economic fact right now that those units have been made into a very, very risky proposition,” he said.

Brad Molnar, a former Public Service Commissioner, said there's another reason to be wary of this bill. Cleanup costs for Colstrip would be passed on to consumers - and that could amount to $1.5 billion over a decade.

"I cannot imagine a $150 million rate increase to be forced upon the people of Montana without a hearing before the Public Service Commission as being a germane answer to whatever the question is,” Molnar said.

Molnar also encouraged lawmakers not to tie S.B. 331 to a bill on Medicaid expansion. He believes low-income communities served by the Medicaid expansion would see the benefit consumed by a rise in their energy bills.

Eric Tegethoff, Public News Service - MT