PSC Initiates Utility Re-regulation Discussion

The Montana Public Service Commission has released a staff-prepared discussion draft of a bill to rewrite and/or repeal most of the law passed in 1997 that deregulated the electric power industry in Montana. That law, among other consequences, resulted in the disintegration of the Montana Power Co. The proposal is the latest of several efforts to try and undo the harmful effects of the MPC-promoted deregulation fiasco.

The PSC hopes that the process will ultimately lead to a vertically integrated utility in Montana that owns its generation facilities and sells the electricity to consumers at PSC-regulated rates. In other words, it is an attempt to go back to the past and have a utility like the old MPC.

Many longtime observers of the utility scene were fearful that there was too much to undo and that much of the damage to Montana’s ratepayers and economy will be suffered forever. PSC member Tom Schneider told the Associated Press that deregulation “will be a bone in people’s throats permanently.” State budget director David Ewer commented: “There is no way to really put the genie back in the bottle” and regain the low-cost power the state enjoyed before deregulation.

The proposal also drew criticism, albeit for a different reason, from the Southern Montana Electric Generation & Transmission Co-operatove. It sees repeal as a threat to its ability to build the Highwood Project, a proposed, new coal-fired power plant near Great Falls. The reason is that the co-op includes the City of Great Falls, whose residents were previously customers of MPC, and under the draft bill co-ops would not be able to sell electricity to former MPC customers. MEIC opposes the Highwood power plant for a number of reasons.

From MEIC's Down To Earth, May 2006