Montana power customer: ‘Bill castrates PSC’

St. Patrick Hospital isn’t the average NorthWestern Energy customer. The hospital pays a power bill of $1.5 million a year, and Senate Bill 379 will only push up that cost, according to a St. Pat’s physician and former legislator.

“This added cost … has to come out of something,” said Greg Lind, division chief for surgery at the Missoula hospital; Lind said he was speaking for himself, not the hospital, in his testimony. “Health care bills, denied care, it has to come from something.”

He said senior leadership at the hospital planned to discuss the implications of the bill Thursday. Wednesday, power customers, ranchers, other business owners, and former and current members of the Montana Public Service Commission urged Montana lawmakers to avoid the legislation many described as a corporate giveaway at the expense of ratepayers —  and a hobbling of the PSC’s ability to keep rates in check.

“I’m the face of the companies that get hurt by this bill,” said Scott Aspenlieder, who owns a civil engineering business in Billings and said the legislation isn’t good for the stability of small businesses.

Public Service Commissioner Tony O’Donnell said the PSC exists to protect captive ratepayers from a monopoly passing on imprudent costs. But he said the bill means if NorthWestern buys any more shares of the coal fired plant in Colstrip, ratepayers pay all the cost and shoulder all the liability, the utility gets a big profit, and the PSC can’t ensure prudency.

“I am intensely in favor of the future of Colstrip,” said O’Donnell, who noted the city and generation units are in his district. “I am very much in favor of NorthWestern Energy owning and operating all of Colstrip 4. … I think this bill does nothing whatsoever to strengthen Colstrip.”

David Saulsbury was among those who testified in support of the bill. Other proponents included Colstrip plant workers and economic development representatives from the area, but Saulsbury spoke as a power customer. He said he ordered a generator for his home, and a large store in Helena was backlogged 16 weeks, even before the debilitating storm in Texas.

“People are scared,” Saulsbury said. “They’re scared, and they want reliable power. If they can’t get it (from their utility), they’re going to get it themselves.”

Chair Rep. Derek Skees, R-Kalispell, said he expected the House Energy, Technology and Federal Relations Committee to take executive action on the bill next week.

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Sponsored by Sen. Steve Fitzpatrick, R-Great Falls, the legislation aims to encourage NorthWestern Energy to continue operating its plants in Colstrip, and it limits the authority of the Public Service Commission to ensure deals balance the interests of the utility against those of customers.

Wednesday, most of the testimony came from opponents who pay energy bills and want them to remain reasonable. Mark Juedeman said his ranch uses a lot of power, especially in the winter, to keep tractors plugged in and the calving barn heated, and farming and ranching margins are slim as it is. He asked legislators to protect families like his.

Richard Liebert, a military veteran, said the trickle effect of the bill is significant and will hit not only individual ratepayers, but hospitals, schools and implement dealers. The bill would tie the hands of the Public Service Commission in regulating the monopoly company, and Liebert offered a metaphor.

“I can tell you as a cow man, this bill castrates the PSC,” Liebert said.

NorthWestern Energy is one of several owners of Colstrip Units 3 and 4. Other owners have to phase out of coal, and NorthWestern already has tried to buy more of the plant.

Instead of being able to set terms of a deal, though, PSC Chair James Brown said the bill means the commission has to take it or leave it. In doing so, the bill turns 100 years of ratemaking upside down and puts a gun to the head of the commission. If commissioners vote yes on a deal, they don’t get to do their jobs of deciding reasonable terms, he said; if they vote no, they get blamed for shutting down Colstrip.

“It’s quite a clever bill,” Brown said.

Former Public Service Commissioner Tom Schneider said there’s been a lot of talk about affordability and reliability, but the bill doesn’t provide for either, and NorthWestern has failed to examine competitive alternatives.

“In my 44 years, this is among the worst, most destructive and detrimental pieces of legislation that I’ve seen,” Schneider said. “It is a legislative — massive legislative — tax on one subset of Montanans. That is the customers of NorthWestern.”

Mary Fitzpatrick, with the Northern Plains Resource Council (she said she was no relation to the bill sponsor) said the bill is a threat to democracy, and Montana has seen enough of corporations that try to operate outside regulation by elected officials.

“When that particular camel gets its nose under the tent, I think we need a good blast of bear spray,” she said. (“I think you meant camel spray,” Skees said.)

A handful of people spoke in support of the bill, including NorthWestern lobbyist David Hoffman. (Hoffman took the place of John Fitzpatrick at the power company, father of bill sponsor Sen. Fitzpatrick.) Chair Skees asked Hoffman if one provision in the bill, allowing the company to get a rate of return on a purchase agreement, was something other states allowed. Hoffman sidestepped the question, but Skees asked him to return with a direct response.

Sherman Anderson, of Deer Lodge, also was among the bill’s supporters. He said he’s an owner and operator of a lumber mill and other businesses, and affordable electrical energy is vital to them. He said he’s looked at building a co-generation facility at his sawmill, but it doesn’t pencil out compared to rates from Colstrip.

“We can supply the same thing, but it’s like, ten times the money,” Anderson said.

When it comes to money, though, Anne Hedges said the state of Montana loses, and to the tune of millions. Hedges, with the Montana Environmental Information Center, said at its lowest impact, the community of Billings loses $2.8 million a year with the bill, but as much as $23 million, based on analyses by PSC staff. She said Hamilton could lose up to $11 million from households alone.

“This bill is too expensive. We simply can’t afford it,” Hedges said.