Committee tables controversial bill to help NorthWestern

Chairman Skees: ‘This bill does not save Colstrip’

By: - April 21, 2021 7:10 pm

One of the staircases leading to the legislative chambers of the state capitol in Helena, Montana. (Photo by Eric Seidle for the Daily Montanan)

Rep. Derek Skees, R-Kalispell, said his caucus loves coal. Nonetheless, a House committee voted 11-1 on Wednesday to table a bill that purported to encourage coal-fired energy production at Colstrip.

“Montana was built on coal. Many of us want to keep it,” Skees said.

Rep. Derek Skees, R-Kalispell, said the GOP supports coal, but a bill that was marketed as helping Colstrip wouldn’t in fact support the coal fired plants there. (Provided by the Montana Legislature.)

Chairman Skees said many Republicans want to find a way to help coal stay in the energy mix, but when he did due diligence on Senate Bill 379, he concluded its emotional appeal to the GOP was empty: “This bill does not save Colstrip.”

Rep. Geraldine Custer, R-Forsyth, was the only member of the House Energy, Technology and Federal Relations Committee to vote against tabling the bill. Last week, the Senate passed it 27-21.

Sen. Steve Fitzpatrick, R-Great Falls, sponsored the legislation he argued was meant to encourage coal production at NorthWestern Energy’s plants in Colstrip. His father, John Fitzpatrick, worked as a lobbyist for NorthWestern before he retired in 2016.

The bill would have allowed NorthWestern to buy more shares of the facility it owns with several other companies without the standard evaluation and term setting by the Montana Public Service Commission. It also would have given NorthWestern a rate of return on power purchase agreements — a deal no other utility gets, Skees said. The PSC regulates the monopoly utility in Montana.

Rep. Denise Hayman, D-Bozeman, said she had looked at nearly 4,000 emails opposing the bill, and many people expressed concern their rates would go up without oversight by the Public Service Commission. The bill would have allowed NorthWestern to recover costs a utility normally doesn’t get to recoup from customers, such as money from a shuttered plant and remediation costs a previous owner would normally be on the hook for — to the tune of millions.

“In light of the mandates in this bill that will not protect the ratepayer, there is no way I can support this bill,” Hayman said.

Rep. Katie Zolnikov, R-Billings, opposed SB379 and said the Public Service Commission, not the Montana Legislature, needs to vet deals that affect energy ratepayers. (Provided by the Montana Legislature.)

Rep. Katie Zolnikov, R-Billings, said the bill never should have been brought to the Montana Legislature in the first place. It sought, inappropriately, she said, to force lawmakers to make an economic decision for the state that regulators are charged with making.

“The PSC has the resources, the time and the responsibility to make an adequate decision about not just this particular acquisition, but all acquisitions,” said Zolnikov, committee vice chair. “That’s what they exist to do. That’s the purpose of that body.”

But Rep. Larry Brewster, R-Billings, said the PSC’s decisions can seem arbitrary, and it has an obligation to build trust with the public and give people an understanding of its rationale. At the same time, he said he lived through the negative energy deregulation results from 1997. Customer rates skyrocketed.

“It was an utter disaster. And I’m telling you, the whole thing smells the same to me,” said Brewster, echoing a refrain among many former lawmakers and previous members of the Public Service Commission. (He voted “sadly, yes,” to table the bill.)

Rep. Neil Duram, R-Eureka, also voted to table the proposal because of the way it undercut the PSC. However, he said it was eye opening to hear about energy shortfalls on the grid this February, and he believes the energy market will only tighten. Montana is seeing more demand for power with population growth, he said, including wealthy people who use more energy.

“It’s my prediction there’s going to be a greater shortfall next February,” Duram said.

Skees, though, praised NorthWestern for a deal it announced this week that adds to its energy portfolio, including with battery storage and hydro, and does so at a rate he believes is excellent. The previous PSC had problems, he said, and the tension between the utility and its regulators is real.

“We don’t solve it by making NorthWestern Energy more powerful than the PSC,” Skees said.

At the meeting, the committee also voted to table Senate Bill 86, which would have created a grant program to help workers in Colstrip with money from power companies.

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Keila Szpaller
Keila Szpaller

Keila Szpaller is deputy editor of the Daily Montanan and covers education. Before joining States Newsroom Montana, she served as city editor of the Missoulian, the largest news outlet in western Montana.