Where the Money Meets the Power
by: Rep. Brady Wiseman
House Approves Monopoly Status for Northwestern Energy
Consensus seems to have been reached among legislators that it’s time to do something about the utility deregulation mess that has seen our power rates soar over the past decade.
That ’something’ is giving Northwestern Energy status as a monopoly utility, thus reversing most of the deregulation laws from 1997 and 1999. The major structural flaw in the system is that the supplier of power for Northwestern’s service area has an unfair advantage in market power, and that advantage can’t be adjusted.
That supplier of course is Pennsylvania Power and Light, which wound up owning the dams and the lion’s share of Colstrip. As of next summer, the price they charge us for electricity, through our Northwestern bills, will have more than doubled since 1999. PPL is the major opponent of the re-regulation effort.
The House handily passed HB25, which would allow Northwestern Energy to once again own electric generators and operate them as a monopoly. This activity would all be regulated by the Public Service Commission, which would set rates for the entire system from the generating plant to your house.
The supreme irony of the decade-long story of deregulation in Montana is that in order to get more competition into our electricity markets, we have to have more regulation.
HB25 will now go to the Senate for consideration.
Meanwhile, Senator Greg Lind has a similar bill pending in the Senate Natural Resources and Energy Committee.
All this comes amidst continuing uncertainty in our electricity market. Northwestern has accepted an offer to be purchased by Babcock and Brown Infrastructure, which is from Australia. The Montana Consumer Counsel has analyzed the documentation of the offer, and calculates that BBI is planning to double the cash take from the Montana operations currently run by Northwestern.
Stay tuned. This story has legs, and is one of the most important subjects we’ll be legislating this winter.
More posts by Brady Wiseman
2 Responses to “Where the Money Meets the Power”
February 22nd, 2007 at 7:12 pm
whatever happen to the 5 cities (or more) that wanted to join together, co-op style and buy NWE? Why are we sending more of Montana’s money not only out of state, but out of the country? Do you know?
Otherwise, good to know there’s some assistance to providing tools that might help stabilize or lessen our energy costs.
February 25th, 2007 at 2:57 pm
Thanks to all you posters.
With 4 lobbyists working overtime to add amendments to the bill, Northwestern and/or BBI is well positioned to extract all Montanans have to offer, and then some. I guess we’re used to it.
Oh by the way: the State should scrutinize BBI’s acquisition of Northwestern, determine that it is not in the public interest, and the State should acquire Northwestern.