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If all goes as planned, a new power-supply company could not only pick up some customers served by the city of Great Falls’ utility but also could buy wholesale power from a Billings-based cooperative.

The Billings-based company, called Independent Electricity Supply Service Inc., is a for-profit corporation, said Billings attorney Jon Doak, Independent’s registered agent and attorney who filed incorporation papers with the state on March 11.

Independent was created by SME, an offshoot of Southern Montana Electric Generation and Transmission Cooperative, to sell power to those customers able to choose their supplier, Doak said. Doak also is the attorney for SME and Southern.

‘Choice customers’

Some of the so-called “choice” customers have been notified by Electric City Power, which is the utility arm of Great Falls, that their contracts are being terminated or are expiring on June 30, Doak said. If those customers don’t select another supplier, they will default to NorthWestern Energy as their supplier.

ECP buys its wholesale power from Southern, a Billings-based organization composed of five rural electric cooperatives and Great Falls that supplies power to its members. Four of Southern’s co-op members — Beartooth, Mid-Yellowstone, Fergus and Tongue River — also are building the gas-fired Highwood Generation Station near Great Falls.

Great Falls and the Yellowstone Valley Electric Cooperative, Southern’s fifth co-op member, are not part of the Highwood project and both are suing separately to leave Southern.

With some of ECP’s contracts expiring or terminating, Southern could lose those folks as potential customers through ECP and end up with more power than it needs, Doak said.

Supplying electricity to former ECP customers through Independent could help Southern stem losses from from having to sell excess power in a depressed market, Doak said.

Land sale funds

SME, which is comprises the Beartooth, Mid-Yellowstone, Fergus and Tongue River co-ops, provided less than $50,000 in “seed” money to start Independent, Doak said. The money came from a portion of proceeds from the sale of land that SME owned near the Highwood plant, he said.

Independent will be run by a board of directors, which is still being formed after an April 21 organizational meeting, Doak said. The board initially will be composed of representative nominees from each of SME’s members, with a fifth director to be eventually filled by a customer. The board will not include the same people serving as SME’s trustees, he said.

At present there is no contractual relationship between Independent and Southern, Doak said.

“There is no secret deal,” Doak said.

Independent also can seek wholesale power from other suppliers, he said.

Independent’s general manager is Tim Gregori, who also is Southern’s and SME’s general manager, Doak said.

There is no conflict with Gregori’s roles, Doak said, because any relationship between Independent and Southern would be contractual, subject to disclosure and approved by Independent’s board or Southern’s trustees.

Independent pays for Gregori’s services, Doak said.

Gregori said he has provided some analysis and management service to Independent, which will operate separately from SME.

Some potential customers have expressed interest in Independent but no contracts, either with customers or wholesale suppliers, have been signed, Gregori said. He called it “a work in progress.”

Independent has no interest in interfering with ECP’s contracts or its customers, Gregori said. But if customers no longer want to use ECP, Independent is there, he said.

Gregori himself is a “choice” customer facing a decision because his contract with ECP is ending. “My choice is Independent,” he said.

Contact Clair Johnson at cjohnson@billingsgazette.com or 657-1282.

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