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HELENA – State officials decided Friday not to appeal an adverse court decision on a pro-posed referendum on an energy law so two Democratic represen-tatives will be able to begin gath-ering signatures next week in an attempt to overturn the 2001 law.

“I’m very excited,” said one of the lawmakers, Rep. Michelle Lee, D-Livingston, said. “I look forward to working extremely hard. It’s going to take every Montanan who’s willing to give time or get signatures because now it is truly up to the people.”

Collecting signaturesShe said she anticipates get-ting the official petition forms Monday from the secretary of state’s office and will begin col-lecting signatures.

Secretary of State Bob Brown, a Republican, and Attorney General Mike McGrath, a Democrat, agreed not to appeal a ruling by District Judge Jeffrey Sherlock of Helena to overturn McGrath’s decision rejecting the proposed referendum on House Bill 474 by Reps. Christopher Harris, D-Bozeman, and Lee.

HB474 was the major energy bill enacted by the 2001 Legislature that, among other things, provided Montana Power Co. with full-cost recovery for any electricity it purchases after mid-2002.

A new authorityIt also created a new Montana Power Authority that can recom-mend the state issue bonds of up to $500 million for power plants, transmission lines or the pur-chase of power.

McGrath said the proposed referendum involved an uncon-stitutional appropriation of funds. The Legislature autho-rized the state to spend up to $100 million from an energy sup-port account, but killed the bill that funded the measure.

However, Sherlock ruled Tuesday that HB474 doesn't involve an appropriation and thus is a legal proposed referendum.

“I’ve given a lot of thought to this issue, and after consultation with the attorney general and my own legal counsel, I’ve decided there’s no public purpose to be served by appealing this issue at this time,” Brown said.

Brown said he considered the possibility of appealing just so any legal questions of HB474 could be resolved before the backers gather the signatures, not after it passed as occurred with some past ballot measures.

McGrath, who represented Brown, agreed, saying: “There’s no public policy reason to appeal. This is a narrow legal issue that has been resolved by the court. Moreover, it would delay the signature process for several weeks and cost taxpayers unnecessary time and money. We’ll let the process go forward outside the court system.”

Because of concerns that the proposed referendum puts a cloud over the Montana Power Authority’s ability to recommend the bond issues, Brown said he contacted Lee and Harris to consider “the possibility that we didn’t have to vote on all of HB474.”

He suggested they could confer with two Republican legislative leaders, House Majority Leader Paul Sliter, R-Somers, and Senate Majority Leader Fred Thomas, R-Stevensville, to see if a compromise ballot issue were possible that didn’t cover all of HB474.

However, Lee and Harris indicated they wanted a chance to have Montana voters decide whether to reject or keep HB474, a controversial law that divided lawmakers by party.

They can put HB474 on the ballot next year if they get 20,510 signatures of registered voters, including at least 5 percent of the voters from at least 34 of the 100 legislative districts. Or they can try to get 15 percent of the registered voters in at least 51 of the 100 legislative districts to suspend the law until Montanans vote on it in November 2002.

As part of an 11th-hour deal announced the day before the Legislature adjourned, PPL Montana agreed to sell 500 megawatts of power to Montana Power for five years, beginning July 1, 2002, at $40 per megawatt in what was billed as a good deal for consumers. Montana Power said the transaction would increase its typical consumers’ electricity bills by 50 percent or $25 a month.

In exchange, the utilities said they anticipated that the Legislature would pass HB474, which guaranteed Montana Power full-cost recovery for its power purchases, and would kill SB512, the tax opposed by PPL.

The GOP-led Legislature complied with the utilities’ request on the final day of the 2001 Legislature, with most Republicans voting for it and most Democrats against. But the PPL-MPC plan remains in limbo because the state Public Service Commission refused to agree to the third prong of the deal requiring it to quit trying to reregulate PPL Montana. Thomas, meanwhile, spoke out against the referendum on the measure.

“I would issue a challenge to show how does this bill harm anyone,” Thomas said. “To the contrary, it helps low-income people, irrigators, conservation and renewable projects.”