It’s been a chaotic few years for the elected officials who decide what most Montanans’ utility bills look like.
There have been email leaks, lawsuits and questionable five-figure government employee pay raises, all of which have drawn public scrutiny to the dealings of the five-member Montana Public Service Commission, a political office that usually flies under the radar.
At $109,000 a year and with no expertise required, PSC commissioner is one of the better paying jobs on the ballot. And, voters almost always reelect incumbent commissioners.
The five-member Commission is a quasi-judicial body that the Legislature created to balance a monopoly utility’s right to a fixed return on investment with consumers’ right to a reasonable price and reliable service. PSC District 2 stretches from Red Lodge east to the North Dakota state line and includes Billings, Hardin, Miles City and Glendive.
Tony O’Donnell wants voters in Billings and southern Montana to reelect him. He argues that he has nothing to do with the dysfunction at the PSC and it hasn’t influenced commissioners’ work on rates, which O’Donnell considers fair.
Challenger Valerie McMurtry tells voters that O’Donnell hasn’t been in the office much and that his absenteeism feeds into the office dysfunction. She disagrees with O’Donnell about Montanans' rates being fair. Rates for the largest utility regulated by the PSC, NorthWestern Energy, are among the highest electricity rates in the West, McMurtry said.
The attendance accusation angers O’Donnell who says, when not physically present at the Helena office, he did phone into most of the work sessions. At issue is O’Donnell’s attendance of commission work sessions in 2019 and the two years before, all back in the pre-COVID-19 days before America began gathering by Zoom.
“What she said was that I have a 55% attendance rating. Well, that’s BS,” O’Donnell said of the 44 work sessions in 2019. “I was physically present 24 of those. That’s the 55%. Ten of those, I had two surgeries, I phoned in and made motions. I voted. I was for all intents and purposes participating in the meeting.”
“Five meetings I was officially excused because I was traveling on behalf of the state of Montana on official commission business. So, that brings it up to 39 out of 41. The other two, I don’t think anyone holds vacation time against somebody.”
It was during that 2019 period when dysfunction at the PSC came to a head. Most of the details were obtained by the press following a months-long public information lawsuit filed by the commission.
That July, the Legislative Audit Commission disclosed to commissioners a Fraud Hotline report about the commission’s office manager receiving more than $38,000 in pay raises since 2013, including a $10,857 raise in the 2018.
O’Donnell recalled commissioners approving 5% pay raises for staff in 2018, but that didn’t line up with what the Legislative Audit Commission was inquiring about. The commission’s office administrator, state salary records show, receives $100,963 a year in total pay, which is higher than the pay for some of the state’s elected officials. For example, Montana State Auditor Matt Rosendale’s salary is $92,227. Corey Stapleton, Montana’s Secretary of State, makes $98,113.
Around the same time, the commission's communications director and its office manager used PSC Chairman Brad Johnson’s signature stamp to authorize a request for copies of Commissioner Roger Koopman’s emails. The request was done in a way that kept Koopman unaware that someone was spying on his email account. A separate request for Koopman’s emails was then made by Commissioner Randy Pinnocci, which lead to more spying.
Koopman’s emails were then given anonymously to a right-wing website, which read them aloud.
There were bills, owed by the PSC to another government the agency, the staff informed commissioners wouldn’t be paid. The Helena Police Department and Montana Highway Patrol were called in for investigations of other matters that turned out to be unfounded.
It took a court order from a Lewis and Clark County District Court Judge to get the PSC to release the public information cited in this article.
Additionally, in July Montana’s Commissioner of Political Practices ruled that O’Donnell broke state ethics laws by using his PSC office as a set for video recording political ads, and used the Public Service Commission seal on reelection campaign material.
The ethics violations, like the dysfunction at the PSC office, have become fodder in the general election race for the PSC’s southern Montana district.
“I would show up. I would listen. When the corporations, the utilities, talk about rate increases, I would certainly not rubber stamp them. I would ask questions. I would want to see their justification for raises,” McMurtry said. “And as far as stopping the dysfunction and the chaos, it starts by being there and treating everybody on the commission with dignity and respect. I could no more treat people the way they’ve treated each other. I couldn’t treat a dog on the street the way they’ve treated Roger Koopman. We don’t agree politically, but I think Roger has the interest of the ratepayer.”
Customer rates are the other issue in the race. McMurtry points out the state’s largest monopoly utility, NorthWestern Energy, which is regulated by the PSC, has rates higher than most regulated utilities in the region. She cites a February report by MTN News that found the monthly bill for a NorthWestern customer consuming 750 kilowatt hours of energy a month was $91. Only Portland General Electric customers in Oregon paid more at $95 a month, per MTN.
O’Donnell argues the only rate increase the commission approved in the past year was for $6.5 million, which was less than what NorthWestern Energy had originally requested.
“NorthWestern Energy last year applied for $34.5 million dollars of rate increase,” O’Donnell said. “We disallowed $28 million of it. We allowed $6.5, which is the minimum required by law they're entitled to keep the company healthy and keep the lights on. It came to a 1.23% overall rate increase.”
The record is different than O’Donnell’s account. NorthWestern had requested a rate increase of $34,861,573. NorthWestern requested in interim rate increase of $10.5 million, which the commission approved for collection, while the remaining $24.8 million was being considered.
NorthWestern had argued the $10.5 million rate increase was essential. But by May, the utility had reached a settlement with the some of the parties who intervened to contest NorthWestern’s rate case. The settlement was for a $6.5 million rate increase.
At the time, O’Donnell was beside himself, given that NorthWestern presented experts arguing that it needed to raise rates $34.8 million, or $76.44 per residential customer per year.
O’Donnell said at the time “I’m confused as to how we should, or myself, look at the testimony as being expert testimony that is not a hill to die on,” he said at the time.
NorthWestern chief financial officer, Brian Bird, told O’Donnell to trust the parties that struck the settlement. Bird even suggested the commissioner should consider the $6.5 million increase a rate cut, given that commission had already approved the $10.5 million interim increase the utility requested that February.
By October, the commission had accepted the $6.5 million increase.
The $6.5 million rate increase was the only one of the cycle. It was permanent, as O’Donnell described, but the commission also granted a $23.8 million interim rate increase in September 2019 to make up for what NorthWestern said were unexpected expenses in the last six months of 2018 and the first six months of 2019. The $23.8 million stemmed from the utility having to buy more power than it had expected to and at higher than expected prices.
Customers are still paying for the $23.8 million, which is more than the 1.23% overall increase O’Donnell cites. The commission is still determining whether the charge is justified. If the commission rules the $23.8 million customers have been paying isn’t called for, NorthWestern would credit customer accounts over time for the difference.
The average residential customer’s share of the $23.8 million is about $37.08 a year.