A controversial bill requiring a larger share of Colstrip be added to the rates of NorthWestern Energy customers without refusal is expected to be voted on Monday by the House of Representatives.
Senate Bill 331, which has always bound NorthWestern customers to paying costs associated with the utility increasing its ownership in the four-unit coal-fired power plant, now requires state utility regulators to add it to customer rates. The bill was heavily amended Friday by members of the House Energy, Telecommunications and Federal Relations Committee.
It’s a deal the Public Service Commission can’t refuse. The bill does allow the Montana Public Service Commission to determine what the customer burden will be, but not to turn away the increased investment if the PSC considers it a poor deal for customers. The Public Service Commission will have until Jan, 1, 2020, to set the price.
The new payments would be an addition to the $407 million NorthWestern Energy customers have been paying since 2009 for the utility’s current 30 percent share of Colstrip Unit 4.
NorthWestern isn’t committed by SB 331 to buy an increased share in the power plant, but it has strongly supported the bill.
For the moment, Montana legislators have backed away from requiring consumers to pay $75 million to NorthWestern Energy, to cover capital expenditures should the utility buy a larger share the power plant.
The bill had previously committed customers to fully compensating NorthWestern for a would-be Colstrip purchase. It also prevented Montana’s Public Service Commission from scrutinizing the deal, including costs burden to customers.
The bill, by Sen. Tom Richmond, R-Billings, has become one of the session’s most contentious and crucial as Senate Republicans have threatened to cut health care to 96,000 Medicaid recipients unless an attempt was made to extend the life of the Colstrip Power Plant.
The Legislature’s remaining bill to continue Medicaid coverage for the working poor sat idle Friday in the Senate as the House drama over SB331 played out.
Before the House Energy, Telecommunications and Federal Relations Committee took up SB331, it was a bill of extraordinary measures that NorthWestern and Senate Republicans said were needed to ensure the utility didn’t get burned as it attempted to buy a bigger power plant share from Colstrip’s other owners, four of which are facing pressure to abandon coal power.
The costs the bill committed NorthWestern Energy customers to paying were not to be questioned by the PSC, whose sole purpose is to balance customers’ right to a fair price with NorthWestern’s right to a fixed return on equity. The company is a monopoly utility with 370,000 captive customers who by law cannot shop for power elsewhere.
As amended by House lawmakers Friday, Senate Bill 331 now makes no promises to NorthWestern about customers covering costs. And the entire agreement would have to be scrutinized by the PSC, whose power was reinstated.
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The changes made were so dramatic some lawmakers on the committee refused to believe the balance of the bill had truly shifted. Rep. Denise Hayman, D-Bozeman, said after the amendments the bill basically restored the status quo. So why pass it?
“If we head in this direction, why do we even have a bill?” Hayman asked. “I believe there is more to this bill and more to this amendment than meets the eye, more than we can determine in a few minutes. And so I don’t trust the bill, I don’t trust the amendment and I definitely can’t support the amendment or the bill.”
But Rep. Derek Skees, R-Kalispell said there was no trickery, encouraging the committee to move the bill to the House floor as amended, which it did on a 7-5 vote.
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“Although I can see there might be a reason, perhaps, to be leery of this, this is exactly what it is on its face," Skees said. "I’ve had numerous conversations with the chair and the vice chair about the problems we’ve all seen with this bill, and I think our due diligence here is to do the right thing by Montana, and I think that is what this is going to do. I call exception to the lack of trust issue. This is exactly what this bill does. We need to put it back in the hands of the PSC. We need to take the money out and leave it back at a dollar.”
The “money” Skees referred to is the costs consumers were intended to pay under the pre-amended bill. The “dollar” being the price NorthWestern said it would offer to other owners for an increased share equal to 150 megawatts of generation. If none of the other Colstrip owners accepted NorthWestern’s offer, then the customers were off the hook for the $75 million, as well as any prudently incurred environmental cleanup and plant closure costs associated with NorthWestern’s increased Colstrip share. The latter costs, for which no dollar amount was ever stated, were to be paid off by customers over 30 years.
But the House committee’s amended version of SB331 is far from the one likely to emerge by end of negotiations. The amendments set up a showdown between the SB331 passed earlier by the Senate and the dramatically different House version.
Should the heavily amended bill win approval on the House floor, the Senate will have to weigh in again. And if senators object to the changes, the bill will most likely have to be reconciled in a conference committee consisting of the lawmakers from both chambers. The end version might not look like the one retooled Friday by House lawmakers.
As SB331 moved to the full House, the legislation to continue Medicaid expansion in Montana with added work requirements remained stalled in the Senate.
Senate Minority Leader Jon Sesso, a Butte Democrat, made an attempt to bring the bill back Friday afternoon, but that went down on a 24-26 vote with little debate.
If the bill does not pass, the program that extends Medicaid to 96,000 Montanans earning up to 138 percent of federal poverty level would end July 1.
The Senate put amendments on the Medicaid expansion bill Thursday before the 25-25 tie vote stopped its progress. Those major changes remain on the bill if and when it’s picked up again, including terminating the program in 2025 and allowing the Department of Revenue to share information with the state health department to verify the income of enrollees.
Senate Majority Leader Fred Thomas, a Republican from Stevensville, said Friday afternoon he believes the Senate will vote again on Medicaid expansion either Saturday or Monday.
“I’m very positive on things coming together,” Thomas said of efforts to hammer out a deal in the waning days of the session. “The governor’s a great guy and he wants the state to be successful just like we do.”
Gov. Steve Bullock tweeted Friday his frustration with the bills’ fates being linked together.
"There are real people waiting and watching what happens in our state Capitol" Bullock tweeted. "The health care of 96,000 Montanans hangs in the balance while a handful of Senate Republicans continue to play political games. Montanans deserve better, and the fight isn’t over.”
There are real people waiting and watching what happens in our State Capitol. The healthcare of 96,000 Montanans hangs in the balance while a handful of Senate Republicans continue to play political games.— Steve Bullock (@GovernorBullock) April 12, 2019
Montanans deserve better, and the fight isn’t over.
Bullock’s office Friday provided a copy of a letter it drafted to send out if the Senate fails to pass expansion notifying people who would lose their coverage July 1.
If the vote is Monday and the expansion bill passes second reading, the Senate may have to suspend its rules to meet a transmittal deadline Tuesday.