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HELENA — One week after the Montana Public Service Commission endorsed a new rule to divulge the salaries of top executives at regulated utilities, a Missoula water company is asking a judge to throw it out.

Mountain Water Co., the private company that supplies water to Missoula residents and businesses, filed suit Tuesday in state District Court in Helena, saying the rule violates privacy rights guaranteed by Montana’s constitution.

It asked District Judge Kathy Seeley to void the rule, declare it unconstitutional, and “forever bar” the PSC from deciding that Mountain Water employees should have salary information revealed publicly during a rate case.

“The commission … has no jurisdiction, power or authority to determine that the employees of Mountain Water have lost their right to maintain the privacy of their financial affairs under (the privacy rights of) the Montana Constitution, including the salary and benefits they receive for working for Mountain Water,” wrote an attorney for the company, John Alke of Helena.

The PSC, which regulates electric, gas, telephone and other utilities, voted 4-1 last week to adopt the new rule, which says that if the commission has salary information for a utility’s three highest-paid executives, it will no longer grant “protective orders” to keep that information secret from the public.

Commissioner Ken Toole, D-Helena, who led the charge to enact the rule, said customers of monopoly utilities should be allowed to know what those companies pay their top executives.

Under the rule, Mountain Water would be divulging compensation paid to its general manager, assistant general manager and chief engineer.

Toole said Wednesday he’s not surprised by the lawsuit, but believes the public’s right to know overrides privacy interests on the salary issue.

Utilities often file employee salary information with the PSC during rate cases. Previously, at the request of the companies, the PSC generally issued a protective order to keep that information secret.

Some utilities operating in Montana, such as NorthWestern Energy and MDU Resources, are publicly traded companies and required to publish compensation for top executives in documents filed with the U.S. Securities and Exchange Commission.

However, some regulated utilities in Montana, such as Mountain Water, are not publicly traded companies.

Also, the executive salary information filed with the SEC may not include the company’s three highest-paid executives based in Montana.

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Toole noted that while Mountain Water objects to revealing the salaries of its top executives in Montana, its parent company, Park Water Co. of Downey, Calif., must file information with the California Public Utility Commission on any California employee earning more than $85,000 a year.

The PSC is considering a current rate case from Mountain Water, which asked in April to increase revenue by $2 million a year, an approximate 12 percent increase for most water customers.

Mountain Water had asked the PSC to issue a protective order to prohibit the public release of any salary information on its employees. A month ago, the PSC denied that request for any Mountain Water employees earning more than $100,000 in compensation.

Alke said the refusal, which was part of a Sept. 2 order, didn’t even correspond with the requirements of the PSC’s final rule issued last week. The lawsuit asked the district judge to throw out both the order and the final rule, because they violate constitutional privacy protections.

He said Mountain Water has not provided salary information to the PSC during the rate case, because it generally doesn’t do so until a protective order is issued to prevent public disclosure of the information.

 

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