When you boil down the proposal in the Legislature to let NorthWestern Energy purchase more of coal-fired Colstrip power unit 4 for just $1, it's pretty simple.
NorthWestern will not purchase more of Colstrip 4 if the Public Service Commission has oversight.
But, the utility company appears poised to pick up the power if the oversight is removed.
NorthWestern (or any utility) could opt to buy more energy from Colstrip 4 at any time. The only thing legislation changes is oversight, really.
So far, NorthWestern has chosen not to purchase more because of the cost and potential liability of cleanup. As a regulated monopoly, it would have to justify the cost and face the scrutiny of the normally friendly PSC.
Senate Bill 331, sponsored by Billings Republican Sen. Tom Richmond, would short-circuit the oversight and consumer protection function of the PSC and allow NorthWestern the right to buy the power, pass along the cost and cleanup directly to ratepayers. Customers could pay $75 million and have no choice. And none of the state's PSC analysts can even consider, make recommendations or change the deal.
The only thing Richmond's new legislation changes is that it allows NorthWestern to buy the power and clean-up without worry, and assures the company it can pass along the rates to captive customers who will have no choice. And it can do it because the Legislature is choosing to neuter the PSC, making it impossible for commissioners to protect Montanans.
Who — exactly — is the Legislature serving by exposing so many citizens to such a liability?
We agree with Commissioner Roger Koopman who spoke in opposition of SB331 when he objected to this onerous legislation that sets a remarkably bad precedent. He opposed the bill because it removes the PSC from the one of the two vital functions it serves — to safeguard the public from monopoly utilities. If the Legislature wants to circumvent the PSC, then it's a waste of time and money to even have commissioners. But, doing so only leaves Montanans vulnerable.
Most people don't have a choice where to buy natural gas, electricity or water. That makes them captive to essential utilities. That concept is so basic that most states — Montana included — have oversight commissions to regulate the industries and not gouge ratepayers with exorbitant charges. Moreover, the commissioners force the utility companies to make judicious decisions and minimize their risk, realizing that customers need reliable and affordable services.
Since NorthWestern has always had the option of buying more Colstrip power, it's curious now — when it can thwart oversight — that it seems interested.
It's also puzzling and curious that lawmakers like Richmond and Senate President Scott Sales have interjected the specter of blackouts — something Montana has not experienced, and which has never been addressed previously.
We understand the concern for the town of Colstrip and its future. We share that concern. But, cleanup and remediation efforts there will take decades and can provide an economic runway to buy enough time to reimagine and reinvent the community. Furthermore, the lack of investment in some of Colstrip's power generation has been intentional by its owners.
It is also curious that the charge to save Colstrip 4 is being led by alleged Republicans who normally thump their chests while touting the virtues of a free-market economy. But isn't that exactly what is happening with Colstrip 4? Its owners and the market have spoken, and they've taken a step away from coal and toward natural gas and other renewables. It's nothing short of hypocritical to see these government leaders intervene, at the citizens' expense, to bail out a private industry that they've deemed too big to fail in small town Montana.
We call on lawmakers to keep in place the PSC protections that will help limit any liability for those who are held captive to NorthWestern's rates.
Advancing this legislation isn't a free market — it's a darn expensive one for NorthWestern's ratepayers.
One person who has covered this issue described the situation like this: How would you feel if you were forced by the government to buy a used car with 34 years of driving on it, and were never given the chance to look under the hood or negotiate the price?
All for $75 million.