HELENA — Two bills purporting to protect Montana electricity consumers ran into a buzz-saw of opposition Monday, as opponents said the bills may do just the opposite.

Opponents said one of the measures — to create state regulation of city-run, nonprofit electric utilities — could jeopardize a proposed coal-fired power plant to serve 70,000 people in rural southern and central Montana.

“To have something derail (the plant) at this point would be a very sad state of affairs,” said Dave Kelsey of Molt, representing Yellowstone Valley Electric Cooperative.

The bills are sponsored by House Majority Leader Michael Lange, R-Billings, who said he only wants to protect electric consumers from potential rate increases.

House Bill 134 would require the state Public Service Commission to regulate electric utilities created by a city or other local government. HB123 essentially says that NorthWestern Energy, the state’s largest electric utility, should buy power for customers at the lowest total cost.

Both bills had their initial hearing Monday before the House Federal Relations, Energy and Telecommunications Committee. The panel will act later on the bills.

HB134 drew stiff opposition from those involved in a proposed $515 million coal-fired power plant near Great Falls. The 250-megawatt plant, which could be completed by 2010 or 2011, is meant to supply power to the city of Great Falls and five rural electric cooperatives that serve 70,000 people in central and south-central Montana.

They said state regulation of municipal utilities could disrupt a partnership between the city of Great Falls, which has formed a municipal utility, and the rural electric co-ops that are financing the plant. It would subject the city utility to costly, unneeded regulation, they said.

Local governments that run utilities will be held accountable by their customers, and don’t need to be regulated by the state PSC, said Joe Mazurek, a Helena attorney representing the City of Great Falls.

“This bill represents a total about-face of legislative policy for no reason,” he said.

Mazurek pointed out that HB134 requires municipal utility rates to be no higher than rates charged by NorthWestern Energy, the private utility that currently serves Great Falls.

If electricity from the new power plant initially is more expensive than power from NorthWestern, but is still cheaper over the multi-year life of the plant, HB134 would prohibit the city utility from choosing the plant’s power, he said.

One of the only supporters of the bill was NorthWestern Energy. Company spokesman John Fitzpatrick said if the company’s 50,000 customers in Great Falls leave its system and become customers of the municipal utility, the cost for other NorthWestern customers could increase.

Regulation of the municipal utility by the PSC could protect those other customers from a possible rate increase, he said.

Lange said he’s not trying to prevent Great Falls or any other local governments from getting into the electric utility business. He simply wants to ensure that their foray into a risky business doesn’t raise costs for electricity consumers.

Lange’s other bill, HB123, drew opposition from Public Service Commission Chairman Greg Jergeson, D-Chinook, NorthWestern Energy and spokesmen for conservationists and supporters of alternative energy.

They said the PSC and utilities already are trying to get the lowest-cost power for Montana ratepayers, and don’t need a state law compelling them to do it.

Rep. Dave Gallik, D-Helena, suggested that the bill would require NorthWestern to buy only the cheapest existing power, thus preventing any investment in new coal-fired, wind or other power projects than may be more beneficial over the long run.

Lange said consumers don’t want to be a “guinea pig” for new, more expensive power sources, or be put on the hook for long-term contracts that may become outdated technology in the near future. HB123 would prevent that from happening, he said.