HELENA -- As a Montana House committee prepared to act this month on the most far-reaching utility bill of the session, its 12 members heard an explanation of proposed amendments to the bill -- from a lobbyist for the company pushing the measure.
The lobbyist was John Fitzpatrick and the company is NorthWestern Energy, the state's largest electric-and-gas utility and, once again, a key player driving
energy policy at the Legislature.
Fitzpatrick led members of the House Federal Relations, Energy and Telecommunications Committee through the 70-odd amendments to a bill that would allow NorthWestern to build or buy power plants and charge the cost back to ratepayers.
The company drafted many of the amendments, and they were folded into the bill -- which the committee approved a week later.
The bill, House Bill 25, is NorthWestern's top priority this session, but it's not the only energy measure on which NorthWestern will exert its considerable influence.
The Sioux Falls, S.D.-based firm is fighting bills to enable the city of Great Falls to offer electricity to local customers and to allow a "green energy'' buying cooperative to own windmills and generate power for its members.
It's all part of a push, says Fitzpatrick, to maintain the company's 300,000-plus electricity customers and, eventually, offer those customers a reliable, long-term source of affordable electricity -- just as the old utility did before it was dismantled in the wake of "deregulation'' nearly 10 years ago.
''We think the best way for us to stabilize power prices in the long term is to own (power) generation,'' he says. "We think that is in the public's interest.''
Yet others say while lawmakers are being wooed by NorthWestern to take yet another stroll down Montana's rocky road of utility/energy policy, they should ask whether it's the best path for the state and its citizens.
"NorthWestern is protecting their turf; that's their job,'' says Rep. Deb Kottel, D-Great Falls, the sponsor of two energy bills killed after they were opposed by NorthWestern. "But I'm not sure it's the job of the Legislature to protect NorthWestern.''
Skeptics and opponents often bring up the 1997 utility deregulation bill, authored and pushed through the Legislature by NorthWestern's predecessor, Montana Power Co.
At the time, MPC said all would be well with electric utility deregulation, and a substantial majority of lawmakers went along. The aftermath was a different story, with MPC selling off power plants that once provided cheap power. Most shareholders lost everything in two bankruptcies.
Fitzpatrick says bringing up the 1997 bill is a red herring, because NorthWestern, as a company, wasn't involved in the original decision and has spent its time in Montana since 2002 "trying to make it work.''
Now, says Fitzpatrick, the company is trying to fix deregulation largely by undoing it, setting up the company to reinvest in power plants and sell that power to customers at a regulated rate. The plant also would create a new revenue source for NorthWestern.
What is reminiscent of 1997 and other past sessions is the full-court lobbying press by NorthWestern -- and, so far, its success at persuading legislators to support the company.
House Bill 25, the vehicle to undo "customer choice'' and enable NorthWestern to reinvest in power plants, passed the House on a 69-30 vote on Feb. 15, and many bills that NorthWestern sees as a threat have been amended or killed.
NorthWestern employs four lobbyists who work the session nearly full-time, led by Fitzpatrick.
The company also has enlisted support for HB25 from a majority of the five-member Public Service Commission, which regulates NorthWestern, and negotiated directly with some commissioners over the content of the bill.
Russ Doty, executive director of the Green Energy Buying Cooperative in Billings, says it's difficult to swim upstream against the company on a bill.
"When you have one or two part-time people up here faced with a dozen lobbyists for the various energy monopolies, it becomes overwhelming,'' he says.
Doty is behind Senate Bill 337, which would enable the co-op to own and build two 10-megawatt wind projects in Eastern Montana.
NorthWestern opposes the bill because the co-op would be selling wind power to utility customers, including NorthWestern's. Those customers would choose to buy electricity from the co-op, and NorthWestern would deliver it.
Fitzpatrick says the plan isn't workable and has many unanswered questions. Doty says all the arguments from NorthWestern are just "window-dressing for the bottom line, which is that they don't want us cutting into their market.''
Kottel sponsored two bills designed to help the city of Great Falls set up a municipal utility that eventually might sell electricity to local customers, from a proposed coal-fired plant near town.
NorthWestern opposed both bills, which were killed in a House committee.
Kottel believes NorthWestern wields influence over the Legislature because utility policy is one of the most complex issues facing lawmakers, and few have an in-depth understanding of it.
"So when an entity as large as NorthWestern speaks, people tend to listen,'' she says. "The definitive card they always play is fear -- 'If you don't vote for us, rates will go up.' Nobody wants to vote for rates going up.''
At times, a political counterweight to NorthWestern is the other major energy player in the state: PPL Montana, which bought the old Montana Power Co. plants in 1999 and now sells energy back to NorthWestern's customers.
David Hoffman, PPL's head lobbyist, says consumer interests are not being represented by NorthWestern, which just wants to corral a customer base and build a new plant to serve it, thus setting up a new, guaranteed revenue stream for the company.
HB25 shifts the risk to consumers because it allows the PSC to "pre-approve'' any plant NorthWestern wants to build, virtually locking in the costs that will be charged to ratepayers in the future, Hoffman says.
He also points to NorthWestern's own "fact sheet'' from last year, touting a new contract to buy electricity from PPL Montana through July 2013. It not only shows PPL Montana prices below the market for the next five years, but also that in the long term, a new plant's power may end up being more expensive than the market, he says.
Fitzpatrick says he doesn't regard as reliable market forecasts that go beyond a couple of years into the future, and says PPL Montana's arguments ring hollow anyway.
PPL Montana has its own virtual electricity monopoly right now, and the only real threat to breaking that monopoly is NorthWestern building its own plant, he says.
Fitzpatrick readily acknowledges the company is trying to kill any bill that might enable current NorthWestern customers to leave the system for other suppliers.
"You simply cannot finance a power plant if you have legislation that allows major blocks of your customers to disappear,'' he says.
As for NorthWestern's influence at the Legislature, Fitzpatrick says it comes down to several factors. The company takes a bipartisan approach, working legislators of both parties, has facts to back up its position, and has a reputation as a good employer and business, he says.
"NorthWestern has an excellent reputation on the ground in this state,'' he says. "When you get to the operation of the utility, day to day, on the ground, we do a hell of a job.''
Yet there are those who doubt NorthWestern's sincerity and motivation -- even if they're still in the minority.
"They have a very narrowly defined self-interest that is directly counter to the consumers and the rest of the citizens of the state,'' says Ken Toole, the only Public Service Commissioner to oppose HB25. "The bottom line for them is the bottom line, and that isn't necessarily in the interest of the public.''
Posted in Govt-and-politics on Sunday, February 25, 2007 12:00 am
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