Capital Eyes-Deregulation is Dead 

Can an end to Montana’s most contentious issue be far away?

As the clock runs down on the 2001 legislative session, the widespread confusion over what to do about Montana’s energy problems is tumbling out-of-control. But one thing seems certain—deregulation, the 1997 Legislature’s disastrous decision to deregulate electricity suppliers—is dead. Major industrial operations are being forced to shut down because they can’t afford the new whatever-the-market-will-bear prices for electricity. Meanwhile, hundreds of thousands of Montanans are scheduled to find themselves, their businesses and their families in a similar situation come July 2002. And how, with last-in-the-nation wages, will Montanans ever survive a tripling, or, as the industrial closures bear mute witness, a ten-fold increase in the cost of the power we need for our homes and businesses? Simply put, we can’t. Not the citizens, not the farmers and ranchers, not the government agencies or the universities. Plain and simple, we can’t afford to pay even twice as much for our electricity—and that’s the most favorable prediction for our future. Which is why dereg is going to die.

In spite of the feeble defense being mounted by Republican free-market diehards, the once-fierce dereg dragon that snapped off the heads of our industrial sector and turned its avaricious eyes on the general populace, is now bleeding from a hundred wounds, attacked by virtually everyone from businesses to environmentalists. Just last week, even the Republican-dominated Public Service Commission moved to re-exert regulatory authority over electric utility suppliers. Meanwhile, there are dozens of energy bills in the Legislature that do everything from mandating re-regulation to condemning the hydroelectric facilities and power plants and bringing them under public ownership. So far the horde of industry lobbyists, legislative leaders, and even the Governor herself have been unable to agree on a solution for the runaway electricity prices, but one thing seems certain: Montana’s brutal experience in the economics of the energy market have left the state shaking in its boots and now, finally, beginning to fight back.

On the progressive side, Sen. Ken Toole, a Helena Democrat, thinks buying back the hydroelectric dams that Montana Power sold to Pennsylvania Power and Light will ensure residential and small business customers cheap “cost-plus” rates into the foreseeable future. He has introduced SB 503 to set up a Public Power Authority and SB 503 to take the question of buying back the dams directly to the citizens as a referendum. The idea has proved so popular that a website has been established by citizens to support the concept (www.damcheappower.com). While Toole’s ideas for controlling our own power-producing resources were initially viewed by many legislators as radical, Sen. Mike Taylor, a Republican leader, recently announced that he, too, would be introducing legislation to establish a Montana Power Authority. Under Taylor’s plan, the power authority would have the legal ability to condemn not only the dams but thermal generation facilities as well. Taylor believes Montana should own enough power facilities to supply residential, small commercial and industrial needs.

Meanwhile Governor Martz, facing the double whammy of a tight budget and collapsing industrial sector, says she’s open to all options—including condemnation of the power facilities—to end Montana’s energy nightmare. She has announced her intent to implement an ambitious energy conservation effort throughout state government and hopes to achieve a 10 percent or more reduction in state energy use. On this point, Governor Judy is right. The environmental community has rightfully found itself at odds with virtually all of the new governor’s policies but should now take this opportunity to work with her on the energy conservation initiative. As study after study has shown, conservation is by far the cheapest source of new power. Just by turning off lights, turning down thermostats, and becoming more energy conscious—things which normal Montana families do as a matter of economic necessity—the state can reduce its costs, save taxpayers a bundle, and free up power for other uses.

Nor should the conservation effort end with state government. The same methods that work for the state will work for municipalities and the University system, too—again saving taxpayers millions. And, while the Legislature seems willing to consider slashing taxes and dumping hundreds of millions of public dollars into the construction of more coal-fired generation plants, think of the long-term economic and environmental benefits investing even a fraction of that sum in conservation would produce for Montana’s families and businesses. The Legislature should take a tip from Gov. Martz and give conservation a good long look before they wallow in risky and expensive supply-side solutions that may not solve our energy problems—but will certainly wind up dumping even more pollutants into our atmosphere and exacerbating the mounting problems caused by global warming.

Much good can still be done in the remaining 30 days of the 2001 session—especially if the Republican majorities give up their failing defense of dereg. If California, with all its people and all their wealth cannot make deregulation work, it is certain that Montana, with its small, poor and widely dispersed population, doesn’t have a chance in the free-market free-for-all. The Legislature is elected to act in the best interests of the people they represent. For all the obvious reasons—and for all the people throughout the spectrum of Montana’s great diversity—this means that they must finally admit that the failed economic experiment called deregulation is dead. And if the Legislature doesn’t have the guts to drive the final stake through dereg’s black heart, they can rest assured that the people of Montana will.

George Ochenski has lobbied the Montana Legislature since 1985. He is currently working as a lobbyist for a consortium of Montana’s tribes.

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