Critical Mass 

Will initiatives and MPC shareholders’ revolt derail dereg?

At a time when people are trying to kick back, head for the hills, and enjoy what’s left of Montana’s short and glorious summer, any semblance of alpine tranquility seems far, far away from the state’s energy arena. A new lawsuit, a stockholder revolt, and flock of pending citizen initiatives have combined to reach critical mass and throw Montana’s ill-fated electricity deregulation experiment into utter chaos.

Last week one of the most powerful groups of Montana trial lawyers ever assembled filed a $3 billion class action lawsuit against the Montana Power Company (MPC) on behalf of disgruntled stockholders. The complaint alleges that MPC is facing financial hardship because corporate officers conspired to sell off the utility’s hydroelectric and coal-fired power plants to Pennsylvania Power and Light (PPL) without letting stockholders vote on the drastic action. Since the 1999 sale, MPC stock has crashed to a fraction of its former value and those who held shares, which many bought because MPC was a stable, profitable, regulated utility, have lost an estimated $3 billion. If successful, the suit could overturn the sale of the facilities or require that all PPL profits realized from the Montana assets since the sale be placed in a trust fund to repay MPC stockholders for their losses.

While no one knows how the massive lawsuit will turn out, one thing is certain: The stockholders’ attorneys are some of Montana’s most experienced and successful trial lawyers, and none of them are known for wasting either time or money filing nuisance suits. Adding to the problems, the suit comes just weeks before an MPC stockholder meeting at which the corporation hopes to receive approval for the sale of its transmission facilities to North Western Corp. That sale, should it be approved, would complete the corporate transformation of MPC from a utility to a telecommunications company. But given the poor performance of MPC stock, the general crash of the telecom sector, a powerful new lawsuit, and the betrayal many feel over the utility’s generation divestiture scheme, it is no sure thing that angry, disgruntled stockholders will go along with selling off what’s left of MPC’s utility assets.

The continuing consequences attributable to our electricity deregulation experiment would make anyone in their right mind want to end the bad dream. Or at least anyone except Sen. Fred Thomas, the Stevensville Republican who sponsored the 1997 deregulation bill and who now sits as chairman of the utility-funded Transition Advisory Committee. These days Thomas is outraged at Michelle Lee, the upstart freshman legislator from Livingston who is running an initiative campaign called “Dump the Deal” that could result in the repeal of HB 474, the 2001 Legislature’s key energy bill (for info, check out www.dumpthedeal.com). Sen. Thomas has summoned Lee to appear before his committee for what looks like a witch hunt. Undoubtedly Thomas hopes to discredit Lee’s efforts in front of the press and put the boots to her initiative. But, just as with the spectacular failure of his dereg legislation, Thomas is maybe in for a surprise. Rather than melting down at his imperious summons, the fearless Lee has geared up for the fight—and she won’t be alone. Citizens, fellow legislators, and host of supporters plan to show up to back both Lee and her efforts. In the end, Thomas’ intimidation tactics may backfire as he and his industry cronies get painted as villains while Michelle Lee and her band of citizens are portrayed as just what they are—Montana consumers who are both appalled and outraged by the corporate manipulation of the state’s electricity supply.

Nor is intimidation the only tactic being used. Garnering the "Energy Whopper of the Week Award” is Leo Giacometto, one of Montana’s representatives on the Northwest Power Planning Council. It wouldn’t be unreasonable to suspect that Giacometto, a Martz political appointee who is paid handsomely to represent our state in planning the electricity future for the Pacific Northwest, might provide some insight to the troubled energy situation. Instead, in a recent op-ed column, Giacometto went on the warpath against efforts to repeal HB 474, claiming “An insufficient amount of electricity is a problem in Montana and throughout the West,” and “irregardless of the ownership of the generation there is not enough electricity in Montana to meet all our needs.”

Given that Montana is a net exporter of electricity, Giacometto’s contentions don’t make sense. If we didn’t have enough electricity to meet the needs of the state, how could we possibly wind up exporting nearly half of the electricity we generate? But that’s not the worst of it. In an obvious effort to fabricate a crisis and panic Montanans, Giacometto also claims that we are “experiencing a decrease in the reliability of our system” and “there is a 12 to 17 percent chance that consumers (sic) electricity requirements cannot be met this winter.” Unfortunately, the Bonneville Power Administration (BPA), the very federal energy marketing organization that he’s supposed to be working with, doesn’t appear to back up Giacometto’s alarmist claims. Instead, the BPA’s spokesman recently told Oregon reporters, “We’re in pretty good shape. We’ll have enough water to meet our firm load requirements, but there won’t be any surplus to sell.”

Make no mistake, Montana’s Republican leaders are resorting to such scurrilous tactics because they’re running scared. The free-market mavens would like us to believe that if we publicly fund hundreds of millions in new generation facilities—and endure the subsequent increased pollution—their wacky deregulation theories will work. But in reality, when electricity prices skyrocketed, consumers were forced by pocketbook concerns to cut back consumption. Now, as market prices drop below the great “deal” price the last legislature almost roped us into, the arguments for more generation, more pollution, and more consumption ring hollow. Instead, an angry citizenry, chafing under the corporate collar and tired of our politicians’ lame excuses, has reached critical mass. The pending explosion could well blast the Repubs from office—and that, as always, is their main concern.

When not lobbying the Montana Legislature, George Ochenski is rattling the cage of the political establishment as a political analyst for the Missoula Independent.

  • Email
  • Print

Comments

Subscribe to this thread:

Add a comment

© 2014 Missoula News/Independent Publishing | Powered by Foundation