For months now Montana’s Public Service Commission (PSC) has been desperately waving warning flags of a pending crisis in affordable utilities. Their message has been simple: The cost of natural gas is already higher than it should be in mid-winter and summer is normally the time utilities would be buying gas at low prices and storing it for winter use. Only this year, like everything else in the crazy, deregulated energy market, speculation and demand have erased the summer price decline. Finally, in what can best be called a good start, Gov. Brian Schweitzer has decided to respond by issuing an Executive Order and releasing a million dollars for low-income weatherization.
In Executive Order 36-2008, which was issued on Monday but went almost unnoticed by the press, Schweitzer declared “A State of Energy Emergency” and gave the following reasons for his actions:
• In recent months, energy rates have reached record high levels and are predicted by major suppliers to increase by 54 percent or more during the winter months.
• Canadian natural gas formerly destined for Montana is expected to be diverted for use in Canada, and the purchasing power of the U.S. dollar has fallen 20 percent relative to the Canadian dollar.
• Use of natural gas for electricity peaking power is increasing demand and prices.
• These increased energy rates will translate into extraordinary increases in home and business heating expenses in the coming winter months, causing further hardship.
• Transportation energy prices are now causing hardship on low and moderate income Montana families as gasoline and diesel costs escalate dramatically.
• Speculation in oil and gas markets is exacerbating energy price increases.
• Many low to moderate income Montanans live in housing that would benefit greatly from weatherization efforts.
• Now, during warmer months, when work is more efficient to perform and costly heat energy is not lost, is the time to prepare for the inevitable cold weather by weatherizing homes to mitigate, as much as possible, cold weather home heating costs.
• Many Montanans who would benefit most from weatherization efforts are unable to either perform the work themselves or afford to pay contractors to work for them.
• The State of Montana is committed to heading off potential energy crises for our most vulnerable families.
• A situation exists that threatens to seriously disrupt or diminish energy supplies to the extent that the life, health or property of those Montanans in greatest need of financial energy assistance may be jeopardized.
Schweitzer got it exactly right with the scope of the disaster headed in our direction, and it’s not often that you see such explicit language in official government declarations because, of course, they don’t want to panic the citizenry. But given the situation, it’s not an overstatement or exaggeration of what we can expect to face when we open our utility bills in a few short months as the temps plummet, the snow flies and Montanans are faced with making decisions between heating, eating, medical expenses and trying to fill the tank to get to work.
The governor should also be applauded for attempting to take care of those Montanans who will undoubtedly be hit hardest by across-the-board fuel costs. Running the million dollars through the Low Income Energy Assistance Program, which, by all accounts, is well run and efficient given the daunting task it faces and the minimal resources upon which it can draw, was smart.
But the reality is that Montanans are still down near the bottom of the barrel in per capita income, coming in about 44th nationally—and that’s just slightly more than half of the highest-ranking states. Unregulated commodities like natural gas, however, go for whatever the market will bear, with no regard to where a state’s citizens wind up on the per capita income scale. Hence, Montanans, who are especially hard hit because it gets dang cold up here in the far northland, undeniably wind up spending a much larger portion of their income on heating fuels than our fellow citizens in more temperate states. And therein lies the rub.
Given the huge percentage of Montanans now facing the combined “triple whammy” of radically higher costs for food, gas and utilities, a million bucks spread across Montana’s nearly one million citizens comes out to about a buck each—and you don’t get much weatherization done for a dollar these days. Even if you drop the numbers to 100,000 people—or one out of 10 Montanans—the infusion of cash offered by
the governor to face the pending crisis comes out to be $10, not counting labor costs. Realistically, as anyone who has been to the hardware store recently can tell you, $10 will barely get you a roll of duct tape and a small roll of plastic, let alone insulation, caulk or storm windows.
More likely costs to weatherize a Montana home for a Montana winter would be several hundred dollars, at a minimum. If you spend $100 on a home, that means 10,000 Montana homes could get some minimal amount of weatherization with Schweitzer’s plan. If you double that, we’re down to 5,000 homes, or about half of one percent of Montana’s population.
This is not to say that Schweitzer should be criticized for taking these baby steps toward meeting the coming crisis—to the contrary, he, as well as the PSC, should be commended for bringing the issue to the attention of our citizens in such a frank manner. But make no mistake, these are truly baby steps in comparison to the size of the problems that have beset Montanans since gas prices went through the roof and that will be substantially exacerbated by heating costs in just a few short months.
Schweitzer has given us a good start. It wouldn’t be too much for our legislators to consider calling themselves into a special session to put $100 million into an expedited effort—unless, of course, they have other priorities.
Helena’s George Ochenski rattles the cage of the political establishment as a political analyst for the Independent.