Day of reckoning 

Deciding Montana’s free-market utility fate

The day this column hits print may well prove to be a significant one for Montanans. Thousands of miles away, in Washington, D.C., the Federal Energy Regulatory Commission (FERC) will hold a hearing to determine if Pennsylvania Power and Light (PPL), the company that owns the former Montana Power Company dams and coal-fired power plants, has a monopoly hold over the energy supplies so vital to Montanans. Their decision will determine whether hundreds of thousands of Montana families continue to get gored by the “free market,” or if we will regain some small measure of control over the price we pay for energy produced in our own state.

By any measure, utility deregulation has been a spectacular failure in Montana. Even free-market ideologues like Public Service Commission candidate Mike Taylor—who claims he “voted against dereg” but forgets to mention he voted for dereg just as often—are running away from the dismal outcomes of the idiotic policy they put in place during the Racicot administration.

And well they should. Having destroyed the energy security of the century-old, publicly regulated and vertically integrated system that ensured Montanans would get power produced with the state’s resources at a cost-plus price, the one-party Republican majorities quashed debate, quashed attempts to call the Legislature back into session after MPC announced it would sell off its utility holdings, and quashed a “Buy Back the Dams” initiative—all the while assuring Montanans that free-market competition would deliver us to the land of milk and honey.

Where it’s taken us instead is the land of bitter reality. There is no competition for the utility market in Montana. Period. Thanks to our geographic location and tiny population, we are a captive market and considerably less than attractive to utility investors who want significant returns on significant investments…not an obligation to service thousands of miles of wires and pipes supplying a handful of Montanans.

When PPL first bought the dams and coal-fired units, the company’s executive officers made no bones about the company’s intentions, telling ratepayers that they were “under no obligation to provide low-cost power to Montanans.” Indeed, in this age of merciless corporate policies, a new Golden Rule carries the day: “those that have the gold make the rules.” And the rules nowadays are explicit—get more gold no matter what you have to do, no matter who suffers, and no matter what mess you leave behind.

On Sunday, PPL announced it intends to begin selling power generated by its Montana facilities to out-of-state buyers. Why? Because in 2007 its contracts to supply NorthWestern Energy with power expire and the “free market” can bring them higher profits in states where higher per capita incomes tolerate higher power costs. Montanans can go bark up a tree for all PPL cares.

Was all this entirely foreseeable? Indeed it was. So foreseeable, in fact, that the Public Service Commission began petitioning for Thursday’s FERC hearing a couple years back. Obviously no utility competition ever materialized—despite the phony promises that dripped from the lips of Racicot’s Republican hordes. PPL now owns the largest, closest and cheapest sources of power. Period.

Montanans have no realistic choice of suppliers short of rebuilding an entirely new and redundant utility system—which, given our grim experience, would most likely revert to public regulation. But doing so will only produce power that costs considerably more than that from the hydroelectric dams, which were paid off long ago and run on the free water of our rivers. Plus, Gov. Schweitzer’s expensive dreams of pollution-free coal generation aside, any new sources of power besides wind generation are likely to give the state yet another good dose of industrial pollutants—and more mercury, more greenhouse gases and more acid rain are not regarded as particularly visionary goals these days.

So what will happen in D.C. Thursday? That’s anybody’s guess. Given that our nation continues to suffer under the Bush administration’s propensity to give energy corporations anything they want, we may well see FERC side with PPL. After all, wouldn’t it fit right in with the Bush-Cheney so-called energy plan that has already opened vast areas of the West to exploration and development, rolled back air-quality standards to encourage more coal-burning, and continues to ignore the universally accepted realities of pollution-caused global climate change? Why would Bush political appointees acknowledge that deregulation was a huge mistake for Montana when the Bush administration’s ignominious trademark is never admitting mistakes?

It is just as likely that FERC will simply tell Montanans to get busy building coal-burners if they want energy competition—and too bad about the costs, but that’s the price (literally) the little people have to pay to enjoy all the wonderful amenities brought to them by deregulated megacorporations like PPL.

The reality, of course, is significantly different from anything predicted by free-market theories. The burdens being placed on Montana families and businesses have reached the breaking point, with winter utility bills routinely hitting $400 a month for normal families in normal homes (not McMansions). What gets cut to pay the skyrocketing bills depends on each individual’s or family’s needs—but it’s not pretty. Dump car insurance to pay for heat? Cut back on necessary medicines or health care? Heat or eat? It’s all out there these days and it’s getting worse, not better.

Unfortunately, this is one case where the decision is pretty much out of our hands. Sure, Montanans can write FERC if they wish, but you might be better off saving the postage, since you can rest assured PPL’s lobbyists will be spending lavishly as they throw influence around D.C.’s halls of power.

What you can do, however, is make a decision about the upcoming Public Service Commission race. We trusted free-market Republican ideologues with our energy future once, and look where it got us: hosed. It seems a no-brainer that we should never do so again.

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

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