Power Play 

The backroom deal that put Montana back in the Kilowatt Collar

Last Saturday the less-than-stellar 2001 Legislature called it quits and left town in a state of extreme political acrimony following closed-door deal-making between the Republican majorities and the energy corporations that are now calling the shots on Montana’s future. This first post-term-limits Legislature set a new low in Montana politics for its lack of diplomacy, problem-solving, and fair play during its 90 days in Helena. The heavy-handed, short-sighted majorities muscled through an anti-environment, anti-worker, corporate-dictated agenda, leaving many Montanans disappointed and angry. But the power play by PPL Global and Montana Power Company on the 89th day set a new low, even for this bunch.

It seems funny, thinking back on last year’s elections, that in all the hot air spewed over education and economic development, so very little was said about electricity deregulation. By the time the session started however, the availability of affordable electricity had clearly become the state’s single greatest problem, with thousands of Montanans out of work because their industries could not afford the power they need to operate. As the problem worsened and electricity prices continued to skyrocket, hundreds of thousands of consumers, small businesses, schools, universities, and government institutions are filled with fear, pondering a future in which the price of electricity doubles, triples or more.

In spite of the magnitude of the problem, Republican leaders, such as Speaker of the House Dan McGee, continued to dwell in a state of rhetorical denial, even going so far as to assure Montanans that electricity deregulation was “a quiet success” and that any problems “could be worked out over a cup of coffee.” Day after day as the session ran out, Montana’s citizens waited in vain for a solution they could afford. But there was no solution by half-time, no solution at the third quarter, and finally, with only one day left in the session, “the solution” was announced by the Republicans. Unfortunately, it isn’t a solution at all—and it certainly wasn’t a product of the open, public policy decision-making Montanans expect of their Legislature. Instead, once the horde of utility lobbyists got done with its influence-peddling, Montanans wound up with a new Kilowatt Collar, brought to us by the Montana Power Company—the same geniuses that told us back in 1997 that we would have lower power rates if we deregulated our electric markets.

“The deal,” which smells worse than a fish market on a hot day, works like this: Shortly after pushing through a disastrous electricity deregulation bill in the waning weeks of the Republican-controlled 1997 legislative session, Montana Power Company sold off the generating plants and dams—which had been paid for by Montana’s citizens during a century of rate-based construction—to a megacorporation named PPL Global (PPL stands for Pennsylvania Power and Light). These new owners of the facilities that convert Montana water and coal into electricity paid MPC about $800 million for the package. Under the ’97 dereg law, electricity prices that could be charged to Montana consumers remained capped until next year, or until a “competitive market” developed.

To make a long, ugly, story short, competition has not developed. Instead, the market rates for electricity have gone off the charts, shutting down mines, mills, smelters, refineries and other large industrial consumers who left the MPC system in an attempt to find lower power costs. Now, in order to supply Montana’s residents and customers with the electricity vital to their survival, MPC has to buy electricity from PPL. Both of these corporations enjoyed significant profits making and selling electricity last year under the capped rates, with MPC clearing $200 million and PPL making $88 million. Under the deal, MPC will now pay PPL at least twice as much for that same electricity. And Montanans will see their utility costs jump by a minimum of 50 percent. In return, these energy kings required the Legislature to kill the bills that would have protected consumers, restored affordable electricity to industrial consumers, and slapped an excess profits tax on rapacious power costs. Goaded by the corporate lap-dogs in the Governor’s Office, the Legislature dutifully killed the consumer protection bills. Once again, as has happened so often throughout the last century, the corporate pirates get the gold while Montanans get the shaft.

If you want to have some fun, ask your local legislator just how this deal works. It won’t matter if he or she is a Republican or Democrat; chances are they will be wholly unable to explain it to you. Why? Because they do not understand it. Why don’t they understand it? Because they were not party to the negotiations. These two corporations cut the deal in a back room—not in the Capitol—and, so sorry, our elected officials were not invited. In one of the most ignominious moments of the 2001 Legislature, the Republican leaders and Gov. Martz simply took what they were handed and used their bully pulpits to proclaim it a success. While his colleagues mouthed their lines, Speaker Pro-Tem Doug Mood told the story a little more clearly: “PPL came after the bill with their top brass as hard as they could—PPL and Montana Power—and they’re getting what they want. Now, what does that tell us?”

What it tells us, as Rep. Mood knows only too well, is that critical decisions for Montana’s future are not in the hands of its citizens or their elected representatives, but in the board rooms of the corporate pirates who continue to plunder our state. While questions about the deal abound, perhaps the biggest question is what Montanans will do about it. Sen. Jon Tester (D-Big Sandy), a critic of the deal, put it bluntly when he said, “If we raised taxes 50 percent, we’d get run out of this place.” Tester is right. Montana’s citizens and businesses got hosed by the deal and, come the next elections, they should take their fully justified revenge and run the rascals who bowed to MPC’s and PPL’s power play right out of office.

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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