Senate mulls bill to buy back dams 

As California is plagued by rolling blackouts and skyrocketing utility rates as fallout from its own failed experiment with deregulation, a bill now gaining momentum in the state Senate would allow voters to decide whether Montana should buy back its hydroelectric dams to benefit small energy customers.

Senate Bill 503, sponsored by Sen. Ken Toole (D-Helena), would place on the November ballot a citizen referendum to allow the state to buy back the hydroelectric dams sold to Pennsylvania Power and Light by the Montana Power Company in June 1999. Should the measure be approved by voters and signed into law, the dams would be operated by a State Power Authority and dedicated to small electricity consumers, namely small businesses, irrigators and residential customers. “This is all about small customers,” says Toole. “The big guys are having trouble now, but within a year or two they have big enough loads that they’ll be able to play in the regional markets. Small customers won’t.” According to Toole, Montana’s hydroelectric dams generate about 385 megawatts of electricity, or roughly 70 to 80 percent of the demand from small customers. SB 503 is aimed at helping those customers who consume less than 1,000 kilowatts, he says and would exclude the state’s largest energy consumers, such as Smurfit-Stone Container, the Columbia Falls Aluminum Company and the big oil refineries in Billings.

According to Toole’s calculations, the dams could be purchased for roughly $266 million and financed over 30 years.

Since the start of California’s energy woes last year, many in the Montana Legislature, especially those who initially pushed for deregulation back in 1997, have blamed the current crisis on a lack of supply and have been calling for the construction of new coal- and gas-fired generating plants in Montana. In fact, about half of the electricity generated in Montana is already exported out-of-state.

While SB 503 has elicited widespread support among Senate Democrats—according to Toole, only three have not yet signed on as co-sponsors—Toole is less than optimistic that the governor will back it.

“By and large, this issue cuts right down party lines up here,” says Toole. “All of the calls for bipartisanship out of the [Martz] Administration and the Senate leadership ring a little hollow.”

Still, some lawmakers see a citizen referendum as the best way to engage the public in a debate about deregulation that will soon affect every small utility customer in Montana, whose rates are expected to double or even triple after July 2002.

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