Sticker shock 

The high price of disowning de-reg

Political pundits searching for the so-called “hot button” issue in Montana right now need only stand in a check-out line at their local grocery store and listen to what people are talking about. Without fail, it will be the cost of their power bills this winter and the most common statement, said with shock and disbelief, is: “Mine doubled!”

Needless to say, this is not what Montanans were promised would happen when the 1997 Legislature hastily decided to deregulate the state’s electric and gas utilities. Sen. Fred Thomas (R-Stevensville), who carried the electricity deregulation bill, was joined by virtually all of his fellow Republican legislators in projecting a rosy future for Montana’s consumers once “competition” drove down utility costs as a host of providers slashed prices to gain customers. Instead, our bills have doubled.

Although immoveable ideologues like Thomas have argued ceaselessly that their rush to deregulate was correct, the sad truth is that there has been no public policy fiasco in recent times that even comes close to the avalanche of negative fallout from the decision to leave the supply of these most basic necessities in the hands of so-called “free market” forces.

Faced with the grim realities of their policy failure—and the potential for an overwhelming political backlash—the Republican Party has decided to do what politicians always do: Find someone else to blame. In this case, they have decided to divorce themselves from dereg by pointing out that there were plenty of Democratic legislators who also voted for deregulation—so it wasn’t just a Republican blunder.

If the results weren’t so tragic, such logic would be laughable. At the time the deregulation bills were passed, the Republicans held solid two-thirds majorities of both houses of the Legislature with Marc Racicot, who was sitting in the governor’s office, putting his entire support behind the measure. To refresh your memories, the deregulation bill didn’t even surface until the last weeks of the session, and only then because the Legislature voted to suspend its own rules to allow the late introduction of the bill.

Regardless of the political blame game, however, the realities facing the state in the wake of deregulation are daunting, indeed. For one thing, given the extreme volatility in utility prices, many are wondering just how “free” the free market really is. Just last week the Public Service Commission voted to authorize Montana’s Attorney General to investigate possible manipulation of commodity prices by utilities. Similar manipulation of the market was found to have occurred during California’s “energy crisis,” driven by a number of large utility corporations, including Enron. Even the Federal Energy Regulatory Commission has admitted that the industry-set “market indices” upon which prices are based have enormous potential for manipulation and error. It should come as no surprise that those errors have often resulted in higher costs for consumers and tidy profits for utilities.

While it will be interesting to see what our AG finds out in his market manipulation investigations, most of the impacts from our skyrocketing utility bills are much more immediate. Unlike their utility bills, few, if any, Montanans have had their incomes double in recent times. What this means is that every additional dollar that goes out to pay for utilities is no longer available for other spending priorities. In the average Montana family, that means less for food, health and dental care, education or recreation. For the average Montana business, runaway utility costs mean less can be spent on other business needs such as improving facilities, adding new employees or increasing stock.

Taken together, the double-whammy on both the residential and business communities mean Montana, under its benighted political leadership, has now gone backwards in making the state an attractive place to live and work. In simplest terms, those looking to relocate to Montana for either business or personal reasons must now factor these very high utility costs into their financial equations. Obviously, sky-high utility costs will result in some portion of those who may have decided to make Montana their home looking elsewhere—either for places with lower, controlled utility costs, or climates that do not require so much energy just to keep from freezing. It will also drive some existing residents and businesses to shut down or simply leave the state for more affordable areas.

For those who have no intention of leaving, however, something must be done. The impacts from the higher utilities are not confined merely to our homes and businesses. All of our government buildings, from municipalities to universities, are also facing the grim cost of higher utilities. These costs will be passed down directly to residents in the form of higher property taxes, special mill levies to keep the schools heated, and higher tuitions for a university education.

Unfortunately, there is a virtual leadership vacuum on this issue right now. Early last fall, a small group of Democrats came out with a call to “re-energize Montana” through more public ownership of our energy producing assets. Unfortunately, the idea seems to have disappeared almost as soon as it was announced, and there has been virtually no follow-up by the Democrats to keep the idea alive. Instead, like the Repub’s move to divorce themselves from dereg, both parties would rather shovel the issue under the rug than come up with workable answers to this economically and socially crippling issue.

Which begs the questions: Are we so politically inept that we will cede the well-being of our people and businesses to corporate pricing whims? Have our legislators been so neutered by corporate lobbyists that they can no longer stand up and pass laws to protect Montanans from these depredations? Have we been so bullied that we now admit we no longer control our own destiny or have the ability to take care of ourselves?

Unfortunately, the silence from our political leaders is deafening—while the burden of out-of-control utility prices continues to crush our populace.
When not lobbying the Montana Legislature, George Ochenski is rattling the cage of the political establishment as a political analyst for the Missoula Independent. Contact Ochenski at

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