The regulators 

Why the Public Service Commission matters

If the figures on your gas bill startled you last winter, you may want to pay attention to this year’s race for seats on the state Public Service Commission (PSC). The candidates cannot forcibly lower the charges that appear on your monthly bill, at least not directly and not immediately, but the successful candidate will have a mighty degree of responsibility relating to utility bills. According to the Public Service Commission’s website, the commission’s purpose is “…to ensure that public utilities in Montana provide adequate service to customers at reasonable rates.” Sounds like a snoozer, but in the end, the PSC’s determination of “reasonable rates” affects your pocketbook.

“I just happen to think the race for Public Service Commission is something people really need to pay attention to,” says Alec Hansen, executive director of the Montana League of Cities and Towns. The league represents municipalities across the state and serves as a liaison between cities and state and federal governments. The reason the race is critical, Hansen believes, is that commissioners “have a tremendous amount of authority” over gas, electricity and telephone utilities. Plus, he says, “It’s not a very glamorous job and it involves a lot of hard work.”

Today’s Public Service Commission originally existed as the Board of Railroad Commissioners, formed in 1907. Now, it’s a five-member entity whose members are elected from regional districts (recently redistricted). This year, three seats are up for election, including the seat representing District 4, composed of seven counties in Western Montana including Missoula County. Former Missoula Redevelopment Agency Executive Director Geoff Badenoch and Speaker of the House Doug Mood (R-Seeley Lake) are on the ballot, running as Democrat and Republican respectively.

For 35 years, until 2001, Mood was active with Pyramid Mountain Lumber, Inc., which creates lumber products in Seeley Lake. Over the years, he served as co-owner and member of the company’s board of directors. In 1996, he was elected to the House. One year later, Mood favored deregulation of Montana’s energy markets, and the story of how deregulation failed Montanans, in part, piqued Mood’s interest in the Public Service Commission.

In 1997, he voted in favor of Senate Bill 390, the “Energy Deregulation Bill,” which would precipitate the Montana Power Company’s sell-off of generators, transmission and distribution facilities. The fire sale left customers facing a volatile energy market and increased prices. A number of former supporters of deregulation have now come to regret casting their votes in favor of the bill, since which the average Montana residential electricity bill has increased (as of September) by 37 percent. Mood offers a reminder that in 1997, there was broad-based and bipartisan support for the bill. While he does say that a competitive energy market that presumably would have benefited customers was not in place in 1997, he does not directly admit to regretting his vote in favor of deregulation. “I think it was far premature for Montana to deregulate,” he says.

In 2001, Mood sponsored House Bill 632, which would allow companies that had left the regulated system to return to it. The bill eventually died, but it served as the source of Mood’s decision to enter the race for public service commissioner. “The energy companies hated that bill,” says Mood. “I had to fight with 36 lobbyists in the Legislature.” The lobbyists won.

“That experience led me to believe that we need very strong people facing the utility companies in the PSC because they [utilities] are not altruistic entities,” he says.

Geoff Badenoch has had a markedly different career trajectory, and has a complex perspective on the utility companies. Badenoch earned his public administration graduate degree and his political science undergraduate degree at the University of Montana. For 18 years, he served as the director of the Missoula Redevelopment Agency (MRA), which reclaims blighted urban areas through public and private investment.

“Working in the public sector is something that I’ve always felt called to do,” says Badenoch. His tenure at MRA taught him that the simplistic worldview he favored early on needed tinkering. Badenoch says he entered the MRA with the idea that “government is good; business is bad, greedy and evil.” Soon, he says, he realized that “the people who are in business pay the taxes and create the jobs.”

“That was a very important lesson for me to learn,” he says, and it informed his modus operandi as MRA director: “I developed very early in my career this notion of public-private partnerships.”

It is a viewpoint he would like to carry to the Public Service Commission. The PSC is charged with ensuring customers “fair and reasonable” rates. “It doesn’t say screw the company. It doesn’t say let the company go hog-wild,” says Badenoch.

“For the well-being of Montana, these companies have to be healthy,” he says.

Badenoch prides himself on being the prepared candidate. He has attended PSC meetings in Helena over the past 12 months. He has read and collected documents released by the PSC. If elected, says Badenoch, “my learning curve is not going to be the steepest.”

Badenoch’s position as MRA director was nonpartisan, and he says that deciding whether to run as a Democrat or Republican was “a real gut-check.” He’s taken a look at the voting record of commissioners, and is pleased that most votes are five to zero. Badenoch believes the bipartisan votes are the result of sound information provided to commissioners by the PSC’s “very good staff.”

Current Commissioner Greg Jergeson, whose term lasts until 2007, understands the responsibilities and priorities that new commissioners will face. “I think NorthWestern will continue to be front and center,” he says of the utility company that purchased Montana Power Company’s regulated assets and is now emerging from bankruptcy.

As for the price-tag attached to your gas bill, current and candidate commissioners are in agreement: Don’t look for a steep drop anytime soon.

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