Montana regulators hold hearing on $900M dam deal

Associated PressJuly 8, 2014 

— Montana utility regulators will determine whether electricity customers will have stable rates in the future or if they'll be subject to the whims of a volatile power-supply market, an attorney for NorthWestern Energy said Tuesday.

Al Brogan told the Public Service Commission Tuesday that its decision to support or deny NorthWestern's $900 million plan to buy 11 hydroelectric dams from PPL Montana is the most important decision that will be made in his lifetime. Brogan spoke during the opening of a two-week public hearing held by the commission at the state Capitol in Helena to determine whether the deal is in the public interest.

NorthWestern, the largest electric and natural gas utility in the state, announced the deal with the dams' current owner PPL Montana last year. The commission must give its approval for the sale to move forward.

The Montana Consumer Counsel, which represents the interests of utility consumers, has raised concerns about the proposal. Bob Nelson of the consumer counsel said Tuesday that while stable prices for customers are a worthy goal, the predicted costs involved might be too optimistic.

The counsel wants shareholders, not ratepayers, to be financially responsible if the company didn't budget enough for operations and maintenance of the dams.

"The related costs have to be weighed against that benefit," Nelson said of stable prices. "If they're stable at the top of a range, they're simply no bargain."

If the sale goes through, NorthWestern's 342,000 electricity customers will see an immediate rate increase of about 6.2 percent, Brogan said Tuesday. That would add about $5 to an average customer's electric bill each month. That amount would be on top of a recent 6.4 percent rate hike.

The dams, which are on the Missouri, Madison, Flathead and Clark Fork rivers and West Rosebud Creek, were built from the 1940s to the 1960s. They were owned by the Montana Power Co. until PPL bought them during deregulation in the late 1990s and early 2000s. Combined, the 11 dams have capacity to generate 633 megawatts of electricity, or as much as a large coal-fired power plant.

The proposed purchase is backed by Gov. Steve Bullock and has received unanimous endorsement from the legislative Energy and Telecommunications Interim Committee, which has jurisdiction over the Public Service Commission. The commission will take those opinions into consideration as well as those from the public, including input from 17 hearings on the topic. The commission also has received thousands of pages of evidence, Chairman Bill Gallagher said.

"The key question we have to answer is do the benefits outweigh the risks," he said.

Public comment also is being taken during the hearing, and people can still comment online, by mail or email.

The Federal Trade Commission has ruled the purchase does not violate antitrust laws.

The commission is expected to make a decision in September, Gallagher said.

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