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Capital Eyes: Power to the People

A plan to put the public back in charge of Montana’s energy

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For normal Montanans, who are too damn busy just trying to raise their kids while keeping families, jobs, farms and ranches together, the Legislature comes and goes and all they know is they wind up paying more taxes one way or another. When the wacky issues like public nudity or designating a state butterfly come up, they shake their heads and wonder, sometimes out loud, why the hell they’re paying for this nonsense. But when it comes to issues like electricity deregulation, most folks out in the far-flung corners of Montana only know that mines, mills, smelters and refineries are suddenly shutting down because they can’t afford the skyrocketing market prices being charged for electricity that has been cheap and abundant for a century. As for how market prices came to Montana, well, near as most folks can recall, it had something to do with the Legislature, didn’t it?

As luck and local lore would have it, it did have something to do with the Legislature—way back in 1997. And now it’s up to this Legislature to get us out this mess. Speaker of the House Dan McGee says the problem can be worked out “over a cup of coffee.” But you know what? There have been two months worth of opportunities to have a thousand cups of coffee over which to work out the solution to Montana’s deregulation disaster. But so far, it hasn’t happened.

So here’s a modest proposal. First, let’s ask how much electricity Montanans need to run our businesses and homes. The answer, which will shock most people, is that Montanans only use about 40 percent of the electricity we currently produce from hydroelectric dams and coal-fired generators. The rest gets exported. While the Legislature is busy slashing environmental laws to hasten construction of more generators, we don’t really need more generation; what we need is to control about half of the capacity we already have.

So how do we get what we need to live here and stay in business? The complex and convoluted schemes being proposed by the Legislature simply don’t get the job done—and for sure they don’t keep the price affordable for those living on Montana’s last-place wages. The simplest long-term answer is to buy back the dams at fair market price and ensure future generations of Montanans an ongoing supply of renewable power. In the long run, regaining control of the water rights that transferred to out-of-state corporations when they bought the dams may wind up being as valuable as the energy. The state’s negotiations with the dam owners can be backed up by the power of condemnation—the right to force the sale because of the need to serve the greater public good. For the naysayers, rest assured that condemnation is nothing new; it has been used by both government and private corporations to build the railroads, transmission lines and transportation corridors that cross the nation. And now, Montana should use that power to return a basic resource—using state-owned water to generate electricity—to the citizens who live here.

To sweeten the deal, we can even contract with the same private interests that have been running these dams for a century to continue to do so. Only we will own the resources, and we will ensure that Montanans are paying electricity prices that are based on the cost of production—not on whatever the national or regional market will bear. We can offer, as we did in the days of regulated power, a reasonable percentage of profit for the private operators—but we will end corporate profiteering at the expense of Montana’s businesses and families.

And how would we fund such a scheme? Not so tough. We have a $640 million dollar Coal Trust Fund that provides an outstanding backup for government bonds. We could issue them on the strength of our Trust and pay them off over the long term through the revenues generated by the sale of the power—at “cost plus” to Montanans, but at “market price” to out-of-state interests. The Legislature has the power to create a trust within a trust for these purposes, which would both preserve the Coal Trust and provide interest earnings to pay off the bonds. As Montana’s energy needs expand, we could invest both our power and interest earnings in solar and wind energy, turning our state into a totally green power state—which would surely draw those seeking a high quality of life and a predictable energy future.

The Legislature has a pile of huge problems to solve, but energy supply may be the biggest and baddest of the lot because it affects virtually every sector of our lives. In the second half, legislators could work together to regain control over our dams and solve the deregulation disaster. Granted, it would take slightly longer than having a cup of coffee to do the hard work necessary to secure such a lasting gift for future generations of Montanans. But it could be done—they do, after all, have 45 days left. If, on the other hand, the political games continue to dominate the session and the problem doesn’t get solved, something tells me an initiative might just show up in the very near future.

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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