Ochenski: Power struggle

Somthing really blows about MPC's wind energy deal

| April 11, 2002

Montana’s brutal experience with electricity deregulation is about to get worse as the Public Service Commission (PSC) tackles the daunting task of determining who will get to supply 290,000 former Montana Power Company (MPC) customers with electricity. The future is in the balance for Montana families and businesses, since the portfolio of contracts will determine what sources of power we use, how much we pay, and for how long. Only one thing seems certain: Our utility bills are going up, not down as dereg proponents promised.

But long before the final approval is inked, the PSC will wrestle with a horde of lawyers in a power struggle unlike any this state has seen. With billions of dollars at stake, politicians and other influence peddlers have been hard at it bending arms and making promises. There’s simply not enough room in one column to recap all the machinations surrounding the power portfolio, but one area stands out as a huge battleground in the coming decision: Who will get to build and operate the wind energy portion of Montana’s future power supply?

The issues surrounding the 150 megawatts of energy that are supposed to come from wind energy seems certain to wind up in court, regardless of what the PSC decides. And oh, what a tangled web it is, starting with Montana Wind Harness, the company that got the nod from MPC in spite of not have the lowest price and an internal MPC memo that listed the company’s “weakness” as (and I’m quoting verbatim here): “Experience.”

Sometimes, however, it would seem there are more important things in MPC’s judgment than whether a company has experience. The same internal memo lists the company’s “strengths” as: “Very well-connected politically (if you don’t believe it, just ask ’em).” And sure enough, it looks like Wind Harness is “very well connected politically.”

For instance, there’s the Aug. 17, 2001 letter from U.S. Senator Max Baucus (D–Mont.) to MPC’s Jack Haffey saying: “It’s clear to me that selecting Montana Wind Harness would be a huge asset not only to our state but the economic impacts would be astronomical for Montana. I would like to encourage you not to break the project into several pieces with portions going to each bidder. It’s my understanding that we have a real opportunity to create jobs in Great Falls and Hobson—if the contract is awarded to Montana Wind Harness as a 150 MW project.” The letter concludes: “Jack—thank’s (sic) for taking time to study this issue and If (sic) I can be of more assistance please don’t hesitate to ask.”

Some might wonder what a U.S. senator is doing in the middle of a bid process to produce wind energy. Some might also wonder why Baucus feels it is so important that the entire 150 megawatts be awarded to only one company—especially when the bid price for that company will wind up costing Montanans more for their energy. Those very questions are now being asked by the companies that didn’t get the bid—in spite of having more experience and lower prices.

Nor is Baucus alone in the political connections department. Just two days before Baucus wrote his letter, Jerry Driscoll of the Montana AFL-CIO sent a similar letter to Haffey that states: “I am writing today hoping that you will consider awarding the entire 150 MW of wind power that you have solicited bids for to Montana Wind Harness, LLC.”

In an e-mail to Haffey, Larry Geske of Energy West, a Great Falls energy distributor, writes: “To help him cover the political scene in Montana he has Bob Williams, Ty Robinson, Mike Halligan and others.” Bob Williams is a former state senator and Mike Halligan is one of Missoula’s present state senators. And who might those “others” be? According to Geske’s e-mail, they include Fred Thomas—none other than the Bitterroot state senator who carried the original electricity deregulation bill.

In yet another e-mail, this one from Wind Harness’ James Carkulis to MPC’s Haffey, Chase Hibbard’s name shows up on his “Montana component expertise” listed as “former state representative”—omitting the fact that Chase is also a former MPC board member.

Still want more? How about Carkulis’ name-dropping quote from the same e-mail: “As Congressman Denny Rehberg expressed on Tuesday: ‘James, the downside is not if the wind quits blowing in Montana. The only downside is if we do not do this project.’”

Are all these politicians really involved in this project? Other than those who have personally written letters, it’s hard to tell truth from fiction. For instance, in a recent letter to the PSC and Northwest Energy (MPC’s successor), Montana Audubon’s program director Janet Ellis, writes: “We have learned that Montana Wind Harness submitted information to your company that Montana Audubon was an ‘Associate in long-term avian studies.’ This information was also submitted to the Public Service Commission. As mentioned above, while we support the careful development of wind energy in the state, we have not become associated with any specific wind company.”

The same thing happened for Ron Lehr, a former chairman of the Colorado Public Utilities Commission who was listed by Wind Harness as an “associate,” but who wrote to Public Service Commissioner Bob Anderson to deny the Wind Harness claim: “I’m not affiliated…I have no idea why they listed me as being affiliated with them. I never discussed it with them or agreed to it. Possibly they thought that my name would help their proposal somehow. Or maybe they wanted to handicap themselves to be really fair to the other bidders (not). Is this proposal going anywhere?”

The next few weeks and months should provide substantially more insights, as the PSC takes on the unenviable task of trying to untie this Gordian Knot under what appears to be enormous political pressure. Meanwhile, as more revelations surface day by day, Montanans would do well to keep a close eye on the proceedings. After all, nothing less than our future is in the balance.

When not lobbying the Montana Legislature, George Ochenski is rattling the cage of the political establishment as a political analyst for the Missoula Independent.

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