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PSC holds public meeting on Montana Power sale



In response to concerns about possible spikes in energy costs later this year resulting from electricity deregulation, the Public Service Commission (PSC) is holding a public meeting in Missoula Thursday to get feedback on Montana Power’s restructuring.

The Montana Power Company (MPC) is getting out of the power business piece by piece and focusing on telecommunications. The process began with the 1997 deregulation of Montana’s energy market.

The first phase of MPC’s restructuring occurred in 1997 when the company decided to sell its coal and hydroelectric power generating plants to Pennsylvania Power and Light. Now the second phase involves MPC’s proposal to sell the remainder of its energy-related businesses, notably its gas and electricity distribution system.

The PSC will be looking at the restructuring in three parts. The public meeting in Missoula will look at two of those. One is the sale of Montana Power’s remaining public utility obligations to South Dakota-based NorthWestern Corporation; the other is Montana Power’s transition costs. Sometimes called “stranded costs,” these are costs that MPC incurred before deregulation.

Commissioner Bob Rowe says he is holding the hearings to ensure a “significant amount of citizen involvement.” From what he has heard, Rowe says Montanans are most concerned about the effects of restructuring on rate prices and stability, the environment, and resource diversity.

“Generally, MPC and NorthWestern are suggesting the utility should remain the same and customers won’t see any difference,” says Will Rosquist, a PSC staff member.

According to a PSC summary of the restructuring cases, there has already been some disagreement between the commission and MPC over the scope and implications of the investigation.

“MPC believes that the PSC’s authority is limited to a review and determination that the purchasing entity will be able to continue to provide adequate utility service at just and reasonable rates,” reads the summary. “The PSC believes its authority is broader and would allow the Commission to place appropriate conditions on the sale, based on the record.”

The particular proposal the PSC is looking at is an agreement worked out between MPC, NorthWestern, the Montana Consumer Counsel, and a group of large industrial customers. The PSC says it will result in lower rates than MPC’s original proposal.

A third aspect of the restructuring will be examined at a different meeting in the future. This concerns a legislative mandate for MPC to put together a portfolio to provide power to “default supply” customers through 2007. These are customers who have no choices for competing energy providers because none serves their area or customer type. It is a group that includes most homeowners.

The meeting will be held Jan. 17 at 7:15 p.m. in the Missoula City Council chambers.


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