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Montana PSC scolds Mountain Water, Liberty, for ‘unauthorized’ transaction

By Martin Kidston/MISSOULA CURRENT

The Montana Public Service Commission left the door open Friday for further action against two companies that exchanged ownership of Mountain Water Co. without the board’s review.

In a work session that played out Friday afternoon in Helena, the PSC moved to file a complaint in District Court levying fines against Mountain Water and Liberty Utilities Co.

Liberty, owned by Algonquin Power and Utilities Corp. based in Canada, quietly purchased the Mountain Water from The Carlyle Group in early January.

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Bob Lake, R-Hamilton

That surprise action didn’t sit well with members of the PSC, including Bob Lake, R-Hamilton, who represents the district that includes Missoula.

“It’s very unfortunate that the PSC was unable to review the purchase application through the proper procedure,” Lake said. “The commission’s actions today aim to ensure that the customers of Mountain Water are not harmed while the utility remains under private ownership.”

The city of Missoula could take ownership of Mountain Water in matter of weeks or months, barring intervention by the Montana Supreme Court, which is scheduled to hear the company’s appeal regarding on an earlier court ruling in April.

Earlier this week, Missoula CAO Dale Bickell told members of the City Council to expect an ordinance regarding municipal governance of the utility in the coming weeks. An emergency ordinance could come sooner, he said, depending on how the proceedings play out.

“We’re trying to be proactive in our approach to this,” Bickell told the council. “The timeline related to the transition is not necessarily in our control. We wanted to be able to get as much work done, proactively, as we can related to creation of the utility.”

The PSC agreed unanimously Friday to scold Liberty and Mountain Water for the unauthorized exchange of the utility. The commission also directed PSC staff to consult with the Montana Attorney General’s office to explore further remedies against the company, and to pursue additional fines.

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Brad Johnson, R-East Helena

According to Montana law, the companies could be subject to penalties as high as $1,000 for each violation. Such fines, the PSC said, would be recovered in a civil action initiated by the commission.

“We want to make it clear that the PSC will not allow companies to move forward with sales and transfers of this nature without our approval, avoiding the appropriate scrutiny intended to protect consumers,” said commission chairman Brad Johnson, R-East Helena.

Johnson said Liberty’s actions represented a direct attack on the PSC authority to review and regulate utility transfers. He said the company’s actions stand to hurt the ratepayers – those being the citizens of Missoula.

John Kappes, president of Mountain Water, said the PSC’s decisions made “no sense under Montana law.”

“Mountain Water has purchased other water systems in the past without PSC review, and without sanctions,” he said. “This decision is not consistent with the law, and it’s not consistent with the past.”