Molnar should participate in merger decision, group argues
Keila Szpaller
(Daily Montanan) If Brad Molnar is suspended as a Montana Public Service Commissioner, a decision in a $15.4 billion utility merger could be legally invalid, argued a group participating in the case.
The merger proposal is “one of the most consequential regulatory proceedings before the commission in a generation,” said the parties, made up of 350 Montana and the Montana Farmers Union.
The parties made their argument in a filing in Lewis and Clark District Court, where Molnar is fighting a one-year suspension from office by Gov. Greg Gianforte.
The suspension came at the request of the Public Service Commission following an investigation into allegations of professional misconduct by Molnar.
The commission voted 3-2 to ask for Molnar’s suspension, with Molnar and Commissioner Randy Pinocci opposing the request.
Molnar and Gianforte both have described the suspension as unprecedented, but Gianforte has said unprecedented actions by Molnar led to the decision.
Represented by lawyer Monica Tranel, the parties raising the issue of the proposed merger in district court said they do not take a position on the merits of suspension.
However, the parties said the judge should be advised of the context in which the suspension arises and its potential consequences for Montanans: It is taking place in the face of a multibillion dollar utility merger proposed between monopoly utility NorthWestern Energy and Black Hills Corp.
The merger proceeding is pending before the Montana Public Service Commission. The parties assert that if the PSC makes a decision on the merger without Molnar, but the court finds his suspension invalid, the decision would be vulnerable.
“A merger approval, once issued and acted upon, cannot easily be unwound,” the parties told the judge. “The regulatory harm to ratepayers from a procedurally defective merger approval is permanent in a way that no subsequent order can fully remedy.”
The parties are asking the court to evaluate the suspension in light of the merger decision.
They said that allowing Molnar to continue isn’t about his personal interest, it’s about ensuring that the commissioners who heard the arguments are the ones who make the decision — in fairness to parties that participated in the case and to ratepayers.
South Dakota regulators approved the merger in June, and Nebraska signed off in April.
The South Dakota Searchlight said Montana is the only state where regulators have not yet signed off on the proposal.
NorthWestern Energy spokesperson Jo Dee Black said the company will engage in the regulatory process “as appropriate,” but state law and the PSC have procedures for dealing with decisions where a commissioner did not attend a hearing.
“As an elected body, the Montana Public Service Commission’s membership changes over time through the electoral process, and Montana’s regulatory framework is designed to provide continuity as elected commissioners change,” Black said.
The merger would create a “multistate conglomerate covering 20% of the landmass of the United States,” the parties said in a court filing.
It would shift control of NorthWestern to “an eight-state holding company, where decisions are made without regard to the needs of Montanans,” they said.
In May, the Public Service Commission conducted a hearing on the proposal, and all five commissioners were present, the parties said in the court filing.
“Commissioner Molnar participated actively in that hearing,” the filing says. “His questions generated testimony that is part of the evidentiary record on which the Commission must base its final decision.”
Molnar is the longest serving commissioner, most recently re-elected to the PSC in 2024, and he was on the Public Service Commission when it rejected another purchase of NorthWestern Energy, the parties said.
In the hearing, Molnar asked about the recourse Montanans have if the merger goes wrong and about impacts to ratepayers, they said. He observed witness demeanor, which a substitute commissioner will not have done.
“That experience and the questions raised and answers given by utility witnesses who stand to gain tens of millions of dollars from this transaction are critical to a fair outcome,” the group argued.
The parties also asked the Public Service Commission to pause proceedings until Molnar’s status is settled.
“The five elected commissioners who heard the evidentiary record are the only decision makers who can lawfully render a final decision on this merger,” the parties said in the court filing.
In an email, a PSC spokesperson said the commission still has four active commissioners who participated in the hearing, and the counts against Molnar are serious, including sexual harassment and retaliation.
“The four remaining (commissioners) will continue to faithfully execute their duties during the governor’s ordered one-year suspension of Commissioner Molnar for multiple charges of unlawful conduct against staff (of the PSC) and members of the Public Service Commission,” the spokesperson said.