Opinion: Risky business for NorthWestern Energy customers
Republican Senator Steve Fitzpatrick of Great Falls is the sponsor of three bills which would greatly increase the utility costs of NorthWestern Energy’s customers. The three bills are SB 265, SB 266 and SB 379. Fitzpatrick is also the son of the former NorthWestern Director of Government Affairs.
Fitzpatrick’s SB 265 would reach into a private, 40-year-old business contract and demand that arbitration between NorthWestern and its current Colstrip partners be moved from Washington to Montana. This “negotiation through legislation” tactic by NorthWestern would change the contract to give one party, NorthWestern, a more favorable outcome.
SB 266 attempts to force Colstrip to stay open until 2042, regardless of the private contract or the out-of-state owner’s decisions and legal obligations to manage the plant.
Most shockingly, SB 379 would require NorthWestern ratepayers to pay for electricity and the purchase of additional shares of Colstrip at an inflated price even if cheaper energy sources are available. We, the customers, would take on all the risks of fuel costs, reclamation, repairs, replacement power when the plant inevitably breaks down, plus a guaranteed profit for NorthWestern. Fitzpatrick said this bill was “drafted primarily by NorthWestern.” NorthWestern Energy isn’t even trying to hide its self-dealing motivations to satisfy its shareholders at the expense of its customers.
Importantly, last week, the all-Republican Public Service Commission, charged with seeing that the rates set by NorthWestern are fair to both NorthWestern and the ratepayers, voted unanimously to oppose SB 379. Commissioner Tony O’Donnell of Billings said “it looks like it is entirely a wish list for NorthWestern” and “that it’s a complete abrogation of responsibility for NorthWestern shareholders and the transfer of all liabilities to the ratepayers.”
As reported in The Montana Free Press, “The PSC staff’s analysis of the bill found that if Unit 4 of Colstrip were to shut down in 2027 as has been forecasted, NorthWestern would be permitted to recover $267 million in undepreciated value and remediation costs from its customer for its existing share of the plant, to say nothing of the $l.8 billion for a larger share of the plant.
Reportedly, NorthWestern’s David Hoffman acknowledged that Colstrip won’t be around forever, and he sees SB 379 as providing “a glide path out of Colstrip.” Furthermore, he said, “The bottom line is, without this bill it’s very unlikely that NorthWestern would expand its interest in Colstrip, because it’s not a very good business model to incur that kind of risk without any rate of return or recovery of cost.”
PSC policy analyst Robin Arnold summed it up, “This shifts all of the risk to the utility’s customer, while guaranteeing that the utility’s stakeholders will receive the reward.” And we ask, who would suffer most? The low-income and elderly. These bills are anti-customer and definitely anti-Montanan.