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Mont. electric utility deregulation bill gets state House energy panel airing from SNL Power Daily with Market Report Mont. electric utility deregulation bill gets state House energy panel airing BYLINE: Jeff Stanfield SECTION: Extra A bill that would once again open Montana to retail electric competition was slated for a House energy committee hearing Feb. 15, but faces stiff opposition from NorthWestern Corp., which runs the state's dominant power utility. House Bill 438, sponsored by Rep. Tom Woods, a Democrat in a Republican-controlled legislature, would open customers of NorthWestern's local utility, which operates at NorthWestern Energy, and MDU Resources Group Inc. subsidiary Montana-Dakota Utilities Co. to retail competition. NorthWestern has more than 369,000 electric customers across most of the state and Montana-Dakota Utilities has about 26,000 electric customers along most of Montana's eastern border. Electricity deregulation brings back memories of the state's disastrous experiment in 1997, when the Montana Legislature last deregulated the state's electric industry. The cost of electricity soared in the early 2000s, with rising demand and lack of new supply. In 2003 NorthWestern Corp. and its utility division filed for Chapter 11 bankruptcy protection and reorganization. The Legislature subsequently abandoned deregulation and put the utilities back in the business of providing energy supplies to their customers. NorthWestern's Montana government affairs director, David Hoffman, said by email, "Our customers and our employees are at the center of why we strongly oppose H.B. 438. Deregulation is still top of mind for many Montanans because they were deeply impacted by it." Nevertheless, Woods and other proponents of the bill argue that Montana's electric rates are too high and utility-owned generating resources undermine the market and lead to increased customer costs. The bill states that Montana consumers should have the freedom to choose their supplier of electricity and related services in a competitive market as soon as administratively feasible. The House Energy, Technology and Federal Relations Committee scheduled a hearing to consider several bills, including Woods', late Feb. 15. The bill would require the utilities to divest their generation assets and remove them from their rate bases, though the state Public Service Commission would be required to allow recovery of transition costs from ratepayers that utilities could not otherwise get compensation for in selling assets and retiring power purchase contracts. In 2014, NorthWestern bought $900 million in hydro generating assets through the acquisition of several plants that its predecessor, Montana Power Co., had owned prior to the 1990s deregulation effort. Ratepayers are paying for the repurchase by supporting the utility's decadeslong financing. The measure provides that by July 1, 2020, customers with loads greater than 1,000 kW must have the opportunity to choose an electric supplier other than their utility and by July 1, 2024, all utility customers must have that choice. |
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