HELENA — A bill touted as salvation for the Colstrip power plant continues to evolve. It’s now to the point that some lawmakers and lobbyists say they’re no longer certain what the proposed legislation actually does.
Senate Bill 331 was initially drafted to grant NorthWestern Energy permission to buy a larger share of the coal-fired plant from an unknown seller without regulatory oversight from the Public Service Commission.
By the time SB 331 reached the House Energy and Technology Committee last week, it limited NorthWestern’s acquisition to 150 megawatts and restricted the PSC’s authority over that new acquisition. It also guaranteed the utility would get to pass $75 million in capital costs along to ratepayers without PSC approval.
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By the time the House committee approved SB 331 in a 7-5 vote Friday evening, it had two additional amendments.
The version now moving to the House floor restores at least some, and possibly all, of the PSC’s regulatory oversight. It replaces language “requiring” the PSC to include investment returns with “allowing.” Where the bill once said decommissioning and remediation costs for the new 150 megawatts “must” be included in rates, the amended version now says such costs “may” be included. The PSC also “may” include incurred costs from the new 150 megawatts, instead of “shall.”
The amendment also removes NorthWestern’s guaranteed ratepayer-financed return of $75 million over 10 years.
A second approved amendment requires the PSC to evaluate the current market value of NorthWestern’s share of the Colstrip plant and to revise electricity rates based on those findings. The committee voted in favor of the amendment 7-5.
Rep. Denise Hayman, D-Bozeman, tried to add another amendment to the bill to address the 500 kilovolt transmission line connecting Colstrip to markets on the West Coast. SB 331 allows “prudent investment” by NorthWestern in the transmission line, “not to exceed book value.”
Nothing in the bill specifies how much of the line NorthWestern could acquire or how much the utility could spend.
Related SB 331 coverage:
Hayman attempted to limit any new acquisition of the transmission line to the capacity needed to transmit an extra 150 megawatts. Her amendment failed in a tie vote.
In its current iteration, it’s not entirely clear what SB 331 does other than maintain the status quo. NorthWestern is already free to buy more generation at the Colstrip plant and more transmission. The PSC already determines whether the monopoly utility is allowed to pass costs on to captive ratepayers.
“Why do we have this bill in front of us if [NorthWestern] can do this currently?” Hayman said. “Why are we hearing this bill? I have no idea.”
The committee approved SB 331 along party lines with seven Republicans voting for the amended measure and five Democrats opposing it.
‘Nothing adds up’
Hayman said she worries the proposal isn’t really about “saving” Colstrip or securing additional energy for Montana electricity customers. She said it’s becoming apparent the bill is about NorthWestern gaining more control over the 500-kilovolt transmission line.
“We do know [the transmission line] is very, very valuable, so to have this bill that was brought to us to say that the important issue was the 150 megawatts of coal [generation] is not true,” Hayman said in an interview. “What they really want is the transmission line, and they want increased access to it. That’s a very different bill and a very different discussion.”
Why NorthWestern is asking the Montana Legislature to help the company secure more access to the transmission line also isn’t clear. Joint owners of the line — including NorthWestern, Puget Sound Energy, Avista Corporation, Portland General Electric, and PacifiCorp — currently operate under a transmission agreement.
That agreement requires any entity seeking to terminate its share of the line to offer that share for sale to the other joint owners first. The federal government regulates those contracts, not the state of Montana, according to Travis Kavulla, a former PSC commissioner and current energy policy analyst.
“This is simply not the type of agreement that changes on a lark,” Kavulla said. “This is a contractual agreement subject to federal regulation. It frankly would not matter what Montana has to say about it.”
Sponsors and supporters of SB 331 previously said curbing the PSC’s authority to approve NorthWestern’s investment at Colstrip was necessary to avoid lawsuits from environmental group such as the Sierra Club and Montana Environmental Information Center. Supporters of the legislation said such lawsuits could could drag out the process.
MEIC lead lobbyist Anne Hedges said ambiguities created by the recent revisions will likely cause other legal entanglements.
“You can’t tell me that any single one of those people could read that bill now and tell me what it says,” Hedges said of the House committee members. “It’s going to lead to fights and legal fights before the Public Service Commission, between NorthWestern and the Consumer Counsel, for decades over what that language means. It’s a mess.”
Other lobbyists speculate more changes are coming down the pike.
“Nothing about this bill adds up to me. It is bizarre,” said Jeff Fox, policy manager for Renewable Northwest, following Friday’s committee vote. “All I know about this is it’s all about getting it to an eventual conference committee.”
Lawmakers could form a conference committee with representation from both the House and Senate to hash out new amendments to HB 331, or amendments to amendments. Those changes would be subject to approval in both chambers.
With only two weeks left in the 2019 session, that leaves legislators with little time. Fox said he doubts SB 331 will earn NorthWestern’s approval — or the approval of key senators — in its current state.
“I don’t believe this bill will pass without NorthWestern’s support,” Fox said.