The Senate Natural Resources Committee voted Friday to revive part of a controversial bill that sought to guarantee regulated utility monopolies like NorthWestern Energy a rate of return on new coal-fired power by weakening the Public Service Commission’s oversight.
On Wednesday, the House Energy Committee voted to table Senate Bill 379, but a key provision of the bill was resurrected two days later when the committee added it to another bill on water utility disputes.
The revived provision would allow a utility to recover from ratepayers any replacement energy costs related to power outages or noncompliance with environmental standards without first garnering approval from the PSC. Democratic lawmakers on the committee said the amendment’s introduction runs afoul of legislative rules since SB 379 had been “finally rejected” in the House when the Energy Committee tabled it. They also said the amendment shares little in common with the measure it’s been appended to, House Bill 695, potentially violating the Montana Constitution’s “single subject” rule on bills.
Committee Chair Jeff Wellborn, R-Dillon, decided to allow the amendment, and the other six Republicans on the committee joined him in voting for it. Democrats unanimously opposed it.
Sen. Duane Ankney, R-Colstrip, requested the amendment. He said regulated utilities are subject to losses due to circumstances caused by no fault of their own. Such situations include power outages and the imposition of environmental regulations, he said.
Democratic lawmakers argued that removing the PSC’s oversight of cost recoveries could lead to abuse by regulated monopolies at their customers’ expense.
Sen. JP Pomnichowski, D-Bozeman, pointed out that the PSC has prevented utilities from receiving cost recoveries for imprudent behavior twice in recent years, saving ratepayers $14 million. She also noted that the amendment doesn’t limit the length of time the utility could impose replacement power costs on ratepayers.
“That cost could go to ratepayers for years,” she said.
“This bill is clearly not in the best interest of the ratepayers, clearly not in the best interest of customers. It’s clearly in the best interest of one company that makes a lot of money,” said Sen. Pat Flowers, D-Bozeman. “We’re putting more money in their pockets and taking it out of ratepayers’.”
Ankney argued against the idea that a utility company would take a cavalier attitude toward the condition and maintenance of its infrastructure, saying it has “skin in the game” to keep things running well.
“To even insinuate that they just let it go to cause maintenance problems or air quality problems to recoup their replacement power costs and put their rate of return on top of that — that just don’t float,” he said.
The amendment also included a provision pertaining to nuclear energy that bars the state from denying a nuclear energy power plant on the grounds that the federal government has not created a permanent repository for nuclear waste. Like coal, nuclear energy has been a theme in the 67th Legislature’s conversations about energy, with nuclear waste storage being a key talking point.
The amended version of HB 695 passed out of committee 7-5 on a party-line vote. It will go before the full Senate for second reading, likely next week.
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