By Ron VandenBoom
John Magyar, general manager of Triangle Telephone Cooperative Inc., Hill County Electric Cooperative Inc., and Central Montana Communications, predicted the year 2002 is going to be an "ugly time" for consumers.
Magyar made the comment while speaking before the North Central Montana Pachyderm Club on Friday.
"Absolutely, there's going to be a rate increase," Magyar said in reference to electric rates in the year 2002.
Magyar explained that when Montana Power sold off its electrical generating facilities to Pacific Power and Lights, an agreement was signed between the two companies to guarantee the resale of electricity at the rate of 2.2 cents per kilowatt hour wholesale.
Currently, the market price of electricity is anywhere from 4.5 cents per kilowatt hour to more than $1.30, he said.
"So you're talking about a market price that is just swinging all over the place," he said.
Magyar noted that whoever owns Montana Power when the agreement expires is going to have to go out in the market place and buy power.
"Well, they ain't going to get it for 2.2 cents per kilowatt hour," he said.
Magyar's prediction is that the price will be double what it currently is, at a minimum.
Because of deregulation, the consumer is going to be free to choose between competing suppliers of electricity. The problem is that there are no competing suppliers at this time.
"The problem is that there is only one other supplier that has said they are going to offer service to consumers," Magyar said.
That one supplier is Energy West, formerly Great Falls Gas, of Great Falls, he said.
He noted that Marias River Electric Cooperative has been looking into it and added that "it doesn't look like they will be very successful."
"There's not a whole lot of options out there," he said.
Magyar to the Pachyderms the state is also having a difficult time trying to determine who's going to be the default supplier for consumers who do not choose a supplier.
Asked whether consumers would be plagued by power companies calling and asking customers to switch suppliers, much like competing telephone services do, Magyar said he doesn't see a time when that will happen.
"I think the opposite will be the case," he told the crowd. "You'll be wishing that you'd get more calls. There's just not going to be anybody out there."
Magyar was far more optimistic about the telephone service of Triangle Telephone.
The use of fiber optics, the development of "Vision Net," and wireless communications are all part of what is pushing Montana to the good side of what Magyar called "the digital divide."
Magyar said he expects to see testing of new "broad band" Internet equipment that Triangle is adding this fall or winter in probably Chinook, Big Sandy, Chester, and Big Timber.
Once the tests are complete, Magyar expects to see high speed Internet access become available in many small towns and rural areas by next year.
"We are in the process of purchasing the equipment," he said.
Magyar said that because U.S. West currently controls most of the telephone service in Montana's larger cities, it is very likely that broad band service will arrive in rural areas before it comes to communities like Havre.
Consumers of high-speed connections may also find additional expense in acquiring broad band service the new modems can cost $200 to $500, he said. "And the Federal Communications Commission has not defined what the protocol is going to be."
That means that it is possible to purchase a modem that may not work after the protocol is established. "It's not going to go without bumps," he said.
