By Ron VandenBoom
U.S. Sen. Max Baucus blames energy problems in the Western states on a huge increase in demand and a lack of production.
Baucus said growth in the use of computers, among other things, is responsible for a huge increase in demand for electricity in California, which he described as "the big enchilada" among Western states.
"While demand was increasing so much," he said, "there was not a lot of cheap production."
Baucus made his remarks during an interview Friday in Havre. He was in north-central Montana to gather public comment about a new farm bill.
The Montana Democrat said greater demand and too little production came together at a time when the California Legislature had just deregulated the wholesale electricity market. That allowed out-of-state producers to charge California power companies sky-high prices for much-needed power.
The retail market in California was not deregulated, which meant California power companies could not pass the higher costs they were paying for electricity on to California consumers.
Baucus said the problem in Montana stems in part from Montana's ability to produce more energy then it uses and power producers being entitled to get the best price they can.
"The best price is often outside of the state," he said.
Baucus did not blame higher energy prices in Montana on the Legislature's choice to deregulate in 1999. In fact, Baucus said deregulation in Montana at the time seemed like the right thing to do.
"But deregulation in California put a huge premium on the purchase of wholesale power," he said. "That just pushed prices up all over the West."
Baucus said it's his belief that you just take conditions as they are and move forward.
"We can't go back and undo a lot of decisions that were made earlier most of them again in California," he said.
A bipartisan approach by Congress to encourage more production while encouraging conservation is what Baucus said he believes is necessary to solve Montana's energy problems.
While Montanans could see energy prices rising after July 1, 2002, they should be finding more money in their pockets from the recent $1.3 trillion tax-cut package passed by Congress. Baucus said $115 million in rebates will be coming to Montana taxpayers.
"We designed it in a way so that rebates would go to every income-tax payer who paid income taxes," he said. "I thought it was better just to give the money back and to change the withholding tables because it's a lot easier, it's a lot less expensive ... for everybody."
Baucus said 90 million people will be receiving some kind of refund.
Reports that newly released employer tax tables show no reduction in tax withholding for employees making less that $58,000 a year came as news to Baucus.
"I'll have to check that out," he said.
Baucus said he was instrumental in lowering tax rates from 15 percent to 10 percent for lower-income groups. His efforts, he said, will also provide increased benefits to 34,000 more Montanans who are in low- or moderate-income families by allowing them to claim a portion of the child tax credit, even if they have no tax liability.
Baucus would not say whether he is looking forward to a campaign against his recently announced Republican opponent, state Sen. Mike Taylor.
"I love my job," he said. "It's an honor and a privilege to represent our people. I'm one of the luckiest guys in the world to have the privilege to represent the people of Montana in the United States Senate."
