By Ron VandenBoom
The Judy Martz administration received several warning shots across her administration's bow Friday from fellow Republicans when Shane Hedges, a policy advisor for the governor, addressed the North Central Montana Pachyderm Club.
Hedges, who was also Martz's campaign manager during the last election, touted the Martz administration's record on energy and education issues, while receiving warnings that her message is not getting out to the people.
Dennis Morgan, a Havre business owner who described himself as a life-long Republican, told Hedges the Martz administration appears to be "a ship without a rudder."
"You've got a real problem here," Morgan said, referring to Martz's handling of the energy issue. "She could make a strong statement by refusing to sign HB-474."
HB-474, sponsored by Paul Sliter, R. Somers, was the Martz administration's solution to the energy issue. It was approved by the Republican-controlled Legislature during the final 34 hours of the legislative session. The bill met with strong opposition from Democrats who have described it as a deal written by the power companies during back-room meetings with the governor. They also claim that not enough time was given the legislators to review the bill before they were forced to vote.
Hedges responded to Morgan's comment by saying Martz would also be making a statement if she didn't sign HB-474. That statement being, that she is unwilling to find a solution to Montana's energy problems.
Hedges said the Martz administration is really proud of what they did to get out of the energy crisis and noted that the administration only had two fundamental choices go back to a regulated market and tax the power companies supplying MPC, or to provide incentives for competition that will make the deregulated market work.
"There are some key things in HB-474 that can help us get out of the problem," Hedges said.
Morgan told Hedges that nothing he could say would change his mind about Martz's handling of the energy issue.
Republicans have predicted the bill will mean a 50 percent increase in utility rates after the currant rate freeze ends on July 1, 2002. It also allows for full cost recovery of power purchased on the open market.
Hedges said the bill's critics are saying, "because you are allowing them to recover their full cost, it's a power company bill."
"Well, that's not right," Hedges said. "We've made it a consumer protection bill."
Hedges went on to describe how PP&E in California had to buy power at a high rate and was forced by government to sell it at a low rate. The result, he said, was the bankruptcy of PP&E.
"If we were to do that to Montana Power," Hedges said, "it would take less then three weeks for them to go bankrupt."
He added that Montana, unlike California, would not be able to bail out Montana Power.
"We would be putting Montana into a real mess if they (MPC) were not allowed full cost recovery," Hedges said.
Other aspects of the bill create a power authority to help spur competition in the market place and establishes a $500 million bonding authority to help get generation facilities up and running.
The bill, Hedges said, would also extended the power company's energy assistance program to help poorer households pay their utility bills.
Answering criticisms that the HB-474 eliminates what remains of the PSC's power to regulate the utilities, Hedges said that the administration was very careful in the wording of the bill to "make absolutely certain ... that it didn't take away any authority from the PSC and in some cases, increases the power of the PSC."
Hedges agreed with criticisms from the Pachyderms that the power companies are not doing enough to help solve the problem. "There's no question in my mind that these companies could do more than they are currently doing. And Judy asked them to do more," he said.
Hedges was told Martz needs also to do more to get the Republican message on energy and education out to the people. He was told that Martz has appeared to be "amazingly silent" on the issues during the legislative session.
In defense of the Martz education plan, Hedges was strongly defensive noting that $1.2 billion of the state's budget is spent on education with the legislature this year granting a $31 million increase, or 1.88 percent, to K-12 education, for each year of the biennium, and a $20 million increase for higher education.
"That's a lot of money when you're talking about real dollars to the people of Montana who are 47th in the nation in per-capita income," Hedges said.
He went on to say that Montana spends more on K-12 education than 45 other states and Montana ranks 19th in the nation for higher education spending.
Hedges was told that Havre experienced a 4 percent decline in student enrollment and suffered a 3 percent inflation rate and that a 1.88 percent increase in K-12 funding translates into a funding cut for local schools, not an increase.
Hedges responded that Montana consistently funds education more every year, despite the fact that enrollments are declining. He singled out a $54 million increase two years ago and another $31 million increase during the legislative session before that.
"Why is that?" he asked. "Why is it that we are educating 6,000 fewer students today then we were in 1995 and yet we have 400 more teachers? Enrollments are declining and costs are skyrocketing? Somebody's got to be accountable when the money leaves Helena."
Hedges said Martz is committed to looking at the ANB funding mechanism that ties student enrollment to the amount of money schools receive and added that Republicans are making education a priority.