By Greg Jergeson
Last week, the House and Senate approved several bills related to the electricity deregulation issues that have confronted us all session. The purpose of this flurry of legislative activity was to get a broad menu of options before a joint conference committee to arrive at a final package. Several of the bills that passed were duplicative of one another. Several of the bills were contradictory to one another. Legislators understand that only a limited number of these approaches will survive the final hours of this legislative session. It is apparent that three major thrusts will be involved in the final package.
The first approach will be to engage in re-regulation of the electrical industry. Rep. Doug Mood, R-Seeley Lake, introduced HB 632 which would authorize the Public Service Commissioner to regulate electricity producers beyond the June 30, 2002 deadline by which deregulation was supposed to apply to residential and small business consumers. There is an interesting note to this bill. When Senate Democrats attempted to amend the bill to clearly label it as a re-regulation bill, the Senate Republicans refused to go along with that notion. HB 632 passed the Senate by nearly unanimously. Everyone expects that this bill will be challenged in court by PPL for its "takings" issues.
The second approach will use taxes as a means of resolving the issue. Several bills passed that include an "excess profits" tax to be applied to the electrical generation companies if their profits exceed "fair and reasonable" beyond cost of production. The idea is that those excess profits taxes would serve as a disincentive for the companies to charge rates that are too high. The plan also includes returning any revenues derived from those taxes to the ratepayers.
The third approach is contained in a number of bills designed to foster additional generation of electrical power in Montana. The theory behind these bills would be to increase supply so that price would moderate. I don't believe that additional supply in the hands of private utilities that have taken advantage of the deregulation bonanza will be a solution to electricity prices. Among the supply increase bills, there are a couple that would enable our cooperatives to increase electrical generation capacity in Montana. I do support those.