Crowds question Devon-NorthWestern deal
October 7, 2013
A crowd of more than 100 people expressed concern and outright opposition Friday to the proposed sale of Devon Energy’s natural gas operations in Blaine, Hill and Chouteau counties.
The hearing was sponsored by the Montana Public Service Commission. Commissioner Travis Kavulla, R-Great Falls, who represents the Hi-Line, said there has never been such a large a turnout at these hearings.
“Sometimes literally, only the PSC staff shows up,” he said.
Neighbors, ranchers with leases, employees and political leaders were among those with questions for NorthWestern representatives.
Among the concerns:
• Would NorthWestern, the Butte-based company that supplies power to most of Montana and parts of South Dakota and Nebraska, hire the displaced Devon employees?
• Would royalty payments to landowners remain the same?
• What would the be the the effect on property taxes? Would other property owners have to pay more because NorthWestern will pay less?
• Will NorthWestern be the “new Montana Power Co.,” a vertical monopoly that controls gas from the well to the customer’s home?
• Will NorthWestern be the “good citizen” that Devon has been? Devon was praised for the work it has done in the community.
“Devon has been a good partner for this community,” said Hill County Commissioner Mark Peterson, who was skeptical of the sale.
“It’s disturbing to me that we are going to lose some employees in this community,” he said.
Al Brogan, NorthWestern corporate counsel, said he tried to answer as many questions as possible, but it was impossible to answer questions about employment until the PSC approves the sale.
The commission has the authority to block the sale of Havre Pipeline Co. to North-Western, a key part of the deal.
“I would hope that we would become the old Montana Power Co.,” he said, the one that provided energy to customers, solid employment to workers and profits to its owners.
By owning some wells, he said, customers would be protected from fluctuating prices.
Several people asked questions about Northwestern’s bankruptcy a decade ago.
Brogan said the company is solid today, and the utility division was always strong, the bankruptcy was caused because the company ventured off into other fields, which it has promised not to do again.
“I am biased,” he said. “I am a NorthWestern employee, and I think we are a very good citizen.”
He said the company makes many financial contributions to community organizations.
Kavulla said he was pleased with some answers from NorthWestern, but not entirely.
“I think we need some more answers,” he said during a recess in the hearing, a sentiment shared by State Sen. Greg Jergeson, D-Havre, Kavulla’s predecessor on the commission.
He said he was especially concerned about the future of Devon’s employees.
Noting that the production facilities have been sold several times over the year, Kavulla said “the employees have been on this merry-go-round before.”
What comes next?
• The Montana Public Service Commission will decide if NorthWestern can purchase Havre Pipeline Co., an essential part of NorthWestern’s $70.2 million deal to acquire Devon Energy’s natural gas facilities on the Hi-Line. The NorthWestern-Devon deal calls for a decision by the end of October, but the PSC has given no assurances.
• The PSC has to decide if NorthWestern can fold its operating costs at the Hi-Line natural gas facilities into its rate structure. Commissioner Travis Kavulla said that is likely to happen by the end of the year.
• PSC meetings are live-streamed at http://psc.mo.gov/. Kavulla said notice would be given before the Devon-NorthWestern deal is discussed.