PSC looks at Havre Pipeline complaints

After years of complaints from customers about declining quality of service by those who depend on Havre Pipeline Co. LLC's natural gas, three members of the Montana Public Service Commision held a public hearing Monday in Henseler Auditorium at Montana State University-Northern.

Travis Kavulla, R-Great Falls, who represents most of North Central Montana on the five-member state regulatory commision and whose district the pipeline runs through, chaired the meeting. Kavulla was joined by fellow commissioners Kirk Bushman, R-Billings, and Bob Lake, R-Hamilton.

Also present were staff members and attorneys for the commission, NorthWestern Energy, which owns majority share of Havre Pipeline Co. and the Montana Consumer Counsel, who represent the aggrieved customers.

During the meeting, public comment and testimony were allowed, but neither were given.

"I think the legal question revolves around whether or not Havre Pipeline services are those of a public utility, and if so, what their

obligations are relative to their customers," said Kavulla.

At stake is access to natural gas for nearly 100 customers in Blaine, Chouteau and Hill counties as a source of heat for their

homes and businesses. When the pipeline was being built in the late 1970s and early '80s, in exchange for right-of-way easement, property owners affected could tap into the pipeline and buy natural gas at a set rate.

Eventually, Devon Energies, an Oklahoma-based

energy company bought most of the company share. In 2013, NorthWestern Energy bought Devon's 82 percent interest in Havre Pipeline along with about 90 natural gas wells in the Bear Paw Basin. This move was part of a

strategy to become a more vertically integrated company, where NorthWestern would have the means as well as the facilities to produce and deliver natural gas to customers.

Since NorthWestern Energy took majority ownership of Havre Pipeline, many of these farm tap customers allege the company provided them with substandard service. Property owners, for example, have had to deal with so-called freeze-ups, where water accumulates in pipes and freezes due to decreased pressure.

Already, some 40 customers have become so dissatisfied that they switched to an alternate source of energy at their own expense.

Havre Pipeline has abandoned some of its gas wells, thereby leaving some customers in remote areas without access to the gas.

Under state regulations, when a public utility is no longer able or willing to provide service, it must do one of two things: make the upgrades needed to provide service or help cover the cost for the affected customers to switch to an alternate form of energy.

NorthWestern Energy, as Havre Pipeline's majority stakeholder, denied it is or ever was a public utility and therefore does not have to meet the obligations of a public distribution utility.

"Havre Pipeline has never professed to provide gas distribution or utility services in Montana," said Richard Alke, a corporate counsel for NorthWestern Energy.

Alke said that in order for it to be considered to be a distribution service, the gas being provided to the farm tap customers would have had to go through a number of processes along a distribution lane, before it was pumped to them.

"The facilities talked about here, have never provided that function," he said. Rather the lines merely transported that gas and through agreements, customers would have access to it.

Therefore, he argued, the service commision does not have the legal authority to require Havre Pipeline to build a facility that would cost large sums of money to supply a small number of farm tap customers with gas.

Public Service Commission's spokesperson Eric Sell said the commission hopes to reach a decision on the matter sometime in December and January.