NorthWestern dam purchase reviewed

Local residents in April have a chance to comment on a proposed purchase that could affect energy prices, in the short term and in the long term, for many Montanans: NorthWestern Energy’s $900 million purchase of 11 dams from PPL.

“These meetings are an important opportunity for the public to learn, ask questions and voice opinions about a transaction that could affect the energy landscape in Montana for decades to come,” Great Falls Republican Public Service Commissioner Travis Kavulla, who represents this region on the PSC, said in a press release announcing the meetings.

The purchase is subject to the approval of the PSC.

Kavulla has scheduled hearings in April in Havre, Glasgow and Shelby to collect comments on the proposed deal.

The meetings will feature presentations by NorthWestern and the Montana Consumer Counsel, which represents ratepayers before the PSC, with opportunities for questions and public comment, Kavulla’s release said.

In his release, Kavulla said information from NorthWestern shows that customer rates in January 2015 would be 8.9 percent higher than expected if the purchase is not made.

NorthWestern is proposing its customers pay for the purchase in their electrical bills over 40 years, along with annual maintenance and operations requirements and any other necessary expenses to keep the hydroelectric generating facilities operating.

NorthWestern spokesperson Claudia Rapkoch said this morning that the anticipated rate increase depends on to what rates the new rates are compared.

Kavulla’s 8.9 percent is comparing the expected rates to what the rates are expected to be in 2015 if the purchase does not occur, she said. NorthWestern is comparing the rates after the purchase to what they are today, which would be a 4.22 percent increase, she said.

Rapkoch said those rates include contracts starting this year which would expire in 2017. NorthWestern cannot anticipate what buying the electricity on the market would cost in the following years.

NorthWestern Energy CEO and President Bob Rowe has said buying the dams — built to provide energy for Montana Power Co.’s customers — will provide more stability in long-term electricity prices.

The deal would bring NorthWestern Energy one step closer to what the company from which it bought its transmission lines once was.

Montana Power Co. sold the dams and its power plants to PPL once the state government approved in 1997 deregulating energy in Montana, a plan proposed by Montana Power itself.

Montana Power sold its power generation facilities — including the dams it is now trying to buy back — and sold its transmission facilities to South Dakota-based NorthWestern Energy.

Montana Power then transformed itself into the fiber-optic telecommunications company Touch America — and shortly thereafter went bankrupt and out of business when the telecommunications bubble burst early last decade.

NorthWestern Energy soon followed suit on the bankruptcy in the midst of spiking energy prices.

Both companies filed for bankruptcy in 2003. NorthWestern Energy reorganized and emerged from bankruptcy the next year.

Since Rowe — a former Democratic commissioner and chair of the Montana Public Service Commission — has taken over as head of NorthWestern Energy in 2008, he has pushed for the company to own its own energy production facilities.

Along with the proposed dam purchases, NorthWestern also has bought natural gas wells and pipelines in north-central Montana.

Late last year, the company completed a $70.2 million purchase of natural gas wells and pipelines from Devon Energy, along with Devon's 82 percent interest in the Havre Pipeline Co.

The hearings on the dam purchase start in Havre at 5 p.m. Wednesday, April 9, in the Montana State University-Northern Student Union Building Ballroom.

The Glasgow meeting is. Thursday, April 10, at the Cottonwood Inn and Suites, and the Shelby meeting is Wednesday, April 23, at the Comfort Inn. Both of those meetings also are scheduled to start at 5 p.m.

People with questions were invited to contact Kavulla at [email protected] or 406-444-6166. The PSC is also accepting written comments at: Montana PSC, PO Box 202601, Helena, MT 59620-2601