July 8, 2001

Montana may be next up for massive power shortages

By Faith Bremner Associated Press

WASHINGTON - Montana may soon have a lot in common with California if state regulators fail to put the brakes on electricity deregulation.

Problems similar to those in California's electricity crisis have already hit Montana since it began deregulating its electric utilities in 1997, says Assistant Attorney General Candace West. Electricity producers are reaping big profits, the result of large industrial users who ventured into the open market seeking lower prices ending up paying high prices.

"It's safe to say the effects of electricity deregulation on industrial users has been nothing short of catastrophic," West said. "We've had businesses close down as a result of it, laying off hundreds of workers."

And, deregulation could be the No. 1 issue in next year's congressional and state political races.

The price Florida consumers pay for electricity is government regulated. The state's Public Service Commission monitors the rates because power companies that operate in Florida do so without competition.

For example, Florida Power & Light has the only contract to provide energy in Brevard County.

"We think the system we have in place now works well for the citizens of Florida," said FPL spokeswoman Pat Davis.

Last month, the Montana Public Service Commission moved to protect residential and small commercial users from rate spikes.

The commission was responding to fallout from the state's deregulation law, which last year resulted in Montana Power Co., selling its power plants to Pennsylvania-based PPL Montana. Now, PPL wants to raise the rates of Montana Power, the state's biggest utility, when a supply contract is renewed in July 2002.

Under the state's deregulation law, the PSC still regulates what Montana Power Co. charges residents and small commercial users. Those consumers cannot buy their power on the open market until state officials decide there's sufficient competition.

At issue is whether the PSC has authority to regulate PPL Montana. On June 26, PSC commissioners voted 4-0 that it does. Company officials disagreed, saying the PSC is violating federal law and threatened to sue.

http://www.floridatoday.com/news/local/stories/2001/jul/loc070801h.htm

-- Martin Thompson (mthom1927@aol.com), July 08, 2001