New deregulation law sparks conflict

Montana State Roundup

Published September 1, 2001  | September 2001 issue

Legislation put into effect July 1 promises to affect the course of electricity deregulation in Montana. Under the new law, Montana Power Co. (MPC) will recover all costs of electricity purchases following the end of the rate freeze next year. The measure was preceded by a power purchase agreement between power generator PPL Montana and distributor MPC that means consumers may see up to 50 percent rises in rates during summer 2002. In addition, the law grants the state the authority to establish the Montana Power Authority, an organization with the capability to sell bonds to create and operate generation and transmission facilities.

While supporters believe the law will hasten the move to a competitive, efficient electricity market, critics bemoan the lack of short-term protections for consumers. Plans to increase electricity rates persist, though the Public Service Commission has challenged the deal on the grounds that the PSC regulates wholesale power costs.

Kelly Brooks