Monday, May 15, 2006

Thanks For The Deregulation

Former Missoula Mayor, Mike Kadis worked dilligently to get some power generation under public ownership while he was in that office. It is unfortunate that he did not succeed.

Read it and weep

Efforts by PPL Montana to sell its Montana power capacity out of state could leave the public here worse off than California consumers during the “California meltdown,” Montana Consumer Counsel attorneys argue.

The Counsel is asking federal regulators to move quickly to stop PPL Montana from replacing contracts with NorthWestern Energy by selling power outside of Montana.

“Montana’s electricity users depend upon this PPL Montana capacity,” attorneys for the Counsel wrote in a motion this week. They asked the Federal Energy Regulatory Commission to move quickly to avoid “consumer abuse.”

This week’s motion was prompted by comments that Pennsylvania Power and Light Chairman and Chief Executive Officer William F. Hecht made to financial analysts on Sunday. In response to a question, he said that PPL had been selling some production in the Pacific Northwest and might be able to replace its contract with NorthWestern with smaller contracts elsewhere that carry higher profit margins.

PPL Montana’s contract with NorthWestern Energy expires in June 2007. While FERC has been considering whether to allow PPL Montana to charge rates based on what the market will bear rather than on its costs, the company has been “hedging” the contract by selling power outside Montana where it can charge market rates, Mr. Hecht said.

The Counsel already was seeking an expedited ruling from FERC on its contention that PPL Montana should be required to sell power in Montana on a cost basis rather than a market basis. The Counsel argues that competitive markets for power do not exist in Montana.

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