PSC lack the votes to support HB 244 (repeal the MT RPS)

In another heather exchange this am with Brad Molnar, Travis Kavulla refused to support the motion by him and Bill Gallagher for the PSC to support the bill.  Commissioner Vincent was not present to join Commissioner Gutsche and Kavulla in opposition, and the PSC should revisit the matter next week.

I have not been watching the PSC as regularly as others these last few weeks, but the sense that I am getting from those that are involved in the body, is that with each new issue the idealogical gap between Commissioner Kavulla and Commissioners Gallagher and Molnar widens.

Executive Action in Senate Energy on SB 104

The Montana Senate Energy & Telecommunications took executive action on several minor bills yesterday, and also Senate Bill 104. SB 104 is proposed by freshman Senator Jason Priest, and is designed to inhibit the authority of the Montana PSC to implement inverted block rates.  The committee voted 7-5 on party lines to advance the bill to the full Senate.

The Committee also passed SB 7, which would require the reporting of the price and quantity paid for renewable energy credits, to the full Senate.

There was no action taken on SB 109, which would increase PPLs market power in Montana and effectively eliminate the Montana RPS standard. The Committee is expected to take up that bill on Thursday @ 3:00pm, though the Committee is expected to be occupied with SJ 4 & SJ 5 which call on congress to enact a balanced budget and term limits.  

MT PSC will not review inverted Block Rates, for now

Despite an almost 20 minute rant by Vice Chair Molnar, the young maverick Commissioner Kavulla made a motion to delay action until February to see if any parties appealed to the district court.

The PSC was going to use a new procedure to review the decision to implement inverted block rates, that was invented by Commissioner, i mean Vice Chair, Molnar.  Which would have used the PSC's broad investigative authority to, while, investigate themselves and the utility.

While the PSC decision (which was 3-2), is good for the institutions as it shows that there can be certainty in their decisions, it may have costs.  One has to think that an investigation could provide just the sort of hobby that Vice Chair Molnar needs...

Update: Mike Dennison has the full scoop up at the Billings Gazette  

The Wild West that is the MT PSC

I think the high point for me was on Monday, when the Great Falls Tribune decided that the action was so noteworthy that they provided the link to the stream on their website. If you have not read the excellent coverage by John Adams (including the video he captured) or two stories (Mon. & Tue.) Mike Dennison filed, they are fantastic and a must read for anyone that will have to practice in this environment.   

I hope that both John & Mike will continue to follow the PSC in the detail (or others).  It is always helpful in these venues to keep the shenanigans in the open so they don't ferment (as happened with one Commissioner) to full blown crazy.  

NWE's recent rate increase, one point

Most of the Lee Papers in MT covered the story with some variation of this article written by Mike Dennison, which makes two very important points:

"Because of the addition of Colstrip 4 and the Mill Creek plant, NorthWestern's electric supply rates for homeowners are climbing 15.6 percent, to their highest level in more than two years. Residential customers had been paying about 5.4 cents per kilowatt hour and will now pay 6.2 cents per kwh for the supply.

Delivery costs for electricity are dropping slightly, as the result of a complex rate case that the Public Service Commission recently concluded. The PSC granted NorthWestern a slight increase over its July delivery rates, but the final outcome reduced a temporary rate increase enacted at the beginning of the rate case, thus the decrease in supply rates as of Saturday."

Just so we are clear, Colstrip and Mill Creek are increasing rates for Montana Consumers...

NWE agrees to $765,000 in fines

In early December, the MT PSC approved a settlement with NWE over matters concerning how they handled the affiliate transaction of Colstrip 4 (which was owned by an affiliate of NWE before being "bought" by the consumer rate-base).  In particular, the MT PSC found that NWE had used it's public utility revolving credit line to finance transactions, which is backed by the Montana Consumer, without seeking the MT PSC's approval as required.  The matter was finally resolved in District Court, where the settlement was reached.  

The Order and settlement provide that NorthWestern Energy will invest shareholder money in three projects:

• $500,000 in a 1-MW flywheel demonstration project to help augment their new Mill Creek generation station, and primary frequency regulation resource for load and supply variability
• $265,000 in creating a Smart-Grid demonstration house in Helena, that will showcase the potential for new technologies and energy efficiency. 
• Continued participation and funding of the Pacific NorthWest Smart-Grid pilot, which is a multi-million dollar effort of utilities in the region to test and deploy certain technologies.  

Commissioner Molnar dissented on the Order, but did not provide any written dissent explaining his decision.   Neither Mike Dennison or any paper in the state picked up the story...  

Update: Inverted Block Rates in Montana

The Montana PSC denied all Motions in the case, yesterday Dec. 28th, 2010.  This means, for better or worse, the Montana PSC original order implementing decoupling will stand, until the whole concept is outlawed by the Montana Legislature.

Inverted Block Rates and Decoupling Dead in Montana?

On December 20th, the Montana Consumer Council, Human Resources Council District XI/Natural Resource Defense Counsel (HR/NRDC) and NorthWestern Energy filed a joint motion asking the MT PSC to reverse the Commission's previous decision to implement inverted block rates and decoupling.

The parties agreement on this outcome can be interpreted in only one way: The MT PSC really messed up.

The fact that both supporters of the new rate design (NWE and HR/NRDC) and opponents (MCC) have decided that the MT PSC's final rule on the matter is so flawed that it is better to just junk it, demonstrates how fundamentally flawed the final order is.

The parties highlight a number of specific problems in their individual motions that include the MT PSC's lowering of NWE's rate of return for certain energy efficiency investments, not including natural gas, and the use of weather normalization.

It is truly disappointing that the MT PSC was not able to work with the parties, including the MCC which did not oppose the new rate designs on principal, to get a pilot proposal in place that would work.

It is after all, not a novel idea.  All three regulated electrical utilities in Idaho have similar rate structures, the Montana Power Company used to use these rates, and across the United States they are known to produce increased energy efficiency investment.

I understand that the Motions will be considered by the new Montana PSC in January.  One outcome, which would be very unfortunate, is to not honor the joint request of the parties and leave the fundamentally flawed order in place.  This would result in a failed program, that would set-back efforts to implement these common sense rate structures for years.

Though i note that one Montana Legislator has requested a bill draft that would "Limiting a public utility's ability to implement inverted block rates".  Thank freshman Jason Priest for his help in making it harder, if not impossible, to apply basic cause causation principals to our electrical rates.  


 

Inverted Block Rates & Decoupling, approved

I just had a chance to watch the MT PSC's meeting from last week.  It was a long and complicated meeting, but here is the outcome as I heard it:

• Decoupling is approved on the Electric Side only
• Inverted Block Rates are approved for both electricity and natural gas

It is important to keep in mind that these are pilot proposals, with a (i believe) 4 year time horizon.  The PSC should have an Order out in mid-December, which will clarify a number of the procedural issues around implementation.

A previous post on the topic, implied that the splits for inverted block rate groups would apply to all consumption by the individual.  Based on what i heard, this is not the case.  All customer would get the benefit of the the reduced rate for their first 350 kWh.

Please, by all means, comment if i got the decision of the meeting wrong.  I had been waiting for Mike Dennison, Charles S. Johnson or frankly anybody to write up the meeting, but alas...

Public Service Commissioners, standard for suspension

This post is not intended as an editorial for the Governor to take a specific action in regard to a specific commissioner (ex A, ex B).  It is just an observation that the rules for removal of Public Service Commissioners differ than those of other elected offices, and may afford the Governor a right.  

Montana Code Annotated, 69-1-113:

Removal or suspension of commissioner. If a commissioner fails to perform the commissioner's duties as provided in this title, the commissioner may be removed from office as provided by 45-7-401. Upon complaint made and good cause shown, the governor may suspend any commissioner, and if, in the governor's judgment the exigencies of the case require, the governor may appoint temporarily some competent person to perform the duties of the suspended commissioner during the period of the suspension.

I would be interested in the analysis of inquiring legal minds, and if any such precedent exists, but my read of the statute is that the Governor has the right to suspend a Commissioner.