Missoula power revisited and mea culpa

by Pete Talbot

I took some big hits from people on council who I respect for the piece I wrote yesterday on Missoula buying into a coal-fired generating plant.

Some of those hits were well deserved. I did not allow enough time for responses from the mayor and council before posting the story. Their comments are below.

But first some background. I received a couple of tips from folks yesterday that Missoula was considering buying some power from a controversial coal-fired generating plant being built near Great Falls. The main source was a story out of the Independent-Record newspaper in Helena. Helena had just rejected a similar offer to buy power from Great Falls, and Missoula was quoted as having signed a letter of intent (unable to link to quote but here is the story on Helena’s rejection).

And here are our city leaders’ responses. First, Mayor John Engen:

“Electric City (the Great Falls entity selling the power) will save the City of Missoula between 10 and 15 percent on our electric bill as compared to our default rate with Northwestern Energy. If the Highwood plant (the planned coal-fired generator) comes online, we can expect further savings. Electric City provides more predictability, local control and better access to decision makers than our current vendor. We are not locked into anything.”

And this from Councilwoman Heidi Kendall (Ward 1):

“It’s important for people to know that the alternative is NWE (Northwestern Energy). I’m not sure why people are defending this utility monopoly. Did you see the article today about the executive salaries/bonuses? We are customers — unless we can figure out something else — so we pay a share of those. Is that the best we can do? I don’t think so. Does it make sense to try something else, given a choice? Yes.”

I also quoted some facts from the Montana Environmental Information Center (MEIC); staunch opponents of the coal-fired plant. While I believe the facts to be accurate, Ward 3 Councilwoman Stacy Rye brought up an interesting point:

“MEIC did NOTHING to support the five cities’ bid on NWE. I don’t know if they opposed it actively but they did not support the bid for our largest transmission and distribution lines, which would have become publicly owned. (snip) I’m a huge supporter of public power and could give you numerous reasons why public power is a good thing. One of those reasons is the ability to negotiate. Do you think a publicly owned facility in Montana would be easier to negotiate with or a private utility when it comes to influencing getting power to be as clean as possible? We can’t negotiate that until we have a public utility and again, MEIC did NOT support Montana Public Power.”

About signing the letter of intent, Ms. Kendall added:

“We don’t have much time to decide (just until October, just to keep our options open), because of the new state law which I believe is HB25.”

Mayor Engen wrapped up his comments with this:

“For Missoula, the annual savings is estimated at $70,000. That’s a police officer, or a firefighter, or a public-health nurse, or more street trees, or more asphalt or a bit of inflation. While the City of Missoula is a powerful driver of Montana’s economic engine, we have no surplus of funds. Every dollar counts and over 10 years, we might expect a savings of $1 million or so.

Council will need to consider a contract in the near future. It may, by a majority vote, authorize me to sign such a contract, propose modifications, or reject it.”

Now for the other side. First, from Helena’s George Ochenski, in an email to me:

“There are NO real numbers attached to the Highwood Plant. They have been tossing around numbers ranging from $500-750 million, but that doesn’t include any costs for carbon capture and sequestration, which is not planned at the facility but, say the developers, can be added on later. Right, added on.

Anyhow, that (Missoula) went along with this is truly disgusting. Think of the air quality there now — so, what’s the benefit of buying into a coal-burning plant for your valley? OR how about the costs that will go up for NWE customers because the city (Missoula), Great Falls, and others will pull out of NWE’s customer base? Apparently your Mayor said the city would save $70,000, which, at least what I heard, he says ‘is enough to put another policeman on.’ Great. $70,000 to buy into a polluto-max plant that will be obsolete before it’s even built so you can hire another cop.”

And some more from MEIC:

“It’s a crazy and risky financial venture. Electric City Power’s analysis of the cost of power doesn’t include the future cost of carbon dioxide control. Right now Congress is considering carbon taxes, and cap and trade programs, that will put a price on a ton of carbon dioxide. When this happens, the cost of electricity from coal-fired power plants will increase. Their costs will finally reflect the true cost they impose on the natural environment.”

So, I hope this updated story is more “fair and balanced” as they say over at Fox News. I was too quick on the trigger in posting yesterday’s piece without allowing all sides to weigh in. For that I apologize. As one council member emailed: “I hope … that you will think a little bit before you make cheap shots.” Ouch.

Now I’m no fan of Northwestern Energy but I still think it’s a bad idea for Missoula to buy into this Great Falls coal-fired generating plant. I welcome comments from other council members and experts in the field (for I certainly am not). This will be an on going story.

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  1. petetalbot

    I received this additional comment from Ward 3’s Bob Jaffe:

    “On August 6th the city council authorized the mayor to sign a letter of intent to enter into a contract with Electric City Power to buy electricity.

    This decision has come under fire in the last couple of days after the Montana Environmental Information Center sent out an action alert to their members. MEIC has opposed plans to build a new coal fired power plant outside of Great Falls. The purchase agreement from the city helps secure financing for building that plant. After receiving a salvo of emails from our friends in the conservation community it has become apparent that this issue deserves more discussion.

    There is concern that the decision was made without adequate public comment. There was a presentation on Wed. 8/1 in A&F and it was on the consent agenda the following Monday.

    The actual contract with ECP is being considered by the administration and will be presented to council in the next few weeks. So there is still an opportunity for folks to weigh in on the particulars of this deal and for the council and community to have the debate over whether we should go forward with this proposal and if so, what the terms should be.

    Here is the link to the A&F meeting with links to further documentation including the contract:
    ftp://www.ci.missoula.mt.us/Packets/Council/2007/2007-08-06/070801af.pdf

  2. ochenski

    Pete –

    More Missoula discussion is indeed in order on the proposed Highwood plant. To help out with some info, please see the article below which is from today’s (8/17) Great Falls Tribune.

    There is one mis-quote, however, and that was from Helena City Commissioner Alan Peura who is quoted as saying he didn’t want anything to do with “Clean” coal. In fact, at the meeting, which was attended by MEIC’s Anne Hedges who presented testimony, Commissioner Peura said he has no intention of hitching our environmental wagon to “King Coal.”

    Finally, in case you didn’t see it, here’s a quote from Nicholas Kristof’s column “The big melt” (NY Times 8/16):
    “I ran into Al Gore at a climate/energy conference this month, and he vibrates with passion about this issue — recognizing we should confront mortal threats even when they don’t emanate from al-Qaida.
    “We are now treating Earth’s atmosphere as an open sewer,” he said, and (perhaps because my teenage son was beside me) he encouraged young people to engage in peaceful protests to block major new carbon sources.

    “I can’t understand why there aren’t rings of young people blocking bulldozers,” Gore said, “and preventing them from constructing coal-fired power plants.”

    The Highwood plant, if it’s ever built, is designed to be a coal-fired power plant.

    Today’s Trib article follows:

    http://www.greatfallstribune.com/apps/pbcs.dll/article?AID=/20070817/NEWS01/708170324/1002

    Helena not likely to accept power offer
    By RICHARD ECKE
    Tribune Staff Writer

    Efforts by Great Falls officials to sell electricity to the city of Helena might have failed this week.

    At a work-session meeting Wednesday in Helena, opponents of the deal complained that the source of power would be a coal-fired power plant, and there was too little time to make a thought-out decision. Helena commissioners were skeptical as well.

    The city of Great Falls’ utility arm, Electric City Power, must lock in most of its electricity customers by Oct. 1, under a new state law that partially reregulates the state’s energy industry.
    Great Falls City Manager John Lawton said Thursday that the city used a “soft-sell” approach with Helena. Helena’s city commissioners didn’t turn down Electric City Power outright, but they might formally reject the plan as early as Monday.

    “We’re doing OK,” Lawton said. “We’re going to sell enough contracts to meet our goals anyway.”

    Coleen Balzarini, city of Great Falls fiscal officer, said the goal is to sign up customers to 30-year contracts totaling 50 to 60 megawatts of power. A contract would run from 2012, when the proposed coal-fired Highwood Generating Station is projected to go online, and run through 2042.

    The city wants to own 15 percent of the Highwood plant, meaning its share will be about 35 megawatts. Because customers use power at different times and rates, the city will be able to sell power beyond that amount, Balzarini said. She added that customers are being offered contracts on a cost-plus basis, rather than at a set price.

    In Helena, Lawton argued the contract would give the capital city stable power rates, but officials were cautious.

    “Environmentally, I have no intention of hitching our wagons to ‘clean coal,'” said Alan Peura, Helena city commissioner.

    Commissioner Bob Throssell added that reducing NorthWestern Energy’s business by buying power from Great Falls could hurt Helena consumers.

    “There is no relationship between volume and price in electricity,” Lawton said later, adding that is “a common belief.”

    Plant supporters say the Great Falls facility would be one of the cleanest coal-fired power plants in the country.

    Highwood opponents were buoyed by the negative reaction in Helena.

    “I think the city of Helena made a wise choice at this point,” said Kathleen Gessaman of Great Falls, a critic of the coal plant.

    Despite the apparent rebuff, Electric City Power has customers signed up for 30 megawatts of short-term power. Those power customers have the option to sign 30-year contracts, Balzarini said. She added the long-term contracts will allow customers an “out” if the proposed power plant is not built.

    A number of potential new customers have been contacted, and many gave positive responses, she said.

    The Great Falls City Commission is expected to formally agree to buy power from Electric City Power, and the Highwood plant, at a commission meeting Tuesday. Balzarini said the city will be the first to formally sign a long-term contract.

    The Associated Press contributed to this report.

  3. Larry Kralj, Environmental Rangers!

    Pete, only a friggin’ MORON would enter into an agreement for electricity from a plant that will NEVER BE BUILT! I guess that it’s hard for people who don’t live here to understand, but the people of GF are outraged about this plant. They were NEVER allowed any input in the city’s decision to build this boondoggle. And I can guarantee that there will be a violent reaction to any attempts to build it. It just ain’t gonna happen. Lawton has already resigned, the mayor and city council people are about to be voted out, the neighboring landowners are suing, and MEIC among others have brought lawsuits. AND the people of GF are keepin’ their powder dry just in case. I say this in all serious, ANY attempts to build that thing WILL be met with some very serious unintended consequences! We don’t take kindly to having a giant meth lab built in our fair city!

  4. noodly appendage

    My friends John Engen and Mike Kadas are not morons. There’s no harm in expressing support for independent publicly owned generation facilities, either.

    I didn’t know that Lawton had resigned. So much the worse for the city of Great Falls.

    What a troll.

    Pete, I don’t remember you actively supporting the five cities’ bid for NWE either. Maybe you did and I don’t remember it.

    There’s a group out there who want no new power facilities. They’d be happier if we were sacificing virgins and worshipping the sun and dying at thirty of easily preventable diseases. They’re luddites. But the rest of us are going to need power plants and energy sources. Should they be public facilities or should we still be monopolized by PPL and NWE?

  5. Larry Kralj, Environmental Rangers!

    Well, I say that they ARE morons!, nudey. Why? Because they have not done their homework. You see, again, let me repeat it so that it’s very clear. The “proposed” plant in GF will NOT BE BUILT! EVER! I’m on the ground here, and I know what’s going on. Democracy is not dead in GF. The people of GF will NOT tolerate this giant meth lab in their community. We are NOT stupid! It will in NO WAY benefit the community here. So, why should we allow it to be built? We won’t. If it takes violent civil disobedience, so be it. It’s happened before in other areas of the country where corporate fascists had completely ignored the will of the people. And hey, isn’t that what democracy is supposed to be about, the will of the people and the consent of the governed? You see, if we are not allowed democracy, we will TAKE it! And I really don’t think there’s a damned thing that anyone can do about it. I call these missoula leaders morons for NOT having investigated the true level of discontent out there regarding this proposed plant. It is NOT viable, so why pretend that it is? There was only ONE public forum allowed on the plant held by SME. And about a hundred and fifty people showed up. The pro and con were nearly evenly divided. But here’s the rub. Every person FOR the plant was an electrical employee from around the state brought in to testify. Every person AGAINST the plant was from GF or the areas downwind. It just ain’t gonna fly. Mark my words. It’s over. It’s done. THAT’S why I call these people morons. The guy from Helena had it right. Why couldn’t the guys from mizzoola, a much more progressive place get it right? Cause they’re morons. And on more thing. How DARE these people in other cities attempt to decide what is and what isn’t built in GF?! Where do they get off demanding that WE must breathe toxins for them?! Them’s fighting words, and we ready! Does this help, nudey? All we are demanding is DEMOCRACY! All we’re demanding is what the GF city council took away, our right to vote on this thing. So, when in the course of human events, it becomes necessary to prevent yourself and your family from being poisoned, you do what you gotta do. If you want it, nudey, put it in YOUR town!

  6. ochenski

    Noodly is right that neither Engen nor Kadas are morons, but Larry is right about what a hugely controversial subject this plant is in Great Falls — and not only the environmental and economic impacts, but the way in which the whole project moved forward behind closed doors that kept citizens out of the process and in the dark about what was being committed by whom for how long.

    But before the discussion goes to far astray, perhaps a point or two of clarification.
    The attempt by the five municipalities to buy NWE would have bought only the TRANSMISSION capacity (because that’s all NWE has), not any generating facilities.

    Transmission, and NWE, are already regulated by the Public Service Commission. Had the cities succeeded, transmission would have been UNREGULATED by the PSC — so we would have actually gone backwards towards deregulation instead of forward into disclosure, financial statements, etc. reviewed by a publicly-elected body with a full staff of utility experts and lawyers and the Consumer Council to back them up.

    The costs Montanans have been experiencing in their utility bills come primarily from increases in the cost of the power from generation facilities that became UNREGULATED by the disastrous 1997 Republican-backed deregulation legislation. After the former Montana Power Co. sold off the hydroelectric dams that had already been paid for by utility customers to Pennsylvania Power and Light (PPL), the previous REGULATED cost of energy went through the roof. Whereas MPC was allowed to charge us the cost of doing business plus a reasonable profit margin of about 10-12%. PPL was and remains free to charge whatever the market will bear.

    NWE, as the “default supplier” under the dereg legislation, now has to purchase power on the open market. Previously, (as MPC) it was a vertically-integrated utility that produced it’s own power and distributed it to its customers. Obviously paying whatever the market will bear is a lot different than taking extremely low-cost hydro you already own and shipping it out for use. Hence, Montanans are getting the hose on their utilities and now pay the highest rates in the NW area. By the way, Idaho saw what was going on with dereg as soon as MPC announced it was going to sell the dams (and associated water rights) and killed their dereg bill immediately. They still have low-cost, regulated power.

    As an early founder of the Buy Back the Dams effort, we targeted the right thing — power generation. But two million or so spent against the citizen-based effort turned it from a 2-1 support in the citizenry to a 2-1 defeat at the polls. The power of money can’t be underestimated.

    But here’s the big deal. Under the Buy Back the Dams proposal, the state would have bought the dams, they would have been acquired and run under a state Public Power Authority with full legislative oversight and public involvement and regulation by the PSC. None of that would have happened with the cities’ effort on NWE — hence, many who are knowledgeable about utilities were, to put it mildly, not particularly supportive of the cities’ effort. Basically we gained nothing because NWE is already regulated, only allowed a marginal profit margin, and we would have lost that had the cities taken it over.

    In the end, what you are seeing by Gt Falls is, in many ways, proof that the skepticism about how the municipalities might run a power company were justified. If you don’t believe it, go ask Engen for the financial breakdown on how much the power was going to cost from this highly hypothetical — and dirty — coal plant. As Noodly said, he’s no moron. But even a genius can’t tell you what he doesn’t know and no one can give you a final tally on what power will cost from the proposed Highwood plant — especially in light of the pending carbon tax and cap-and-trade proposals in Congress, some of which are almost certain to be implemented (hence, Citibank and others in the financial world downgrading coal investments).

    In the end, however, this may all be moot because Larry is right about all the lawsuits pending over the Highwood plant. Already the Gt Falls commission had to reverse a zoning decision they made illegally and that’s just the first of what are likely to be a series of legal challenges they will lose.

    As far as Lawton goes, I thought he merely announced his resignation (retirement), but had not yet actually resigned. But here’s the deal on that. Just like industry lobbyists can stand up in front of a committee and make endless promises about how clean and harmless some project will be, Lawton can talk all he wants about what a good deal this will be for Mizoo. In the end, if Mizoo gets hosed, what will Lawton do? Not a thing. He’ll be gone, he won’t be making the decisions, and your citizens will be stuck with the tab for his false promises and fiscal mistakes.

  7. Larry Kralj, Environmental Rangers!

    Two points. Lotten has only said that he is “retiring”. He has yet to do so. Rumor has it that it could be quite soon. And it was the Cascade Co. commissioners that had to backtrack on the zoning, not the city council. For you see, the proposed site is in the county. Also, the three commissioners are NOT unanimous in their support for this plant. Peggy Beltrone has come out against it. But my basic point again is this. Can this plant really go forward when the citizens of GF overwhelmingly don’t want the damn thing? THAT is the real test case. And I’m saying that it can’t. Democracy will prevail. And again, how could ANYONE even consider putting that plant here when no one wants it? Don’t the people that actually live here have a say in the matter? If it comes to blows, I welcome it! It could be the start of a great revolution. But hey, if these fellas aren’t morons, WHY aren’t they building it in Mizzoola??? THAT is the question! Maybe Zoolians would love to have all the pollution in their valley! NO ONE has the right to ask another to breathe crap for them, nudey.

  8. ochenski

    Larry, thanks for the correction on the county commission making the zoning error, not GF council.

    You hit the nail on the head by asking if Missoulians would like to be breathing the pollution this plant will produce, which of course they wouldn’t.

    What you’ve done with the question is bring all the “externalities” of coal power to the forefront. Would Missoulians want to have their valley dug up in coal strip mines that will interrupt their water table and trash their aquifers? Of course not. Would they want a new railroad built through their ranches to haul the coal to Great Falls? Of course not, just like the Tongue River ranchers don’t. The examples are literally endless.

    What it all points to is exactly where the AERO blueprint headed — forget coal, new powerlines and strip mines and get going on local power from a variety of renewable and sustainable sources for local consumption. With the first step being an aggressive energy conservation program since conservation is the cheapest, cleanest, and easiest “new” source of energy.

  9. Heidi Kendall

    Thanks, Pete, for fleshing out the story and for prompting a good discussion. Before we vote on this we will clearly have the benefit of an enormous amount of information (some of which by necessity will be speculative) and opinion to educate us.

    There seem to be a great many negatives, and a lot of uncertainly, regardless of whether we go with ECP or stay with NWE.

    I would like to know more about the possibilities for better energy choices in the future and how our decision relates to that. If Missoula’s decision has a huge impact on the future of people all over Montana, as appears to be the case, how can we use this opportunity to educate people and help our state do the best we can under these less-than-ideal circumstances?

    I appreciate very much understanding what is at stake here. Thanks for all the information.

  10. noodly appendage

    Both contradictory statements posted by Larry Kraj, troll, on this thread:

    ” Lawton has already resigned”

    “Lotten has only said that he is “retiring”. He has yet to do so.”

    as far as the thread getting out of control, I’d say calling me a “little hypocrite nancy boy” was fairly out of control, wouldn[t you, jay and jhwy?

    It followed right behind his calling Kadas and Engen “morons”.

    Is that the kind of discussion you’re interested in on this site?

  11. I am going to remind all that civil intelligent conversation is what we are really trying to promote here.

    We might not all agree on each other’s opinion, but I’d like to see that all are respected.

    I’ll ask that any of you email me if it gets out of hand and something that needs attention is missed. I am on fires now – so it’s pretty tough. And email works better as I haven’t had time to read as I’d like (yet alone post.)

    jhwygirl@hotmaildotcom. Just make sure to put 4&20 in the subject or it may be deleted as spam.

    PEACE everyone, OK?

  12. petetalbot

    jhwygirl takes time out from fighting fires, God bless her, to remind us to be civil. She’s right. I appreciate Larry’s passion, seeing that he’s on the ground in Great Falls next to the proposed coal-fired generating plant, but name calling ain’t gonna help (believe me, Noodly pushes my buttons, too).

    Good things are coming out of this discussion. I’m pretty damn sure that this dirty power issue won’t sail through Missoula City Council, now.

  13. noodly appendage

    Thanks jhwygirl.

    Good job Pete with the mea culpa and presenting the publicly owned power side. Sorry about your buttons, but they’re your buttons, not mine.

    I supported the five cities’ bid while most montanans sat on the sideline or second guessed the effort.

    Another opportunity missed.

    We all know deregulation was a stupid mistake by the legislature. What some of us dont’ know is that very few from either party opposed the effort. I always give David Ewer (the current governor’s budget director) kudos for his efforts to fight dereg. He also led an effort to get rid of video gambling.

    I think power, not clean power, not carbon in the atmosphere or global warming, but energy and power, is the twenty first century problem. As I posted elsewhere, I’ve been influenced some by “the long emergency”, which paints a grim picture of the future as the oil runs out.

    Controlling power (and power distribution) will be a big issue if that scenario holds. Public power is the better way to go.

    Someone makes the point that Great Falls’ effort is a glimpse into what public power and the five cities effort could have brought. I’d say that’s a pretty powerful statement AGAINST democracy and public control of anything. I’d say I’m not gonna buy that one. If you don’t want to trust our form of government, elections, elected representatives, etc, then fine. But I’m going to stick with it, thinking it’s better than the alternatives.

  14. Larry Kralj, Environmental Rangers!

    I’ve been advised to be “civil”. Hmm. Seems that it’s OK for Nerdly App. to refer to me as a “troll”, but I can’t refer to him as a nancy boy. Well, OK then. But I think that if name calling applies ONLY to me, sumthin’ ain’t right. And let’s face it. Some of the things that are going on are criminal in nature. I don’t feel the need to be civil with criminals. Never have, never will.

  15. ochenski

    Please note the letter from Dr. Cheryl Reichart to Mayor Engen posted below. I received permission from her to post it here to add more information and perspective to the discussion. Please also note her specialties, Pathology and Biological Chemistry, which are particularly pertinent to any discussion about the environmental or health effects of the proposed coal-fired power plant.

    From: Cheryl Reichert
    Date: August 18, 2007 9:06:15 AM MDT
    To: mayor@ci.missoula.mt.us
    Subject: Just Say “No!” to costly dirty electric power from Great Falls

    Dear Mayor John Engen:

    As one of the founding members of Citizens for Clean Energy Inc. (CCE) in Great Falls, I am advising that you and the City Commissioners of Missoula exercise extreme caution in your negotiations with Electric City Power. My opposition stems from plans for ECP to ultimately obtain power from the proposed Highwood Generating Station (HGS).

    My mother helped to write Montana’s 1972 Constitution, which supports our right to a clean and healthful environment. The proposed power plant uses an outdated dirty technology (it is definitely not “clean coal”), and future plans by the developer to sequester CO2 from the coal plant are without basis in reality.

    HGS is a costly, financially risky, and unhealthy venture. This plant alone will add the global warming equivalent of 500,000 vehicles per year. With much of Montana already on fire and suffering from prolonged drought, we cannot afford to further contribute to this problem.

    The HGS is over designed for the modest needs of Southern Montana Electric Cooperative, and it squanders precious water, each day evaporating half of what our entire city uses.

    Four lawsuits have already been filed against HGS on the local, county, state, and national levels. CCE has been instrumental in each of these actions. Please visit our website at cce-mt.org to obtain more details.

    You do not want to drag your beautiful city into this mess. Please share this email with your city council members.

    Respectfully yours,

    Cheryl Reichert
    __________________________
    Cheryl M. Reichert, M.D, Ph.D.
    Pathology and Biological Chemistry
    Great Falls, MT

  16. Larry Kralj, Environmental Rangers!

    CAN’T WE ALL JUST GET ALONG?! Short answer. No. For you see, I know Cheryl. She is one on-the-ball lady. Doctor, community activist, expert in her field, and also one of the people who have been silenced at GF city council meetings! This ain’t democracy, folks. The mayor of GF has people ARRESTED if she feels they violate the “three minute rule”, or “get off point with their comments”, or are “impertinent”. This is what we are facing in GF. Our city govt. is outta control. Jon Lotten has become a dictator. He allows NO dissent from any quarter. THIS is what we are up against! And yet the people of GF refuse to give up or be cowed. Again, GF should be an example for the rest of the state. We are demanding democracy. We were allowed NO public meetings on this plant. We had our vote STOLEN from us by the city council. And we are restricted to THREE minutes at the end of city council meetings. And NONE of our questions are ever answered regarding finances surrounding this plant. Is anyone outraged yet? We are.

  17. Dan Hall

    There are 3 comments about this issue that I would like to make. I should let you know that I have been involved with the issues over Highwood and SME since the beginning of this year, so I am a relatively late comer. My participation has been centered on the adverse effects to the Portage National Historic Landmark and the public process as identified in the National Historic Preservation Act (NHPA).

    First, having witnessed SME and others in public meetings to discuss Highwood, I have my doubts about the accuracy and content of the presentation given to the Missoula City Council. The public participation part of the Section 106 process, from the NHPA, is suspect and wasnt conducted properly. If the City Council intent was to enter into an agreement to purchase power, why wasnt that stated on the publically-posted City Council agenda instead of a harmless note that there was going to be a presentation by Great Falls Electric Power? The entire public process over Highwood and the NHPA is tainted, it would seem as if that taint has now extended to Missoula and our council and mayor.

    Second, I see from various posts here that some of the City Council are getting a little defensive. I am hearing this in my conversations with council as well as hearing from others around town. Lets not change the subject by dragging up Northwestern Energy. But, if thats the argument, then so be it. But remember that SME, Southwestern Montana Electric is a group of electric coops, which is a different creature for the Public Service Commission than Northwestern Energy. This is a coal fired power plant, and it is not related to the failed bid by Montana Public Power. If City Council members are getting defensive about the comments they are getting, they should be reminded that listening to the voices of our community is part and parcel of being on the council.

    Third, the City of Missoula should not financially support a venture that will result in the delisting of the Portage National Historic Landmark. I realize that folks around here are probably burned out on the whole Lewis and Clark gig, but that doesnt excuse the simple fact that the construction of Highwood will cause immitigable damage to the Portage NHL. We will be remembered by our children as those who destroyed a resource associated with the Corps of Discovery in exchange for a coal fired power plant. The people of Missoula are supportive of historic preservation in its many forms, trading a few shiney coins for the destruction of our shared heritage is not acceptable.

  18. noodly appendage

    I’d be interested in a report from the fires. I drove through almost two hundred miles of dense smoke today down I 90.

    I’ve never seen anything like it, quite apocalyptic.

  19. petetalbot

    Me too, Bozeman to Missoula. Nasty, especially around Butte. Except it started raining around Clinton, it cooled down and the skies cleared. It was a beautiful thing.

  20. ochenski

    I received permission from Public Service Commissioner Bob Raney to post these comments he sent yesterday to Missoula City Commissioners regarding whether or not the City should buy into the Great Falls power fiasco.
    August 20, 2007

    Dear Commissioner

    After serving for over 2 years on the Montana Public Service Commission (PSC) I have learned that the most important information on making decisions often never gets debated. Therefore, I am offering a few points for you to consider and ask about before making your decision on whether to commit the taxpayers/ratepayers of Missoula to a long term contract with Electric City power (ECP) of Great Falls.

    I will make my comments in the general order of ECP’s PowerPoint presentation on its Power Supply offer.

    Hope this helps you with your decision making process,

    Bob Raney
    PSC Commissioner

    1. ECP plans to offer electricity at cost based rates. That means they buy it from some entity and then resell it to you. How is that any different than what Northwestern Energy does? NWE uses a highly trained staff to buy electricity from the market while mixing resources and contract lengths. NWE does not receive one dime of profit for providing this electricity. The cost of electricity is passed directly to the customer with zero mark-up. ECP plans on a 3-5% mark up for providing that service.

    2. NWE will continue to be the transmission and distribution company. ECP acquired electricity will have to pay the same transmission and distribution costs as does NWE acquired electricity. NWE makes all its money on transmission and distribution and none on the price of electricity. ECP must make its necessary return on the electricity it sells.

    3. The legislature, the 5 member PSC, and the Governor all could see that House Bill 25 – the reintegration act – was a necessary step to restore the ability of NWE to acquire, build and own generation facilities of its own. In order to do that, NWE had to know its customer base before it could go to the bank and to the PSC for approval of generation acquisition. It can, once again, after October 1st provide its own generation for its control area, and the generation will be rate based and regulated by the PSC.
    (A point on regulation – the PSC only regulates private entities such as MDU and NWE, not coops, MPP or ECP.)
    (Another point on regulation – when NWE makes a mistake – its shareholders pick up the tab. When ECP
    makes a mistake, its ratepayers pick up the tab).

    4. The PSC makes its decisions under the Montana Administrative Procedures Act, with intervention from the Montana Consumer Council and many others. Power purchase agreements are given intense review from both the PSC and interveners. The decisions on rate increases and power purchases are made by an elected body of 5 Commissioners working with a professional staff of 34. If better power purchases are available than NWE is making, NWE gets penalized by the PSC and NWE stockholders take the hit. It is certainly not a haphazard, hit or miss decision making process to purchase electricity – the PSC and MCC are assigned the task of insuring that NWE makes the best available purchases and that NWE ratepayers are getting the best deal available. What will be the process for protecting Missoula taxpayers and ratepayers under ECP supply?

    5. Have you investigated how it is that ECP can purchase power cheaper than NWE? Is that a short term lucky hit? Is it that ECP has folks who are better at making power purchases than NWE? (Who are those folks?) Is some entity subsidizing or holding down the cost in the short term but unable to so in the long term? Can ECP prove to you that it can make these same cheaper purchases in the future?

    6. ECP offers opportunity for renewables in the mix. NWE is required by law to have 15% renewables in the mix by 2015 and is on course to meet it. ECP will, by economic necessity, meet all of the load it can with Highwood coal plant and renewables are an at will opportunity only.

    7. It is difficult for me to imagine that “local control” by a City of Great Falls entity is better control for the City of Missoula than is the elected Public Service Commission and Constitutionally appointed MCC.

    8. You will notice that ECP’s power resource portfolio does not have Demand Side Management (DSM), Energy Efficiency (EE) or any conservation that is required of NWE. The cheapest electricity is that that is never used. A power buying entity like ECP has no interest in getting you to use less, they need you to use more to pay their bills.

    9. How genuine is ECP’s commitment to renewables when they must sell the Great Falls portion of a coal plant that is much bigger than the demand calls for. (Another point that makes it necessary for SME/ECP to sell electricity, not conserve it.)

    10. It is a ruse to say a plant is “carbon capture ready.” If you buy that line, you would buy the proverbial bridge as well. The real cost of carbon capture has little to do with the construction of the Highwood Plant. All the cost comes from actually capturing, compressing, shipping and storing carbon. When Carbon Capture is added on, post construction, the costs are even higher. A plant must be designed from the beginning to fit all the siting criteria necessary for siting a carbon capture facility, including – storage reservoir location and use, pipeline corridor and siting, liability for the stored carbon and a long list of responsibilities. Highwood will not capture carbon until forced to, and then at a very high cost. Plan on eating that cost if you buy into the ECP plan. And, be aware that Highwood will be expensive electricity before they are required to capture carbon.

    11. How can ECP/SME say operating costs are controllable when the coal must be shipped in by rail? Have you inquired about the difficulty of moving coal around America now and just how much the costs are rising annually – it is another captive BNSF market. And, how are operating costs controllable with CO2 legislation coming down in the near future?

    12. In order for ECP/SME to avoid buying electricity at peak prices when national and area demand is highest, they must significantly overbuild the coal plant and sell power to the market much of the time. A much wiser choice is to build to demand and control peak with DSM and real time pricing/metering (not in ECP/SME plan).

    13. Price stability is secured by having a wide mix of resources for a wide mix of electricity needs and all hours of the day and night all year long. The most unwise, riskiest and least stable plan is to minimize resources or go with one – Highwood.

    14, ECP talks about long term contracts. Do you know what that means in terms of their purchased power and SME’s coal and railroad contracts? Is a 5 year contract for coal a long term contract when the plant has to operate for 30 years? Do you trust BNSF will be reasonable once the plant is open and burning coal and a contract needs to be extended? Do you think PPL will provide electricity at cheaper rates once ECP has an obligation to serve for 30 years? If ECP can’t get PPL power cheaper than NWE, who will they turn to if Highwood fails?

    15 ECP says it will mitigate risk with well managed power purchasing and development at SME. What makes you believe that SME can do that better than PSC regulated NWE? Have you given any thought to the ECP claim that it will have a well balanced portfolio? If so, again ask where is the conservation, DSM, EE, low income assistance for weatherization, renewable commitment, smart grid and etc?

    16. Finally (for this e-mail), be aware that when customers of NWE leave the system, it RAISES costs for all who remain behind. Quite contrary to the claim of ECP that volume of electricity sold does not matter to NWE, it does. It does and it matters to ever NWE customer because part of revenue recovering mechanism used to pay NWE for its poles and wires is the volume of electricity consumed. When less electricity is consumed because people leave to go to ECP, those remaining behind will pay more. In the short term Missoula city and schools may see some savings, but in the long run everyone else on NWE will pay more. And, most likely, 30 year committed ECP customers will pay more in the long run, too.

  21. noodly appendage

    If it’s ok, I’m going to forward this to the Bozeman city commission. They’ve now been asked too.

    Ochenski? Ole Brakeman Bob? Is it ok?

  22. noodly appendage

    PS. When government makes a mistake, who picks up the tab and how is that different from a publicly owned utility. That dog won’t hunt. Either publicly owned is good, or we’ve got a lot of sewer and water and other municipal utilities that need to be privatized.

  23. Larry Kralj, Environmental Rangers!

    Nerdly, you’re just SO original! No, I mean that. Seriously. “that dog won’t hunt”. You know, that’s the very first time I’ve ever heard that! Did you think that up by your lonesome? But here, try this one. Will capitalism ever die? No, because socialism will always rescue it. See savings and loan scandal, and now the housing scandal.

  24. ochenski

    Noodly –

    Been up slaughtering Lake Superior Whitefish in Flathead Lake, so sorry for slow response to your question. But of course it’s OK to forward anything I post here to Bozeman officials so, hopefully, we can put this Highwood Plant down for good.

    As far as the question about who pays for public agency errors, good old Flathead Lake is a great example. The Fish, Wildlife & Parks guys thought dumping mysis shrimp into the lake was a great idea that would produce larger kokanee salmon, so they simply went ahead and did it. As most folks probably know, the shrimp and salmon pass each other once a day going up or down in the lake and the shrimp eat the same food as the young salmon. The result? They wiped out the salmon in Flathead Lake. No more big runs upriver into Glacier with hundreds of bald eagles because no more salmon. What effect did this have on tourism and the local food source for people and animals? A loss of millions of dollars every year in perpetuity. Had a private entity dumped those shrimp in the lake, the lawsuits would still be on-going with who knows how much in damages. But FWP did it and not a single individual was fired, not a single penny paid, and they even try to simply not talk about it, hoping eventually people will forget that there ever was a healthy, self-reproducing kokanee population in the lake. Noodly isn’t wrong on this — there’s almost no accountability from government entities for their mistakes and we, the taxpayers, always wind up picking up the tab (hmm, Iraq comes to mind). Privatizing, however, has some of it’s own drawbacks such as we’ve seen with the Pegasus Gold and Zortmann-Landusky mines — they can simply disappear into bankruptcy leaving us with the tab for cleanups.

    One good thing, though, Mayor Engen saw the light on this one and deserves some praise for reversing course before the citizens of Mizoo got saddled with some real long-term debt — both fiscal and environmental. Good for 4&20 for hosting this little discussion and everything it revealed.

  1. 1 Fire update: clean air in Missoua…for now « 4&20 blackbirds

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