Montana’s Public Service Commission

The Montana Public Service Commission’s decisions affect every Montanan who pays a utility bill.

Three of the five seats on the MPSC are up for reelection, including the district that represents Madison County. Commissioner Rodger Koopman of District Three will term out of the seat in 2021. The election race is between Dillon attorney Jim Brown as the Republican candidate and Montana State University physics professor and representative in the Montana Legislature Tom Woods as the Democratic candidate. MPSC regulates utility rates for Montana.

“When we’re dealing with utility monopolies, we’re not dealing with free market competitive enterprises,” Koopman said. “It’s up to the PSC to come up with creative ways of sort of mimicking competition.”

Both candidates for MPSC’s District Three seat speak of change in the commission. The decision on the rate-case lawsuit against the commission and NorthWestern Energy in 2019 echo many of the changes Brown and Woods want to make in the commission. Brown outlined his campaign goals on his website.

“I can remember a time when Montana had some of the lowest power rates in the nation,” Brown said. “Now, Montanans pay some of the highest power rates in the nation. This is the result of poor government decision-making and poor long-term energy planning.”

The nature of the commission is non-partisan. But in the recent court battle, MPSC justified excluding carbon dioxide emissions costs in NorthWestern Energy’s avoided costs due to foreseen relaxed regulations on carbon emission because of a change in “political forces.” The court ruled that MPSC’s justification did not satisfy its own precedent of a “clear and forecastable adjustment.”

MPSC is guided on the principles of the federal Public Utility Regulatory Policies Act which requires large electric utilities to purchase contracts with energy from small power production qualifying facilities that encourage renewable energy development while providing reasonable rates for consumers.

MPSC and NorthWestern Energy appealed an April 2, 2019 decision in Montana’s Eighth Judicial District Court. On Aug. 24, 2020, the Montana Supreme Court supported the District Court’s ruling that MPSC violated PURPA and Montana law when it arbitrarily and illegally reduced standard-offer rates for small solar qualifying facilities with 3 megawatts or less of sustained capacity.

The court also affirmed the ruling that the MPSC misapplied a novel methodology in determining avoided costs. The courts agreed that MPSC’s reduced maximum contract lengths to 10 years did not encourage nor enhance the development of small solar qualifying facilities as required in PURPA.

According to the PSC press release, the commission filed a petition to readdress the sufficiency of MPSC’s record for rehearing Sept. 8.

“The way that we do business now is holding us back and that’s what I want to change,” Woods said. “The ratepayers pay the utility based on what the utility owes, not on so much what they do. That has created an incentive for the companies to buy the most expensive generation that they can or to inflate the value of it and that’s what they’ve done.

MPSC went against its staff recommendations for contract lengths and calculating carbon emissions in NorthWestern Energy’s avoided costs, according to court documents. The commission charged with being informed Montana’s energy layout is staffed with about 35 employees, who provide objective facts on Montana’s energy.

“A commissioner needs to have a fierce interest in learning and open mindedness and willingness to accept new ideas,” Koopman said. “If you don’t have that, you know what? Politics rule the day. In politics, the idea is that you choose sides, you stop thinking and start conforming.”