Grid Grift
Nobody understands the blather Northwestern Energy is spouting to explain its plans for Colstrip, a subsidiary, customer credits, and … perhaps … bivationary falvebarms.
Here We Go Again
This editorial was sent to newspapers across Montana.
What is it about top executives in monopoly utilities that makes them want to play cowboy capitalists? Case in point is NorthWestern Energy’s plan to provide power to gigantic data centers. With great ballyhoo across the state, NorthWestern Energy announced it signed a “letter of intent” to provide as much as 1,000 megawatts of electricity to Quantica Infrastructure for its proposed data center. That’s more than their current total electric load of 760 megawatts. That amount of power would use all of NorthWestern’s existing generation capacity.
You would think that this monopoly business and its top brass would be satisfied with its current situation. In exchange for providing power to its current customer base (that’s us), they receive a virtual guarantee they will not lose their investment for any reason. They also get a guaranteed rate of return on their investments that hovers around 10%. That is for the entire life of the facility regardless of economic conditions or competition.
In exchange for running this sleepy little monopoly, which is headquartered in Sioux Falls, South Dakota, their current CEO, Brian Bird, received $4.8 million in 2024. The 2023 corporate proxy statement lists Board Chair Linda Sullivan receiving an annual retainer of $150,000 plus 3,750 shares of stock. Current price per share is around $55. For comparison, the manager of Flathead Electric Cooperative, the largest public power provider in Montana, receives just under $550,000 per year.
But now NorthWestern wants to take on a lot of risk building new facilities and making investments betting on the latest fashion trend to come down the pike: data centers. And if they miss their bet, we all suffer the consequences. Maybe the business booster crowd needs a history lesson.
In 1971, the Bureau of Reclamation released the North Central Power Study. The plan called for massive coal development on the northern plains. In Montana alone, they envisioned 17 coal plants roughly the size of the Colstrip plants. Of course, the Montana Power Company (NorthWestern Energy’s predecessor) and other corporate interests in Montana were all for it. For them, the environmental degradation and negative impact on existing ag producers and others were worth the cost.
But ranchers, Native tribes, and many others were not convinced. They organized to oppose the massive development being proposed by the coal and utility industries. In the end, only four plants were built and owned by a consortium of utilities. It also spawned two of the most powerful citizen groups in the state: The Montana Environmental Information Center and Northern Plains Resource Council. To this day, they remain actively engaged in protecting Montana’s people and environment from corporate interests seeking a quick dollar.
Fast forward to 1997 and the electric deregulation fiasco. Management of the Montana Power Company became bored with the stodgy old regulated utility business. So they decided to sell off the power plants and power lines they owned. They took all of that money and dumped it into Touch America, a fledgling telecommunications company. In short order, Touch America went bankrupt and all of that money evaporated. Montana suffered through years of economic chaos. We went from some of the lowest customer rates in the country to some of the highest rates in the Northwest. NorthWestern is now proposing significant rate increases on a regular basis, while still trying to acquire worn out, expensive coal plants in the Colstrip complex.
In the emerging world of huge data centers serving everything from artificial intelligence to cryptocurrency ponzi schemes, NorthWestern sees a new shiny object on the horizon: huge electric loads required by data centers. Unfortunately, this confronts us when the national government is run by delusional ideologues. Here in Montana, billionaire tech moguls and far-right legislators are running state government. The Public Service Commission, which should be protecting us from the greed of corporate CEOs, looks more like the clown show in a three-ring circus.
Strap in and hold onto your wallets, folks. It’s gonna be a wild ride.
Ken Toole served on the Public Service Commission from 2007 to 2011. He was a member of the Senate Energy and Telecommunications Committee, serving as its chairman in 2005. He served as the vice chair of the Senate Taxation Committee in 2005. He was also the President of The Policy Institute, a private group which conducted research on economic issues including energy and taxation.
The Clown Car at The PSC Rolls On
Legislative Auditors have once again examined the Public Service Commission and, once again, they don’t like what they see. Specifically, the audit found that only 23% of employees at the PSC believed that commissioners behaved with high ethical standards. The auditors found that the shenanigans of various commissioners and consistent promotion of fossil fuels over the last few years have undermined public trust in PSC decision making. Here’s a brief recap of some of the actions of commissioners which led to another bad audit report.
- Commissioner Randy Pinocci was arrested for witness tampering in a private matter. He is currently awaiting trial.
- Commissioners Randy Pinocci and Tony O’Donnell issued a press release saying that there was a frighteningly real possibility of black outs in eastern Montana and called on the legislature to save the coal plants in southeastern Montana. Montana Dakota Utilities said the release was “completely unfounded.”
- Commissioner Jennifer Fielder threatened medical providers in Helena with “political consequences” for refusing to administer a nonclinical remedy for COVID-19.
- Commissioner Randy Pinocci publicly suggested that the City of Missoula be targeted for black outs because he said they do not support coal development.
- Commissioners routinely advocate for coal power even though they are responsible to objectively examine various resources and mechanisms for meeting power needs.
Commission Chairman, James Brown (who just announced he is running for State Auditor https://wtf406.com/2024/01/public-service-commission-chairman-running-for-state-auditor/ ) objected to much of the audit report saying that some steps have been taken to address some of the issues. But clearly many issues remain unresolved.
Public Service Commission Chairman Running for State Auditor
Public Service Commission Chair, James Brown, announced that he is running for State Auditor in the 2024 election cycle. Last cycle he ran unsuccessfully for the Supreme Court in one of the sleaziest campaigns in recent memory. In that race, Brown was dogged by allegations that he repeatedly violated the rules prohibiting partisan endorsements in judicial races. https://montanafreepress.org/2022/05/25/republican-support-stacks-up-in-montana-supreme-court-race/
The court race was not the first time Brown played fast and loose with campaign law. When he ran for PSC in 2020, there were questions raised about his claiming residence in Dillon. Specifically, Brown owned a home and operated a law practice in Helena, which is outside his PSC district. But in his candidate filing, he used a Dillon post office box. In Brown’s candidate filing, he lists a Dillon post office box as his mailing address. In his corporate filing for his law practice, he wrote that his home address was in Helena. He argued that he lived in a house in Dillon with his cousin. But when asked how much time he spent in Dillon by the Bozeman Daily Chronicle, he refused to answer, saying it was not “relevant.”
https://www.bozemandailychronicle.com/news/complaint-filed-against-psc-candidate-disputing-residency/article_b905ad5d-c43e-56b7-b117-115b300681db.html
After winning election to the PSC and being chosen as PSC chair, Brown was caught up in a scandal regarding audit exceptions found at the PSC by legislative auditors. While the allegations in the audit report occurred before Brown was on the commission, he was called to legislative committee hearings to respond to questions from legislators about what was going on at the PSC. He initially refused to provide the name of a fellow commissioner who had booked a $1,400 first class plane ticket to Washington DC. He later identified the commissioner, former chairman Brad Johnson. (Johnson is currently running for US Senate.) https://montanafreepress.org/2021/06/08/psc-rebuked-for-legislative-audit/
In addition to Brown’s adventures in the electoral arena, he has a long history of activity in the world of dark money in politics. He was the attorney for a group called the Western Tradition Partnership. The activities of this group came to light when a box of documents were found in a meth house in Colorado, which detailed a laundry list of political dirty tricks in Montana and was the subject for a PBS documentary titled Dark Money. Brown also served as the lawyer for the Montana Republican Party from 2009 to 2015. (https://www.pbs.org/pov/films/darkmoney/
For those who think these kinds of things are just politics as usual consider this. Brown was the chair of the Public Service Commission when it approved a 28% rate increase for consumers, siding with NorthWestern Energy over numerous public interest organizations. He now wants the State Auditor’s job regulating the insurance industry in Montana. Elections really do matter.