Firefly, I do not know whether this information will help clarify the puzzle for you or not, but let me add something to the discussion.
While I am not privy to the details of the city's plans, some of my own concerns regarding the plant have yielded some insight into the issue of the city providing power to the citizens of Great Falls.
Under current law, cities can not sell power to its citizens nor become the default supplier for their jurisdiction without the approval and long term regulation of the Public Service Commission. Last year the city request permission from the PSC to create a test group of twenty private residences to whom they could sell power.
Previously they had obtained permission from the PSC become a commercial reseller of power through the Electric City Power entity. Through ECP, they currently sell power to these 20 residences and a number of public entities including the City of Great Falls and the Great Falls School District. They obtain this power via a contract with SME which in turn gets its power from the Bonneville Power Administration and the open market if needed.
Clearly, the city is pursuing a strategy of becoming the default supplier of electricity for the citizens of Great Falls. To accomplish this, they can either petition the PSC to expand the test group from 20 to all residences or they can attempt to change the law.
If they went to the PSC and were allowed to expand, they would remain regulated by the PSC just like Northwest Energy. On the other hand if they are successful in getting HB 346 passed; they can become the default supplier to all city residents and will be self regulating (no PSC oversight). House Bill 346 was introduced by Rep. Deb Kottel and is awaiting action in the Federal Relations, Energy and Telecommunications Committee of the Montana House. No hearing date is yet scheduled.
The short answer is they want to sell you power, but can not legally do so at this time. The next logical question for you to ask yourself is do you want to be forced to buy your power from the city?
My concerns revolve around the lack of PSC oversight for the citizens of Great Falls should HB 346 pass and the impact on citizens who live outside of the city limits should the City become the default supplier for it's residents.
Currently the regulated pricing from Northwest Energy is based on a buying pool including the 60,000 residents of Great Falls. Removing those 60,000 from the pool may have a significant impact on those remaining in the pool.
That is another unanswered question among many. To be fair, that is not an issue the city commission has to address, but as a County Commissioner, I need to balance the concerns of both City and rural residents.
The city's entry into the power business is a very large issue which has lasting impact on all of us. It has both the potential of providing long term low energy rates or being a financial disaster.
Joe
Always a pleasure to see you here, and I appreciate the input.
I have discovered the same things regarding this situation as you have. My greatest concern is your last paragraph. It is a huge issue.
The City's teter totter stance on selling to the citizens scares me.
This is why several of us wish ECP to be more forthcoming with things relevant to this discussion. Hopefully that has been worked out.
Joe,
Is there some reason the city can't have residential customers signup voluntarily with the city? This of course assumes the city can sell at a rate better than the default supply rate. Wouldn’t this be how deregulation was suppose to work? This would provide PPL incentive to bargain when selling NWenergy power or they might lose households to the cooperative. Why sell only to GF citizens for below market rates which reduces incentive to conserve. Sell it at market rates, using profits to implement GF conservation programs (a kilowatt-hour saved is one we can sell thus doubling the benefit to GF) and reduce property taxes with any profit left over.
Whoops. Instead of "Great Falls, entire plan," the foregoing should read: "Great Falls' entire plan"
Sorry 'bout that.
Wolfpack:
Electric City Power can ask the PSC for permission to sell to any residential customers in the state and compete in the market as you suggest. I suspect that request would be looked on favorably. Indeed this is the way deregulation was supposed to work. Deregulation was based on the idea we would each have several options to choose from in selecting our power supplier. Further it was assumed that most people would make the choice of an alternate source and only a few residences would be supplied by the "default supplier". Obviously this has never happened.
Ironically, one of the justifications I have been given for the City's creation of ECP and their effort to secure a portion of the power from the HGS project was to create a competitive market in which choice would become a reality. This is however, not what the city has requested permission to do. Thus far they have asked for to be the default supplier i.e. the monopoly supplier to all of the residents of Great Falls. In the legislation Rep. Deb Kottel is carrying for them, they go one step further and want to be the default supplier and exempt from PSC regulation. This request, for the reasons I previously mentioned is meeting with a great deal of resistance.
I do not know this for certain, but I believe the city is concerned about being able to issue the $125,000,000 in revenue bonds needed for their portion of the HGS project without having a guaranteed revenue base to back them up. This is likely why the city is pursuing becoming the default supplier, it is the only way to make the bond financing possible.
In regard to your thoughts about ECP turning a profit on the sales and using it to fund conservation measures, that is a great thought if it pencils out. It would accomplish two desirable goals at once.
If they were a PSC regulated seller all of their rates would have to be approved by the PSC regardless of whether they were set at a profit, break even or loss. If they are successful in positioning themselves as the default supplier without the regulation of the PSC, they can set any rate they wish. In either case, how they used the profits, if any, would be up to the board of electric city power.
I guess the Administrator deleted my post, which I will repeat:
Commissioner Briggs, if the City of Great Falls intends to try to require residents to purchase our power from ECP and HGS, why in the world would Coleen Balzarini write a guest opinion stating that the City "has not made a final decision" whether it will approach the legislature seeking the right to sell to residents? Isn't that pretty disingenuous for a public official?
GeeGuy,
I prefer to give people the benefit of the doubt so perhaps the decision had not yet been made when the editorial was written.
All I can tell you for certain is that Deb Kottel's bill (HB 346) which if passed would allow the city to become the default supplier was introduced for 1st reading on January 16,2007.
Joe
Donna, I lived in Kentucky and the entire state has a high mercury warning on all fish. You couldn't eat a fish if your life depended on it. That is what will happen to the Missouri Rv. L
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