Energy Development Tops Agenda

By Dennison, Mike

HELENA – For all his talk about energy development in Montana, Gov. Brian Schweitzer isn’t charging into the 2007 Legislature with high-profile proposals to pave the way for big coal, wind-power and other projects.

In fact, the administration’s top development officer says the Legislature and new state policy aren’t that pivotal when it comes to getting such projects off the ground.

“The solutions (for energy projects) aren’t always with the state of Montana,” says Evan Barrett, chief business officer for the state. “The solutions are getting business deals that work.”

Nonetheless, energy development and utility regulation will be a major topic as lawmakers hunker down in Helena for this year’s Legislature. Republican leaders are clamoring for Democrat Schweitzer to deliver on months of talk about energy development, and will use the 90-day legislative session that begins Wednesday as a platform to drill home that message.

“We need to identify those areas of concern, to work with the governor’s office to get that development to happen,” says incoming House Majority Leader Michael Lange, R-Billings.

The Schweitzer administration’s energy proposals, not yet fully formed, will include tax incentives for “clean and green” power development and bills outlining “impact assistance” for counties where big development may occur.

Schweitzer also wants to expand state requirements that utilities buy a minimum amount of power from renewable sources, such as wind and hydro. The requirements apply now to NorthWestern Energy, the state’s major electric utility.

Schweitzer said he’d like to extend the requirements to rural electric co-ops and Montana-Dakota Utilities, the second-largest private electric utility.

Lawmakers also will debate whether to pass some form of “re- regulation” of NorthWestern Energy. Supporters of the movewant to make it easier for NorthWestern to own power plants again, saying it would lead to stable, affordable power rates.

They’ll face skepticism from those who suspect NorthWestern may be more interested in padding its profits than in helping consumers.

“We’re talking big, big numbers – billions of dollars,” said Sen. Greg Lind, D-Missoula, who chairs the Senate committee that will examine scores of energy hills. Lind said his priority is ensuring that Montana utility ratepayers don’t get stuck with unnecessary costs.

In the past several years, the double-edged sword of energy has become impossible to ignore in Montana.

Soaring prices have hi consumers, both at the fuel pump and in their home. But those same high prices, have led to a boom in oil, natural gas, and possibly wind and coal, helping boost the state’s economy, fill its treasury, and offer the promise of more development.

Schweitzer has been talking up this potential development, including a focus on “clean coal” and alternative energy development in rural eastern Montana, parts of which are starved for economic activity.

Toward that end, the Schweitzer administration will propose property-tax incentives for infrastructure that will help transport “clean and green” power.

Barrett says the incentives will apply to items such as transmission lines that can move wind power inside or outside the state, or pipelines that help enable cleanerburning coal power plants or coal-to-liquid refineries.

“You can’t make these projects work without the delivery vehicle,” he says.

The administration also is working on proposals to help rural counties deal with the impacts of large-scale development of oil, gas, coal or other energy sources.

As of last week, the details on these proposals had yet to be nailed down. Republicans, eager to work with the governor on energy plans, are getting antsy.

“We’re waiting out there to see what he’s going to come forward with,” said Senate Minority Leader Corey Stapleton, R-Billings. I think we have a real important role to play. What will define whether (Schweitzer) does anything meaningful as governor is whether he delivers on this energy policy.”

Schweitzer, however, says he’s in no rush to give a blank check to energy developers. The state has great energy resources that are in strong demand, and private developers are the ones who must put up the money, take the risk and shoulder some of the impacts for major projects, he said.

“We’re going to give incentives on infrastructure that is built for clean and green … (but) they don’t get a penny until they invest,” Schweitzer said.

Lange, meanwhile, is working on his own bill, which be says will identify and attempt to erase “the true obstacles in each path of (energy) development.”

“We heard talk two years ago about ethanol plants; we don’t have any,” he said. “We heard talk two years ago about biodiesel. … If there is a problem out there, we need to find out exactly what that is and get it in a bill to address it.”

Rep. Alan Olson, R-Roundup, who chairs the House Federal Relations, Energy and Telecommunications Committee, also has some ideas on energy development and utilities.

He’d like to establish a state “transmission authority” to help coordinate construction of power lines, pipelines or other infrastructure he says is essential to energy development.

“We have a tremendous amount of potential in windpower generation,” Olson said. “We can’t use (all) that power in Montana. We need to sit down and figure out how to get it out of here.”

But Olson’s top priority is allowing NorthWestern Energy to own regulated power plants – a reversal, somewhat, of Montana’s 10-year- old policy of deregulating its major utility.

The utility will be strengthened, consumers will get reliable power and new plants could be built in Montana, he said.

Yet this move also would include the controversial policy of regulatory “pre-approval” of power projects built by the utility. Critics say this form of regulation shifts the risk of building a new plant almost entirely onto the backs of utility ratepayers.

On both of Olson’s proposals, the Schweitzer administration is largely noncommittal, saying it will take a look. Yet like many Republicans working on energy policy, Olson is optimistic for now.

“I don’t think I’m going to have any big problems working with the governor,” he said. “We’ll get something going.”

Copyright The Missoulian Jan 02, 2007

(c) 2007 Missoulian. Provided by ProQuest Information and Learning. All rights Reserved.