Only 11 states elect the people who regulate monopoly utilities. Montana legislator Brad Hamlett would like lawmakers to consider lowering the number to 10, questioning whether the state's voter-selected Public Service Commission has the expertise for the job.
“You can appoint commissioners with legal, engineering, accounting, administrative experience,” Rep. Hamlett, D-Great Falls, told the House Energy, Telecommunications and Federal Relations Committee on Wednesday. “The question that needs to be asked, I think, and answered: ‘Is the five-member PSC, are they adapting to the breadth of knowledge and experience necessary to help the Montana consumer, and are we as a Legislature keeping on tabs with this?’”
Montana’s five-member Public Service Commission was created by the Legislature to balance a monopoly utility’s right to a fixed return on investment with consumers’ right to a reasonable price and reliable service. Commissioners are selected by region.
There’s been no shortage of legislative bills affecting the PSC this session. There have been bills, seven total, to cut the commission’s six-figure salaries, change the number of commissioners, redraw commission districts, and limit the PSC’s authority to regulate utilities, to name a few. The most high-profile legislation, Senate Bill 331, would prevent the PSC from scrutinizing a plan to charge NorthWestern Energy customers $75 million related to the utility choosing to increase its share of Colstrip Power Plant.
Hamlett is asking the Legislature to study a move to an appointed commission, with no commitment to change the law at this time. Additionally, he said the Legislature should consider adjusting the size of the current districts, which haven’t been reviewed since the 2000 Census. The goal 19 years ago was to make sure each district was within 3 percentage points of an average population number, assuring that every Montanan was equally represented on the commission. At that point, the districts hadn’t been balanced in more than 30 years, Hamlett said.
In the two decades since 2000, the districts are no longer even. A 2013 legislative study showed that with the most populous districts were 8 percent over populated by 2010. Representation has become only more lopsided since, as counties like Gallatin continue to add residents by the thousands.
Commissioner Randy Pinocci, of Sun River, advised against appointed commissioners.
“If the governor was to appoint the position, I think that a public service commissioner would call the governor and say ‘hey, how do you want me to vote today?’’ Pinocci said. “More than he’d be listening to what the district’s needs are, or what the district may have special concerns with.”
Governors don’t select utility commissioners in every state where commissioners are appointed. In some states, like Idaho, Republican legislators pick two commissioners and Democratic legislators pick two to maintain political balance in regulating utilities.
Appointed regulators would be a change for Montana’s largest monopoly utility, South Dakota-based NorthWestern Energy. In a March 20 presentation at the Williams Capital West Coast Utilities Conference, NorthWestern identified its regulators in Montana, Nebraska and South Dakota as elected. Of those 14 elected regulators, one is a Democrat, the rest Republican.
Jeff Fox of Renewable Energy Northwest told the committee that appointed commissioners would depoliticize the process and require expertise of commissioners, who currently have no credentialed requirement in Montana.
“Energy should not be a political issue, should not be a partisan issue,” Fox said. “The needs of the grid and for a well-regulated utility environment really are an issue where a high degree of expertise is necessary. I think there are ways to ensure that the Public Service Commission is responsive to constituent needs and to various geographic districts.”
The committee took no action on Hamlett’s proposal.