Speeches

Remarks of Gov. JUDY MARTZ
2001 Legislative Session Energy Wrap-up Press Conference
Capitol / Helena, MT / 1:30 pm
April 21, 2001

CHECK AGAINST DELIVERY

The Martz-Ohs administration and legislators have worked together for market-based solutions and have provided the State of Montana the tools, with the force of law behind them, to engage in and promote public/private partnerships to develop affordable, reliable energy for the State of Montana.

We are going to work with job creators and energy suppliers to do whatever it takes to get enough affordable energy to our residents and our businesses.

We have had a successful session because we started with a plan. We are pleased that many pieces of legislation are serving a valuable purpose in persuading private entities to come forward with reasonable proposals and prices well below market and more realistic for Montana consumers.

Several significant pieces of the energy puzzle are in place. We’ll keep after it until we’ve got the full picture. I’m proud to report that thanks to the legislature, we’re better than half way there.

When this session began, I testified before the Senate Energy Committee to tell legislators that our plan must contain, at a minimum, the following elements:

1) The ability to diversify, wherever possible, our sources of fuel. For example: natural gas, coal, and renewable resources such as wind and solar.

We’re getting the job done. We’re working to obtain our rightful ownership of the mineral rights in Otter Creek Tracts 1, 2 and 3 for the super-compliant coal.

We’re developing as quickly as we can a viable and systematic plan for the development of coal bed methane.

We’re working with the Bush Administration to inventory our resources to determine all possible sources to fuel our thirsty nation’s need for fuels.

And the legislature has included a power authority in HB 474 that will serve as an important tool to help us make sure that affordable energy is a key component in our economic growth plans.

2) I said our plan needed to streamline the permitting process, allowing facilities within a more reasonable time frame, but also within the parameters of our existing environmental standards.

We’re getting the job done. We’ve streamlined and modernized MEPA, while protecting our environment. Thanks to outstanding legislators like Cindy Younkin, Dave Kasten, Duane Grimes, Bea McCarthy, and Doug Mood we’re going to move Montana forward.

We’ve streamlined and modernized the Major Facilities Citing Act thanks to the outstanding leadership of Mack Cole to help job creators move more quickly to site, build and get generation facilities on line.

3) I said that our plan needed to extend the transition period for customer choice for the time necessary to obtain the best power price for customers and give investors the time to build new facilities.

We got the job done. Thanks to my dear friend Paul Sliter, we’ve written into HB 474 an extension of the transition period - and we’re working aggressively to provide incentives for suppliers to give us reasonable rates on power.

Bill Price helped us with HB 47 to provide assistance for bridge financing for construction.

Mack Cole worked hard to pass SB 508 to provide the critical tax holiday for new generation.

Carol Juneau helped us with HB 643 to provide tax exemption to build wind energy facilities.

We’re moving folks.

4) I said that our plan must allow large customers who have entered the competitive marketplace to return to the default supplier on a one-time basis for the duration of the supply contract.

Again, thanks to the leadership of Paul Sliter, we got the job done. That provision is right there in HB 474.

5) I said that our plan must help industrial customers who went to choice and the generators of electricity to enter into contracts for power supply, perhaps with incentives from the PSC or the State.

You guessed it. We now have the tools to get the job done.

Jeff Mangan helped pass the legislation to create a power pool for both conserved energy and reasonably priced energy. We asked PPL to make the first donation and they did with 20 Megawatts at $35 for 15 months. Once the PSC has the structure in place, we’ll aggressively seek other suppliers to make contributions to the pool.

We are working with Northwestern Corporation to develop 240 Megawatts of capacity that will help our industrials. We hope to have the first 80 on line by October, and the rest by October of next year.

Ken Miller made his contribution to the puzzle by helping us pass SB 398 to authorize temporary generation facilities. This legislation gives us the tools we need to help our job creators get their employees back to work.

6) I said that our plan must have just and reasonable cost recovery for utilities.

And thanks to Paul Sliter we’ll avoid a California situation in Montana because of the language he helped us get into HB 474 to make sure we don’t bankrupt the very people who deliver power to our homes.

7) And finally, I said that our plan must encourage the Bush Administration to develop and implement a viable federal energy policy. The states, especially in the West, need to work together to solve the supply and price issues.

We’re moving here too. I was one of 4 governors who have testified before both the United States House and Senate on the critical need for a national energy policy.

I’ve talked with Curt Hebert, Chairman of FERC, on the critical need to involve the governors and the Western States in the development of our national energy policy.

My staff is providing as much information as possible to Vice President Dick Cheney and his task force charged with the development of a viable energy policy.

I met with experts in Denver several weeks ago to share the perspectives of our state and the unprecedented opportunities we have to contribute to the overall solution to our regional energy crisis.

I’ve met with Gale Norton and told her that we stand ready to help supply the resources of our lands to our nation.

Next month, I’m going with Governor Geringer to Billings to talk about the enormous potential for coal bed methane development in southeastern Montana.

You can see that the legislature addressed every single one of the seven principles of my plan I outlined in the very first days of my administration.

It didn’t happen by accident folks. It happened because we started with a plan. We worked together to obtain the tools for our plan. And as this legislature leaves here, we know that we have the tools we need to implement a market-based strategy to develop more energy supply.

There are critics to be sure. But we are moving. We are going to ensure affordable and reliable power for our citizens.

It is important to note that we still have a lot of work to do. My administration is going to fulfill my promise to improve our economy, and that starts by making sure we have a competitive energy market.

To Montanans I want to say this. This puzzle isn’t entirely put together. And I know how troubling that is. But I want each and every Montanan to understand that I will work day and night with every available resource I can muster to get this puzzle put together as quickly as possible.

To low income Montanans, we’ve extended USBC and we’ll be working to aggressively on the Federal level to expand LIEAP as a tool to get us through tough times.

To farmers and ranchers, especially irrigators, we’re working with BPA and other suppliers to get the assurance to get you through the summer and then have the tools in place to ensure a long term affordable rate for your operations.

To residential customers and small businesses, you are Montana - and we won’t leave you in the dark. We’ll work with both utilities and suppliers to obtain the best possible price in a difficult market conditions. We have a start - but we’re far from there yet.

And to our industrial customers I say that you are fabric of our economy. My number one priority is to get your employees back on the job. We have some of tools, now we have to go to work to secure long term affordable contracts for you. I will be at your side every step of the way to help in any way I can.

Solutions to this complex problem aren’t easy - but with the tools the legislature has given me, with the cooperation of the other states in our region and with the help of the Federal government, we’re going to see Montana through this tough spot.

Thank you, Legislators, for your outstanding work. I appreciate each and every one of you and I want you to know from the bottom of my heart how much I have enjoyed working with you to solve our energy challenges.

I’d now like to let the legislative leaders make any statements they would like before we take questions.

PUTTING THE PIECES TOGETHER INTO AN AFFORDABLE ENERGY PLAN

ENERGY PLAN COMPONENTS

Between now and July 1, 2002, we must aggressively pursue affordable power choices for industrial customers who went to choice.

Create the Demand Exchange/Power Pool. PPL has offered 20 Megawatts immediately at 3.5 cents. Quantity will increase with assignment of conservation, and Northwestern offer-60 Megawatts and BPA power/dollars --- 23 Megawatts (both in October, 2001)

HB 645, by Rep. Jeff Mangan, D-Great Falls, giving the Public Service Commission the authority to create a power pool.

SB 521, by Sen. Steve Doherty, D-Great Falls, revising Governor’s emergency powers to include energy emergencies and, with some changes, to allow PPL power to be assigned to a Power Pool.

PSC quickly develop rules or tariffs on implementing the power pool.

SB 19, by Sen. Mike Halligan, D-Missoula, to delay implementation of full customer choice in electricity supply.

Executive Order. State agencies to reduce consumption by 10%, with an appeal to Montanans to do the same.

Temporary Generation - Estimated potential is up to 125 Megawatt with half of the amount used within the state and other half sold at market price. The generation can be available within 4 months.

SB 398, by Sen. Ken Miller, R-Laurel, to authorize temporary power generating facilities.

HB 600, by Rep. Sylvia Bookout-Reinicke, R-Alberton, to provide a tax exemption for energy generating equipment for a business.

From July 1, 2002 through end of transition period (2007)

Permit default supplier to enter into contracts and provide appropriate cost recovery.

Northwestern will provide 180 Megawatts to default supplier at about 4 cents/Kwh.

HB 47, by Rep. Bill Price, R-Lewistown, providing assistance in construction/bridge financing.

SB 508, by Sen. Mack Cole, R-Forsyth, providing a tax holiday for all types of new generation.

HB 474, by Rep. Paul Sliter, R-Somers, to revise energy laws. Creating a Consumer Energy Fund to provide rate relief for all customers of the default supplier.

Allow permitting to occur concurrently with construction of permanent generation.

This is the period over which Montana can influence the electricity market by developing more supply in Montana and encouraging a reduction in prices because of increased supply.

HB 474, by Rep. Paul Sliter, R-Somers, to revise energy laws.

Consumer Protection:

SB 521, by Sen. Steve Doherty, D-Great Falls, revising Governor’s emergency powers to include energy emergencies and, with some changes, to allow PPL power to be assigned to a Power Pool.

HB 646, by Rep. George Golie, D-Great Falls, to encourage development of generation resources.

SB 319, by Sen. Mack Cole, R-Forsyth, to exempt new electricity generation from Major Facility Siting Act.

HB 474, by Rep. Paul Sliter, R-Somers, to continue development of infrastructure for conservation and renewables and provide low-income assistance. Extend the universal systems benefits charges, which cover costs of low-income energy, weatherization and energy conservation. Extend program period. Maintain participation by all utilities. Provide power authority to continue economic development opportunities.

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