Speeches

Remarks of Governor Judy Martz
Montana Energy Forum
Butte, Montana
June 13, 2001

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Thank you so very much for the opportunity to be here to discuss energy -- the single greatest challenge the Western United States is facing.

I want to thank the sponsors of today's event for putting these issues in the spotlight -- and for doing your part to make certain that we come together as state to solve this problem.

When I asked the people of this state to place their trust in me - I made a commitment that job creation was our first priority.

In addition to transitioning to the "new economy", I remain committed to our traditional economic sectors like resource development, timber harvest, mining and manufacturing.

Each is important to a healthy Montana economy.

All of us in the Western states are struggling to deal with an energy situation that has no easy answers.

While the California crisis has impacted the economic and political environment in the West - it has brought the need for market reforms, conservation, environmental protection and access to our nation's land to supply our thirsty nation's need for fuels.

In every way, this crisis has been a wakeup call - a wakeup call that will allow us to work toward market driven solutions.

If you only hear one thing I say today, hear this: the only energy solution in my book is one that protects Montanans and Montana businesses with affordable power.

As your Governor I don't have the luxury of pointing fingers and assigning blame. I must, and I am, leading Montana through these difficult times.

That is a promise you can take to the bank.

We need a paradigm shift - for behind our challenges are enormous opportunities.

No longer can we talk about the impossible - rather we must talk about all that IS possible.

We are rich in natural resources and fuels that can quench the thirst for energy across our nation.

I know most Montanans are as anxious as I am to contribute to the economic health of our nation through responsible development of our resources.

But there's something we have to do first.

Montanans - and I mean every Montanan - must conserve.

There is no greater way for Montanans to be a part of the solution than to conserve energy. Not only can they reduce their bill - they can improve the environment through conservation.

I have issued an executive order urging state agencies to reduce consumption by a goal of 10%. I humbly ask each and every Montanan to do the same.

Today, I am making an appeal -- and will be doing so in a more formal manner in the near future -- to help every Montanan be a part of the solution.

In the coming days, I will be sending letters to local and county governments to ask them to implement conservation measures designed to achieve reductions of 10%.

I will do the same for schools, hospitals and small businesses.

I am asking every Montanan to help me conserve.

Residential customers can help by turning off lights when not in use, replacing incandescent and halogen bulbs with compact florescent bulbs, reducing shower time, insulating hot water heaters, turning down heaters and air conditioners and weatherizing homes. That is just a start.

Montana Power Company and the Department of Environmental Quality have programs designed to help reduce consumption, and in some cases, pay for it.

We'll partner with them to make conservation our first priority.

For small business customers, it may be possible to implement different operating hours to accomplish more during non-peak times, as well as to implement many similar conservation measures as homeowners.

I'll ask Chamber and NFIB members to do their part.

We are going to implement a comprehensive strategy for a statewide energy reduction of 10%.

It will take every Montana working together to achieve this goal.

Conservation is a habit. It is a habit that will help Montanans keep more of what they earn by holding down power bills, while promoting environmental protection.

I have one word of caution, however. We will not ask Montanans to conserve themselves into danger.

Older Montanans need to protect themselves from heat stroke with adequate cooling devices.

Parents must protect their children by heating homes appropriately.

Safety lights around the perimeter of houses, like at the Governor's residence, should be kept on for safety purposes.

We can all take reasonable steps to reduce consumption by 10% without putting ourselves in physical harm.

Be a part of the solution. Conserve what you can.

As we work to make conservation a habit - we must simultaneously increase power supply.

Our nation's energy supply shortage and inadequate transmission confirm that our history of regulation has camouflaged our actual energy demands under the disguise of price controls.

Without incentives to invest and build generation plants, energy suppliers didn't. In fact, studies suggest that to meet demand the United States must construct nineteen hundred generation facilities over the next twenty years.

We are facing the harsh reality that without adequate generation capacity, power rates will rise.

Recent regional newspaper articles have pointed out that our fully regulated neighbors are seeing increases of anywhere from 40 to 96 percent in Idaho and in some cases 300 percent in Wyoming.

Those increases are on top of gradual power rate increases over the last five years, while Montana Power customers have had their rates frozen since 1997.

Our challenge is to make sure that Montana customers, who are in a partially deregulated marketplace, are better protected than our regulated neighbors.

And therein lies the enormous opportunity for Montana. We can reverse the decades long movement away from the responsible development of our natural resources.

Montana can and must rise to help meet the energy demands of our state and our nation.

We can compete. We can produce. And we can grow our economy in the process.

We have an opportunity to develop and implement a thoughtful national energy policy -- something that was an afterthought to the previous Federal administration.

Indeed, we can reduce our reliance on foreign nations to supply our fuels -- a problem that has led to rising energy costs and power shortages across the nation.

Unfortunately, the previous Administration forced many federal land grabs through in an attempt to create a lasting legacy.

We saw our ability to responsibly develop our resources grind to a halt through federal inaction and mismanagement.

Despite the previous Administration's attempt to protect the west from itself, we now have a White House who will partner with us to meet the demands of a growing nation.

Montana is in the process of receiving the federal mineral rights in super-compliant coal reserves in Southeast Montana.

This area of land known as the Otter Creek tracts is the result of an exchange for the mineral development rights outside Yellowstone National Park.

The high quality coal found in Otter Creek Tracts 1, 2 and 3 will be in great demand in the Midwestern part of our country as power generating facilities struggle to improve air quality as mandated under the Clean Air Act.

The development of these tracts is also bringing increased interest from investors who recognize the need for additional power sources.

I am pleased that Secretary of Interior Gale Norton is working with us. I am hopeful Montana will receive ownership of the 533 million tons of super-compliant coal in these tracts in the near future.

We have already had several inquiries about the potential development of not only the coal, but also coal fired electric generating facilities that will fuel the power needs of Montana and the west.

Along with potential coal development, Montana has vast reserves of a resource only recently acknowledged as a viable energy source -- coal bed methane.

Currently, Montana's Department of Environmental Quality and the BLM are working jointly to assess environmental impacts from proposed development.

Just last week I toured several coal bed methane fields with Wyoming Governor Jim Geringer, who has had tremendous success in the development of natural gas.

We hope to learn from efforts in Wyoming and participate in the bounty of an added energy source and improved economic conditions for rural Montana.

In addition, we have seen increased interest in utilizing traditionally under-valued or no-valued timber byproducts to produce electricity.

This prospect grows increasingly attractive as the United States Forest Service begins to implement The National Fire Plan.

This plan addresses the health of our forests, in part by focusing on mechanical treatment of small trees and shrubs that contribute to catastrophic fires.

With the General Accounting Office identifying over 40 million acres of interior west forestlands at risk for catastrophic fire, we have potential biomass energy resources at our disposal.

Clearly, we have a tremendous amount of energy reserves on our public lands.

From coal to coal bed methane, from natural gas to timber byproduct co-generation, we have the potential to be much more self reliant in energy production.

We just need to re-evaluate the role our public lands can play in supplying this country with the energy it so desperately needs.

And you make no mistake. Montana must capitalize on the enormous potential for alternative energy sources like wind and solar power.

I am very excited that a number of projects are in the discussion and very preliminary planning phases to construct wind generation facilities.

I worked with the tribes and my friend Representative Carol Juneau to pass a bill in the legislature to provide incentives for wind generation on Montana reservations.

My administration will be at the table to provide the assistance and additional incentives investors need to make wind projects a reality.

We must be careful that we do not stifle the increasing interest to develop additional power.

A heavy-handed federal and state government can stymie efforts to address the long-term solution for our current energy problem.

As potential investors visit with me about exciting opportunities for Montana, I have a simple message delivered during each conversation: "Be a partner, don't be a barrier."

While we do not want the federal government to come down on western states with a heavy regulated hand, we do want to work with the federal government to arrive at meaningful solutions.

Let me be crystal clear. By working together we can make the marketplace work the way it is supposed to.

I don't want government in the power business, but I do want government to create an entrepreneurial climate that forces energy generators to be the good corporate citizens I know they can be.

That is why I am pleased with the road the legislature took. They had two options: higher taxes, seizure of private property and price caps - OR - market-based solutions such as competition, expansion of supply and transmission.

The legislature rightly rejected the first approach by defeating a bill that would have placed a 90 percent tax on energy generation. It was unconstitutional and it wouldn't have worked.

They were was also right to reject a bill that would have eroded the Public Service Commission's authority and forced utilities to buy high priced electricity and sell it at low rates.

California tried that - and now they are spending billions of taxpayer dollars to bail out bankrupt utilities, while still paying outrageous power bills. I will never do that to the hardworking taxpayers of Montana.

The legislature made the right choice by choosing a market-based approach. I'm pleased they addressed every one of the principles I outlined in the first days of my administration.

We created a pool of affordable electricity that will be used as a bridge to lower cost power. This pool will come from conservation savings and suppliers. PPL has pledged 20 megawatts and Northwestern is in for 240 megawatts.

We're also implementing a major piece of legislation that protects consumers.

Low and fixed income Montanans will benefit from continued investment in energy assistance through USBC. It names the default supplier, extends customer protections and allows customers to return to the default supply.

It creates a power authority that is critical to our energy plan. We'll name the members of the power authority soon, and we are already developing a strategic plan to issue up to $500 million in revenue bonds to construct or acquire new facilities.

We want 450 megawatts sold near cost to Montanans within several years.

Just as important, this bill keeps the PSC's authority intact.

Some want to bring power companies to their knees with higher taxes and condemnation. I want a different way. I want competition that brings lower prices.

To encourage competition, I'm working on many fronts.

Together with the Bush Administration, other governors and the Federal Energy Regulatory Commission, we're working to implement a viable federal energy policy, upgrade transmission capabilities and inventory every possible fuel source.

As I indicated, we are working to obtain our rightful ownership of the mineral rights in Otter Creek Tracts 1, 2 and 3 for super-compliant coal.

We're drafting a systematic and environmentally sensible plan to develop coal bed methane.

We're developing a statewide initiative to encourage all Montanans to join state agencies to reduce energy use by 10%.

We have assembled an interagency task force to make our permitting and regulatory processes work quickly and to provide technical assistance to the new power authority.

Just as important as supply is transmission.

I was among several western governors who attended a recent forum in Salt Lake City to work together as a region to ensure adequate transmission and distribution facilities.

We're working with Senator Conrad Burns for an inter-tie at Miles City that will allow 200 additional megawatts of power to enter Montana.

I've asked the Western States Coordinating Council about the possibility of an upgrade at Yellowtail to obtain more power from Wyoming.

And we have begun looking at the enormous potential for transmission facilities to get low cost power from Alberta.

With the tools the legislature gave us - we can make great strides toward building a competitive energy market.

Some people want us to blame one another for these challenges. I want us to work together to realize our full potential.

Some people say we cannot solve this problem. They say we have to turn back the clocks.

They are wrong.

Isolating Montana is not the answer. We cannot, we must not, go backward.

To low income Montanans, you must know that we've extended assistance programs and we're working to expand Federal assistance programs to get us through tough times.

To farmers and ranchers, especially irrigators, we're working with BPA and other suppliers to make sure we can 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're continuing to 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.

To our industrial customers - you are the fabric of our economy. My number one priority is to get your employees back on the job. We have some of tools, and every day we're working to secure long-term affordable contracts. I'm at your side every step of the way to help in any way I can.

We will meet our challenges because we rise to the occasion. Ready, willing and able to compete in a free marketplace.

That's the Montana way. That's the only way I know. Today, I ask all Montanans to unite with me to be a part of a Montana-made solution.

Thank you very much for being here - and thank you for the opportunity to share my thoughts with you.

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