Testimony on Senate Bill 243

Testimony of Gov. JUDY MARTZ at the hearing on Senate Bill 243
3:00 p.m., State Capitol
January 16, 2001

Thank you, Mr. Chairman and members of the committee. I appreciate the opportunity to come before you today to personally testify on a topic that deeply concerns and affects every person in Montana.

It is appropriate that my first appearance before a legislative committee as governor concerns an issue that is fundamental to our quality of life. It is the issue of energy.

We know that electricity is the lifeblood of business and industry. Without it, few businesses can exist, let alone grow. When prices double or even triple suddenly-- well, it might as well NOT exist because it is unaffordable.

Every Montana family depends on a consistent source of power to heat their homes, light their way and provide the simple conveniences of a modern world for their daily lives.

I am here today to fight for and protect the interests of our sovereign state and its citizens. I am here today to share with you the fundamental issues that I believe must be addressed in Senate Bill 243. No matter what happens to it between now and the day it arrives on my desk, these issues must be included and satisfactorily addressed within it.

I want to take this opportunity to compliment Senator Royal Johnson for sponsoring Senate Bill 243. His leadership in bringing this bill before the legislature early in the session will allow us the vehicle and the time to carefully prepare an effective strategy to address our energy concerns, not just for the short term, but also for our needs well into the future.

I am keenly aware that in recent months Montanans have experienced price increases in natural gas and our traditionally inexpensive electricity, beyond our ability to afford.

And even while our demand on these resources during the winter months increases as it usually does, we are becoming increasingly aware of a fresh demand for our energy supplies from beyond our border.

Other states with deeper pockets and greater populations are successfully bribing our energy away, and will continue, if we allow it. We must not leave our citizens, our families and our businesses unprotected and empty handed for the sake of those who may outbid us.

Profit is a good thing, but not to the extent that it would leave the state that produced it in the dark or out in the cold.

Montana produces more than enough electricity to meet its own demands. Montana’s needs should and must be met before sales to the highest bidder outside our borders are considered.

This is a problem that pervades the entire western wholesale market and it cannot be solved without a coordinated regional plan. Acting otherwise will simply make the problem worse for every state in this region.

I have joined with other governors of the West in calling for the creation of an interstate, interagency working group to develop a regional plan to satisfy our collective needs.

All of us on the western grid need to participate. We must share the responsibility of building more generation plants with adequate fuel supply, electrical transmission facilities, gas pipelines, and deal with the inherent environmental challenges that presents.

Every western state must commit to an efficient and balanced system where energy may flow between states and not simply one direction, AWAY from Montana.

I have appointed today a task force on energy prices, made up of Montanans who are experts in their respective fields and who represent the broad array of energy producers and consumers, cooperatives and suppliers.

They will advise our administration on energy policy and make recommendations on short-term and long-term solutions to issues concerning the price of electricity paid by Montana citizens.

The names of this task force will be available to you, along with my testimony before you today at the conclusion of my remarks.

The long term solution is to increase the supply of power through more generating facilities.

We should diversify, wherever possible, our sources of fuel. For example: natural gas, coal, and renewable resources such as wind and solar.

The State should look for ways to streamline the permitting process, allowing facilities within a more reasonable time frame, but also within the parameters of our existing environmental standards.

Let me say these words carefully so that no one overlooks a portion of my statement: We CAN become more efficient WITHIN our existing environmental laws.

The Major Facility Siting law process time can and should be faster, as should the processing of permits under the Montana Environmental Policy Act.

The 1997 Legislature demonstrated leadership and foresight by protecting Montana consumers from price changes until July 1, 2002.

Other states in our region that did not do so are experiencing what our legislature protected us from.

Still, the law should be changed 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.

The Public Service Commission should name the supplier of electricity for small and residential customers.

The PSC should adopt rules necessary for that supplier or suppliers to contract for power with power generators; and the law should be amended to 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.

In the near-term (from now until July 1, 2002), the industrial customers and the generators of electricity should enter into contracts for power supply, perhaps with incentives from the PSC or the State.

The price of electricity will increase after July 1, 2002, but it should only increase to a reasonable amount.

Suppliers should recover their costs, plus a reasonable profit. The California prices of today are not being set by a competitive marketplace and are unrealistic.

The California prices are not a result of long-term supply contracts, but are set on a daily spot market.

Competition will work, but we cannot be halfway in and halfway out. A viable federal energy policy is needed. The states, especially in the West, need to work together to solve the supply and price issues.

Thank you for your time and attention today. I believe it was imperative that I share my expectations with you as you begin to review this legislation and address one of the most important challenges of this legislative session.

I look forward to working with you on this and many other important matters in the coming days and weeks of this, the 57th Legislative Assembly.

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