Just like a stopped clock that gets the time correct twice a day, PSC Commissioner Roger Koopman’s critique (Jan. 20 Beacon: “Federally Imposed Renewables Come at a Cost”) of my earlier column on the Montana response to the EPA Clean Power Rules had one thing right – I do like hamburgers, preferably made with Montana beef. Otherwise, the representations he makes in his column indicate he didn’t even read my column, much less examine the data available at the Public Service Commission upon which I based my column.
Readers can be excused for being confused when a current member and a former member of the Montana Public Service Commission offer two perspectives on the electricity consumer consequences of the federal EPA clean air rules. I based the observations in my column on the data available at the Public Service Commission where I served as your full-time PSC Commissioner for eight years.
Despite Commissioner Koopman’s assertion to the contrary, I never claimed that the EPA rules would not have any rate consequence to consumers. I did dispute the assertion from Americans for Prosperity that utility rates would inevitably increase to unbearable levels with a reduced reliance on coal-fired generation. I used as my evidence the experience with the costs of the resources in NorthWestern Energy’s portfolio. I stand by my numbers.
While some fuels, like coal, wind, and water are relatively inexpensive, even free, the price of any electricity from those resources is dependent on the capital costs of those generation facilities. Those capital costs can be enormous, either for a new build or when the property changes hands, because both investments can be huge. It is when those transactions are capitalized, amortized and paid for over time by the consumer that utility rates are affected. Two different coal-fired plants with the same capacity, built at different locations and times, can have vastly different cost bases. The same would be true of two different wind-powered generators. Each proposal has to be judged on a case-by-case basis to derive the effect on consumers. The premise of my original column was that there are no “rule of thumb” answers to the very complex and complicated business of electricity generation, and the subsequent costs that get passed along to the consumer.
I clearly acknowledged that the EPA rules present challenges for the people of our state. What I did express confidence in, however, is the ability of Montanans to tackle the problem and come up with solutions that will not necessarily raise rates to customers nor reduce employment opportunities. It is unfortunate that Commissioner Koopman has so little faith in the talents and skills of our science, engineering, and business leaders in this state.
Greg Jergeson served for eight years on the Montana Public Service Commission, six as chair. He also served in the State Senate for 24 years.