The Republican leadership in the Montana Legislature has just announced that Fred Thomas has been named Majority Leader of the state Senate.
When Senator Thomas announced his intended candidacy for returning to the State Senate way back in 2011, he was quoted as saying, “My campaign platform is simple… Let’s learn from recent mistakes. As they say, those who don’t learn from history are doomed to repeat it.” (Bitterroot Star, 11/30/2011). While this is a laudable goal, I wonder if Mr. Thomas has indeed learned the hard lesson meted out by his biggest mistake as a Montana State Senator—sponsoring the disastrous 1997 bill that led to the deregulation and eventual bankruptcy of Montana Power Company’s electric utility business.
This sad episode of poor legislative judgment was again in the news two years ago with the 2014 announcement that Northwestern Energy completed the purchase of the 11 hydroelectric dams (that were already paid for once by Montana ratepayers) back from PPL Montana for a cool $900 million. This purchase meant that Montana electric ratepayers are once again being asked to pay for these dams through their electric power rates. The history of the debacle that was the Montana Power Company deregulation and sale of dams and coal plants is as well-know as it is twisted. By nearly all, it is viewed as perhaps the most poorly considered legislative episode in the history of our state; and there is plenty of competition for that honor.
The number two signatory on the 1997 deregulation bill (SB 390), Sen. John Harp (then R, Kalispell), had recognized by 2004 what a colossal mistake the deregulation bill was. Harp said “I was the number two signatory on the bill…It’s a burden that I’ve carried personally… And I apologize.” Harp went on to state “Montana was sold a bill of goods when it came to deregulation” (Helena Independent Record, 10/27/ 2004).
While Senator Harp requested that the deregulation bill be drafted, it was State Senator Fred Thomas who sponsored the bill in the Montana Senate. In essence, Montana had a golden goose in Montana Power Company that provided our state with plentiful power at the 6th cheapest price in the nation. Mr. Thomas while not acting alone, was the person perhaps most responsible for placing the neck of that golden goose on the chopping block and precipitating a chain of events that led to large increases in electric rates for Montana households and industry, large layoffs due to skyrocketing industrial power rates, and massive losses of investment and retirement savings due to the collapse of Montana Power Co.
Prior to the 1997 deregulation bill, electric power rates in Montana were equal to or substantially below the average rates for the states surrounding Montana (ND, SD, WY, UT, and ID). Following deregulation, Montana electric rates rose above those of our neighboring states. (US Energy Information Association, http://www.eia.gov/electricity/data.cfm#sales ) Based on the difference between the average electrical rates paid by Montana households and businesses and those in our neighboring states, in 2014 Montana power users paid an additional $41 million dollars in power bills compared to the cost of the same amount of electricity in our neighboring states. In fact, since 2001 the additional power costs following deregulation have added nearly $1.8 billion to the power bills of Montana electric users (including commercial and industrial users).
In 1997 Republicans in Montana controlled both chambers of the legislature and the Governor’s office. While a small number of Democrats also voted for deregulation, the 95% of Republican legislators who voted for the bill assured its passage with or without significant Democratic support. This was true even though very vocal opponents of the bill presented very detailed, and (as it turned out) correct arguments against deregulation. However, in 1997 the Republicans were in charge and the presumption was that all government regulations were bad regulations.
Montanans have learned a very hard and costly lesson; one that has cost families and businesses $1.8 billion since deregulation. Now Montanans are being asked to pay again for those dams they paid for once before—another $900 million. We have learned a hard lesson indeed, one that when all is said and done will cost Montana ratepayers well over 2.5 billion dollars. My question is has Mr. Thomas learned that lesson as well?
On cue, Republican leaders in the Montana Legislature are outraged that Governor Bullocks’ proposed 2-year budget has a modest (1.4%) increase over the previous budget and pays for this increase as well as leaving a $300 million dollar rainy day fund. Thomas, choosing to ignore the Governor’s record of fiscal prudence and balanced budgets, dismissed the proposal as having a “gap” between spending and revenues. “I think the missing thing from his budget is, what’s he going to do to fill this gap?” Thomas asked (Denison, MTN News, 11/16/2016).
Senator Thomas’ fiscal concern over a proposed $35 million 2-year increase in the budget seems almost quaint in view of the fact that from 2001-2014 his own bright idea of pushing deregulation has cost Montana households and businesses an average of $138 million per year, not including the cost of buying back the dams we previously owned.
The Montana Power debacle has been written about exhaustively and with more detail and precision than I could ever do. But as a resident of Stevensville, and one of Senator Thomas’ constituents I cannot let the unrepentant actions of Thomas fade from our collective memory. We Montanans still pay the costs of his miscalculation monthly, while Senator Thomas has returned to a position of high power in the legislature.
A number of years ago, following the dissolution of Montana Power, while visiting with my tax accountant and longtime friend for our annual tax meeting, I asked him how things were going. He relayed how the past months had been soul-shattering as he watched his long-time retired clients one after another parade through his office while he counseled them each on how to cope with the loss of all or much of their retirement security after the preventable collapse of their previously rock-solid, low-risk, blue chip investments tied to Montana Power. The experience had left him drained and angry. And so it should have left us all.
I personally feel there are mistakes too big for redemption; mistakes which disqualify one from future positions of power; mistakes which simply require a sincere unconditional apology followed by recusal from public life. With power comes responsibility—at least in my ideal world.