Montanans may take back their dams

Note: this is one of several feature stories in this issue about the 2002 election.

MISSOULA, Mont. - Montana's populist tradition hits the ballot again this November. Voters will decide on Initiative 145, which could lead to a public takeover of every major hydroelectric dam in the state. The goal is to keep electricity rates as low as possible in a state where per capita income is among the nation's lowest.

"It's an opportunity for the populist forces to confront corporate power," says Ken Toole, a state senator and one of the authors of the initiative.

This fits with recent Montana initiatives which banned game farms and new cyanide heap-leach gold mines (HCN, 7/2/01). A popular initiative to toughen water-quality standards was shot down only when mining companies poured big money into advertising against it (HCN, 10/28/96).

The two hydropower companies that are targeted this time condemn I-145 as a brazen trampling of private property rights, and says it's much like a Third World country nationalizing oilfields. "It would send a tremendous negative message to any business interested in investing in Montana," says Tammy Johnson, campaign director for the group opposing the initiative - originally named Energy Producers Against Property Confiscation, now renamed Taxpayers Against I-145.

Despite the new name, 99 percent of the group's funding comes from the power companies, PPL Montana and Avista Corp. The group's $1.3 million has funded a drumbeat of TV and radio ads around the state casting the dam initiative as a bad idea.

The spirit of the initiative goes back a generation in Ken Toole's family. His father, K. Ross Toole, was Montana's leading historian and wrote fiery books opposing corporate power. Ken Toole works as co-director of the Montana Human Rights Network. He hatched I-145 with a few other guys hanging around a Helena brewpub. They call themselves Montanans for Dam Cheap Power, and have raised only $30,000, in small contributions from people around the state.

Even so, as HCN goes to press, polls show Montanans for Dam Cheap Power in the lead: 43 percent of those polled say they'll vote for the initiative, while 31 percent say they'll vote against it. The rest haven't decided yet.

Deregulation doublecross

The showdown began taking shape in 1997, when the Republican-controlled Legislature suspended its own rules to rush through a proposal from Montana Power Co. - a longtime political force - to deregulate the power industry.

"I doubt if any legislators knew what they were voting on at the time," says Toole, who was not in office then. "Deregulation was a classic example of the corporate agenda being shoved down the public's throat."

Deregulation was touted as a way to let Montana's industries and households shop for cheaper power. But Montanans already had some of the lowest electricity rates in the nation. And deregulation turned into a doublecross. Montana Power Co. promptly sold off its dams and other assets to out-of-state companies. Montana Power's executives enjoyed huge bonuses and recreated the company as Touch America, building fiber-optics networks nationwide.

When Montana industries shopped for electricity on the open market, they got nailed by the regional power crisis emanating from California in 2000. Mines, cement plants and other big customers shut down because they couldn't afford electricity, and some haven't yet revived their operations. As dereg is phased in for smaller customers, some households and small businesses have seen their electric bills jump up to 43 percent.

A long-term investment

Passage of I-145 would not ensure that dams become public property. It would form an elected commission to study the feasibility of buying the dams. If the commission decided to buy and the companies refused to sell, the state would condemn the dams and pay fair market value. The state would also compensate counties for lost property taxes. Theoretically, all this would be paid for by floating up to $500 million in revenue bonds.

The dams produce more than half of the electricity needed to power Montana's households and farms, as well as institutions and businesses as large as schools and big-box stores, Toole says. The rest of the power, including what the big industrial customers need, would still have to be bought on the open market.

Putting the dams in public hands will also clear up issues of river access and in-stream water rights, Toole says, and help keep trophy homes off the riverside land that goes with the dams.

The dam owners warn that I-145 is too risky for consumers, too complicated for voters, and would only create an expensive bureaucracy with no expertise in hydropower. They've filed a lawsuit charging the initiative violates Montana's Constitution, but the final court decision isn't expected until after the election.

Households as far away as Spokane, Wash., could be affected. The Montana Power dams were bought by PPL, which is based in Pennsylvania and now operates a Montana subsidiary. But one dam targeted by the initiative has been owned all along by Avista, which is based in Spokane. The Avista dam generates the most power and ships it to Spokane and northern Idaho. If Avista has to sell the dam, rates for its customers will likely go up, says Avista spokesman Hugh Imhof.

Across the country, there are more than 2,000 publicly owned utility entities. Thirty percent own their own generation plants, and some * including those in Idaho Falls and Soda Springs, Idaho * own dams.

Tom Power, an economics professor at the University of Montana, says I-145 is feasible for Montanans; once the state owns the dams, it should be able to offer households stable, low rates. Power says, "We can return ... close to the status quo of where we were before the dams were foolishly sold off."

The author writes from Missoula, Mont.

You can contact ...

• Montanans for Dam Cheap Power, in Helena, 406/442-2968 or www.damcheappower.com;
• Taxpayers Against I-145, in Helena, 406/442-4280.

• Energy & Industry
• Hydropower