So begins the narrative from the 2003 CBS News/60 Minutes expose, Who Killed Montana Power? Reading the narrative online, it is difficult to shake the sense of déjà vu, that we are witnessing the same tragic story all over again, through NorthWestern Energy’s risky investment in the proposed Mountain States Transmission Intertie (MSTI).
Quoting again from the 60 Minutes report, “Everyone was happy, except for the corporate officers and their Wall Street investment banking firm who decided there was more money to be made in the more glamorous and profitable world of telecommunications. The result exemplified the worst of American capitalism… [The demise of Montana Power] may not be the biggest scandal of our time, but to its stockholders, it shows how greed and outright stupidity destroyed one of the oldest and proudest companies in America.”
In parallel with Montana Power, NorthWestern Energy is betting the company on a risky investment that offers nothing for its customer base here in Montana. MSTI’s sole purpose is to satisfy corporate greed by exporting electricity from Montana to potential customers in Las Vegas and southern California. MSTI will not provide electricity to Montanans. It will not provide jobs for Montanans. And there is nothing green about industrializing the Montana landscape with fourteen-story tall transmission towers. What MSTI will do is give out-of-state customers the opportunity to bid against Montanans for our hydroelectric, wind, and coal-fired electricity, driving up rates instate.
In the pursuit of profit, NorthWestern Energy is openly waging war against Montanans, trying to ramrod this monstrosity across farms and ranches and right through some of our most scenic valleys. NorthWestern lobbyists pressured state legislators into passing HB 198, giving corporations the power of eminent domain. It enables companies like NorthWestern to take private property for profit-making ventures. But what kind of a company wages war on its own customers?
Quoting again from the 60 Minutes expose, Montana Power “was going to join the dot.com revolution by transforming itself into a high-tech telecommunications company called Touch America. The decision was made on the advice of its New York investment banker, Goldman Sachs, without consulting the stockholders.”
Montana Power lobbied the legislature to push through a bill that deregulated the price of electricity, and opened the markets up to competition – even though Montana had some of the lowest utility rates in the country. Deregulation inflated the value of Montana Power, at which point the company began selling off its assets to invest in Touch America, following the advice of Goldman Sachs. The result was that, “Electricity prices in Montana doubled, then redoubled, and doubled again – refineries, lumber mills, and the last working copper mine in Butte was forced to suspend operations because they couldn’t afford their electricity bills.”
Any corporation that wages war on its own customers in the pursuit of profit is at risk of implosion. Good investing begins here at home, not on market speculation. We lost a great power company when the executives at Montana Power got greedy. It is unfortunate to see NorthWestern Energy following the same path, gambling on risky investments at the expense of its customer base. It is going to take a long time for NorthWestern to heal these wounds. The company could start by canceling MSTI and offering a big apology for its actions.
Thomas J. Elpel is president of the Jefferson River Canoe Trail Chapter of the Lewis & Clark Trail Heritage Foundation (www.JeffersonRiver.org), PO Box 697, Pony, MT 59747. This guest editorial was published in The Madisonian September 22, 2011.