PPL under fire by state regulators

Over the past 12 months, the state’s Consumer Counsel and attorneys hired by the office have been trying to get the Federal Energy Regulatory Commission to revoke PPL Montana’s “market-based rate authority.”

PPL Montana, the major supplier of electricity for the state after buying the former Montana Power Co. power generating units, could be forced to charge its Montana customers much lower, cost-based prices for wholesale power.

“In our view, there is a realistic chance that the (rate authority) could be revoked, and there could be benefits in terms of lower generation costs for our market,” said Bob Nelson, with the Consumer Counsel.

They argue that PPL owns and operates more than 90 percent of the power sold in MontanaÂ’s unregulated market, controlling a near monopoly over in-state wholesale power sales.

The Consumer Counsel cites spiraling energy costs in the state as an example of abuse of the monopoly.

PPL, the subsidiary of a Pennsylvania-based energy conglomerate, disputes the claim.

“(Nelson’s) filing seems to be based on a lot of conjecture, and not any real legal or economic theory,” said David Hoffman, head of external affairs for the company.

PPL sells up to 450 megawatts of wholesale power to NorthWestern Energy, the stateÂ’s largest utility, with nearly 300,000 retail electric customers. NorthWestern Energy is a division of NorthWestern Corp., the South Dakota firm on the verge of bankruptcy.

The two companies bought different pieces of the now-defunct Montana Power Co.

Nelson said his office will file an analysis later this year to back up his claims that PPL Montana does have “market dominance” in Montana, and that no real competition exists.

He said federal regulators have been cracking down on firms caught manipulating energy prices in the West, and thinks the time is ripe to go after PPL.

But Hoffman said PPL has never been named by FERC as a market manipulator, and the firm will fight to maintain its authority to charge market rates.