Montana to Creat State Transmission Authority (as Wyoming did last year?)

http://www.billingsgazette.com/index.php?display=rednews/2005/01/10/build/state/35-olson-power-bill.inc

Olson plans to jolt Legislature with power bill

By JIM GRANSBERY
Of The Gazette Staff

Rep. Alan Olson, R-Roundup, sees Montana in the electrical power transmission business and will introduce legislation early in this session to set up an all-encompassing law to do it.

Olson, in his third House term, said he instigated the bill, but a "working group" of regional utilities - including Avista, PacifiCorp, PPL and NorthWestern Energy - had input in its drafting. The process took about six months, he said.

The bill will go before the Federal Relations, Energy and Telecommunications Committee that Olson chairs in the Montana House.

The title for the act runs two pages and covers all the bases for the state to get into the electrical transmission business, both directly and indirectly.

"The state does not necessarily have to do this; it can set up a public-private partnership," Olson said. "For example the state can do the permitting phase. Or it can lease the lines like Bonneville (Power Administration)."

The bill would establish a Montana Transmission Authority, similar to one created by the Wyoming Legislature last year, that would have the power to issue revenue bonds, up to $750 million worth, to finance the projects.

The breadth of the bill gives the MTA the power to "facilitate, plan, finance, site, construct, develop, acquire, own, rent, lease, maintain, upgrade and operate new electrical energy transmission facilities and related supporting infrastructures."

The proposed law would allow for joint ventures and would limit the authority's power if a private entity is willing to construct transmission facilities or provide certain services.

There is a preference clause for Montana labor and a limit on local governments' authority over the MTA.

It authorizes the board of examiners (governor, attorney general and secretary of state) to sign the revenue bonds for the MTA to facilitate and build electrical transmission lines and provides that the principal and interest on the bonds is payable from the net revenue of the transmission lines.

The MTA would not be regulated by the Public Service Commission.

"It is modeled after Wyoming and a proposal in North Dakota," Olson said.

He said the bill was not written specifically to aid coal development in the Otter Creek area.

"This is for all Eastern Montana," Olson said. "It will be used for coal and wind power, too."

Olson said the bonds do not create any liability for the state. Revenue bonds are not repayable under the "full faith and credit" of the state, which has the power to tax its citizens to pay off general obligation bonds. The state's affiliation with revenue bonds allows for a lower rate of interest in financing the bonds.

The bill has been reviewed by the state's bond counsel, Mae Nan Ellingson, of Missoula.

The Wyoming law, passed last spring, allows the Wyoming Infrastructure Authority to issue up to $1 billion worth of bonds. It allows the WIA to own and operate the new power lines or lease them on a wholesale basis only.

The MTA would comprise a five-member citizen board appointed by the governor with the consent of the state Senate. Members would serve four-year terms on a staggered basis.

Similar legislation in Montana has not survived. The 2001 Legislature created the Montana Power Authority, which allowed for up to $500 million in revenue bonding capacity for transmission projects.

Then-Gov. Judy Martz opposed state ownership of any power facilities. The MPA became moot when a referendum in the 2002 election repealed the law that created it.

In 2003, the Legislature considered and rejected a proposal to provide up to $800 million in bonding capacity with the money targeted at development of state-owned coal at Otter Creek.