Electric Deregulation Consumers and the Environment
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University of Montana ScholarWorks at University of Montana Graduate Student Theses, Dissertations, & Professional Papers Graduate School 2000 Montana's power trip: Electric deregulation consumers and the environment Patrick Judge The University of Montana Follow this and additional works at: https://scholarworks.umt.edu/etd Let us know how access to this document benefits ou.y Recommended Citation Judge, Patrick, "Montana's power trip: Electric deregulation consumers and the environment" (2000). Graduate Student Theses, Dissertations, & Professional Papers. 8509. https://scholarworks.umt.edu/etd/8509 This Thesis is brought to you for free and open access by the Graduate School at ScholarWorks at University of Montana. It has been accepted for inclusion in Graduate Student Theses, Dissertations, & Professional Papers by an authorized administrator of ScholarWorks at University of Montana. For more information, please contact [email protected]. Maureen and Mike MANSFIELD LIBRARY The University of Montana Permission is granted by the author to reproduce this material in its entirety, provided that this material is used for scholarly purposes and is properly cited in published works and reports. '^Please check "Yes" or "No" and provide signature Yes, I grant permission No, I do not grant permission _________ Author's Signature: ~y 7 / Date: // c / oo________ Any copying for commercial purposes or financial gain may be undertaken only with the author's explicit consent. 8/98 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. MONTANA’S POWER TRIP: ELECTRIC DEREGULATION, CONSUMERS, AND THE ENVIRONMENT by Patrick Judge B.A. The Colorado College, 1993 presented in partial fulfillment of the requirements for the degree of Master of Science The University of Montana November 2000 Approved by: Chairperson Dean, Graduate School Date Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. UMI Number: EP39310 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. UMT Oi&sartaîion FHibltahing UMI EP39310 Published by ProQuest LLC (2013). Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code ProQ^st ProQuest LLC. 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ACKNOWLEDGMENTS I owe a tremendous debt of gratitude to many individuals for either directly or indirectly assisting me in the completion of this paper. Foremost I wish to acknowledge my committee - especially Bill Chaloupka, for his exceptional contribution, patience, and encouragement. Tom Power, chair of Economics, has long served as an inspiration for anyone working on progressive energy policy in Montana and his technical comments were of great value. Tom Roy, chair of Environmental Studies, is nothing short of a true hero and friend. Principal among those who helped impart an understanding of energy and utility issues are Barbara Whitten, Ken Toole, David Ewer, and Tim Baker. The Montana Environmental Information Center, under the leadership of Jim Jensen, provided enormous assistance to this project, for which I am deeply grateful. I wish to express a special thanks to fellow energy staffers Lila Cleminshaw and Graden Oehlerich, for the joy of working together, and for their friendship. Donna Mix and Jeff Morris invested many hours proofreading the document, and many others helped with research, notably Will Rosquist of the Public Service Commission (PSC), Bill Drummond of Western Montana G & T, Charles S. Johnson of the Lee State Bureau, Mike Dennison of the Great Falls Tribune, and David Crisp of The Billings Outpost. I wish to thank the staff and board of the Northwest Energy Coalition and the Renewable Northwest Project for furthering my education and aiding my efforts, especially Lee Anne Tryon, Rachel Shimshak, Peter West, Sara Patton, Nancy Hirsh, Michael Karp, and Deborah Smith. Thanks also to Kathy Hadley and Jim Morton of the Montana Electricity Buying Cooperative and to “the Bobs,” PSC Commissioners Anderson and Rowe. The B & B Dawson and Clancy Gordon scholarships provided financial help. Finally, I wish to recognize the support of my friends and family, who endured the task with me and kept me on the path. ii Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. CONTENTS ACKNOWLEDGMENTS .................................................................................................. " CONTENTS ............................................................................................................................. iii LIST OF ABBREVIATIONS..................................................................................................... viii DEDICATION ................................................................................................................ xi Chapter 1. INTRODUCTION .................................................................................................. 1 The Basics .................................................................................................. 1 The Issues .................................................................................................. 6 Why Electricity Matters ........................................................................ 13 Purpose .................................................................................................. 16 Scope 17 2. SB 390 BACKGROUND ..................................................................................... 20 Deregulation — A National Perspective ............................................. 20 Deregulation in the Pacific Northwest 29 Deregulation in Montana — Senate Bill 390 32 Arguments in Support of SB 390 37 Arguments in Opposition to SB 390 ............................................. 40 Another Opposition Argument — Stranded Benefits . 43 Another Opposition Argument — Process ........................ 51 SB 390 Amendments and Passage ............................................. 57 3. CONSUMER ISSU ES.................................................................................................. 60 Existence of M arkets ..................................................................................... 61 m Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Aggregation ................................................................................................... 63 Mergers ................................................................................................... 65 Self-Dealing ................................................................................................... 66 Services ................................................................................................... 68 Price ................................................................................................................ 69 Cost-Shifting.................................................................................................. 75 Stranded Costs 77 National Perspective and General Theory ............................... 79 Regulatory C om pact.......................................................... 80 Precedence ........................................................................ 81 Size and Allocation .......................................................... 82 Montana P e rsp e c tiv e ........................................................................ 84 What SB 390 Did .......................................................... 87 Transition Costs Financing ....................................................................... 88 Reliability .................................................................................................. 89 Preferential Treatment ..................................................................................... 91 4. ENVIRONMENTAL ISSU E S..................................................................................... 94 Coal-Fired Power Generation ........................................................................ 96 Carbon Dioxide and Other Greenhouse Gases ................. 98 Particulate Matter (PM-10, PM-2.5 ) ................................................100 Sulfur Dioxide ........................................................................................ 101 Nitrogen Oxides ...........................................................................101 Air Toxics ........................................................................................ 102 Hydroelectric Power Generation ............................................................. 104 Nuclear Power Generation ...........................................................................106 Natural Gas Power Generation ............................................................. 108 iv Reproduced with permission of the copyright owner. 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