A central tenet of the American economy is that competition is beneficial for consumers. When companies become monopolies by eliminating competition, consumers suffer. Prices rise, innovation stagnates, and local businesses close, resulting in economic hardship for communities. Market abuses become prevalent, and ordinary individuals bear the brunt of the consequences.
The existence of laws against corporate monopolies underscores the recognition that “absolute power corrupts absolutely.” However, there are exceptions to these laws…
NorthWestern Energy holds the unique status of being a legally sanctioned monopoly in Montana. Regrettably, this investor-owned corporation has repeatedly exploited this privilege by opting for costly energy sources. The structure of our government-sanctioned monopoly incentivizes overspending.
By seeking a “return on equity” from the Public Service Commission (PSC), NorthWestern can secure a profit margin on its facilities. While the PSC should prioritize consumers’ interests and scrutinize these requests, NorthWestern often receives generous returns, leading to escalating energy costs for Montana’s working families.
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The latest rate hike proposed by NorthWestern includes a 10.8% profit margin, allowing the corporation to profit from expensive ventures. The monopoly’s preference for costly facilities over more economical options ultimately burdens consumers with higher bills without fostering competition.
NorthWestern justifies its investment in expensive and environmentally harmful plants by claiming they offer greater reliability compared to renewable energy sources. However, advances in battery technology enable the storage and deployment of renewable energy, making solar and wind power the fastest-growing energy sources in the U.S.
Research indicates that methane-fired plants, such as those favored by NorthWestern, are prone to failures during extreme weather conditions. Despite these risks, NorthWestern continues to prioritize costly investments like the Colstrip Power Plant, a move that would be highly questionable in a competitive market environment.
NorthWestern’s persistent rate hikes for expensive and unreliable plants underscore its abuse of monopoly status. Consumer advocacy and scrutiny from the Public Service Commission are essential to curb this exploitation.
Edward Barta, a Billings resident and NorthWestern Energy ratepayer, chairs the Northern Plains Resource Council, a conservation and family agriculture organization.
