Missoula joins bid to buy utility assets

An eight-member majority of the Missoula City Council decided to go shopping for a power grid Monday night, voting to join the Montana Public Power Authority in its efforts to buy bankrupt NorthWestern Energy Corp.’s energy transmission system.

By ROB CHANEY of the Missoulian

http://www.missoulian.com/articles/2004/04/27/news/top/news01.txt

But while trying to think globally about power supplies, the council found its citizens acting locally about a controversial rental house on Evans Avenue. An impromptu public hearing produced more than an hour of angry testimony about landlords taking advantage of loopholes in the city’s development laws.

On the power deal, Mayor Mike Kadas didn’t change any votes from last week’s committee hearings, where he already had a slim majority favoring the deal. But he still made a passionate plea for public understanding of the undertaking.

"We’re not just faced with an opportunity, we’re faced with a crisis," Kadas said. "It gets right at the heart of our quality of life and economic stability. We have a responsibility when we see things we can have an impact on, we have to jump forward. And it is the cities of Montana that have the guts to stick their necks out a little and take a risk that has huge opportunities for the state of Montana. I’m grateful the cities are willing to do that."

The vote approved adding Missoula to a group of four other cities that want to bid on NorthWestern’s bankruptcy proceedings. The value of its assets range from $1 billion to $1.5 billion. The cities plan to sell bonds based on the market of Montana ratepayers to run the power grid as a public utility.

Council members in favor were John Engen and Heidi Kendall of Ward 1, Anne Kazmierczak and Don Nicholson of Ward 2, Stacy Rye of Ward 3, Myrt Charney of Ward 4, Jack Reidy of Ward 5 and Ed Childers of Ward 6. Opponents were Lou Ann Crowley of Ward 3, Jerry Ballas of Ward 4, Bob Lovegrove of Ward 5 and Clayton Floyd of Ward 6.

The deal does not involve buying any electricity generation facilities, as NorthWestern doesn’t own any. It does seek to buy the power lines and natural gas pipes that deliver that energy, and make up about half the monthly power bill of most Montana residents. The MPPA agreement would obligate Missoula to pay about $25,000 in consulting costs, and then about $75,000 in further legal work if the cities are allowed to bid on the bankruptcy proceedings.

"I’ve rarely seen so large and so complex an issue so poorly understood," Lovegrove said. "I am dumbfounded by lack of attention it was given in the other cities that approved this. It’s like trying to pick up Jell-O. It’s constantly moving."

"I’d rather take the $100,000 and take it to Las Vegas and invest it," Ward 4 Councilman Jerry Ballas said. "I think we’d get a better return on it."

But supporters were convinced it was the right thing to do.

"If we don’t give ourselves a chance to get this power back," Ward 5’s Jack Reidy said, "we’re damn fools. I’m going to support it."

Kadas said other cities that have failed at turning private utilities into public ones usually tried to condemn their local power systems, and that way was much more expensive and troublesome. It was better, he said, to take advantage of the rare opportunity to buy it when it was for sale.

"What will happen if we don’t step forward?" Kadas asked. "We have a company in bankruptcy, sold by a company that doesn’t exist anymore, and is now in the hands of a group of creditors who specialize in distressed companies. There’s another name for them: They’re called vulture capitalists. They’re here to make a fast buck, and these guys are really good at it. Do you think if they sell it to anyone else, it will be anybody who gives any kind of a rip about the state of Montana? I want Missoula to be a part of what the other cities are doing. Better to work in partnership instead of competing with them about every little thing."

But before the council could get to that vote, it had to pass through a storm of protest about a proposed boundary line relocation at 636 E. Evans Ave that would allow the landlord to build a second house on the land. The existing house, they said, was already a neighborhood catastrophe. Since it became a rental about a year and a half ago, it had drawn more than a dozen visits by the police, along with additional appearances by the fire department and health department.

The simple solution, neighbors argued, was to ban the legal policy of allowing Missoulians to redraw their lot lines. As is, owners of multiple lots in older neighborhoods like the Evans area can split their extra lots off and develop them as new homesites.

"How can the city determine if subdivision law is being evaded if they aren’t even informed about the purpose?" Evans Avenue resident Stephen Brown asked. "We can ask the nature of applicant’s business, and this one is buying property, relocating boundary lines and building rentals. It’s abuse of the law."

Plat Annexation and Zoning Committee Chairman John Engen promised the issue would get time at this Wednesday’s committee session, which starts at 10 a.m.

Reporter Rob Chaney can be reached at 523-5382 or at [email protected]