How the Big Sky Went Dark

[swag]

http://www.nytimes.com/2008/04/06/opinion/06mcnamer.html?scp=1&sq=mcnamer&st=nyt">Deirdre McNamer, dateline Missoula, MT New York Times

A few years ago, one of my students told me a story that struck me as a quiet tragedy. Lonnie was from Butte, and his father had worked many years for the electricity company, Montana Power. The state regulated its rates, among the lowest in the country, and the Power (as everyone in Butte refers to it) had a monopoly.

In 1997, the Montana Legislature passed a last-minute bill, strongly supported by the governor at the time, Marc Racicot, that deregulated the price of electricity and opened up the market to competition. Within six months, the company began selling off its generating assets, then announced it was getting out of the electricity business altogether to embrace the dot-com revolution under a new name, Touch America.

This decision was taken by the utility’s chief executive, Bob Gannon, with the counsel of the investment behemoth Goldman Sachs, and without consulting the stockholders. “The debacle,” as Lonnie refers to it, was the result.

Electricity prices in Montana shot through the roof, the dot-com bubble burst, Touch America tanked (but not before Mr. Gannon and three other executives set aside $5.4 million for their golden parachutes.) The stock became essentially worthless, and hundreds of former employees, Lonnie’s father among them, found themselves staring at wiped-out savings and pension accounts.

Mr. Racicot, a Montana native, went on to become a lobbyist for clients that included Enron. In 2002 and ’03, he was chairman of the Republican National Committee. Then he headed George W. Bush’s re-election campaign.

. . . more

[Debi]

1. We were just talking about this at our platform committee meeting

(My folks live in Montana and had the misfortune of living through the Montana Power debacle)

[swag]

2. My family lives there too. Two months ago when I was back there

everyone was bemoaning the extremely expensive electricity.

[TomInTib]

3. We certainly don't hear much of Mr Racicot anymore, do we?

But that man could smile, couldn't he?

[Muttocracy]

4. wow, amazing how it's all connected. thanks for the post. nt

[Wilms]

5. 60 Minutes: Who Killed Montana Power?

Who Killed Montana Power?

Ex-Shareholders Feel Misled

Aug. 10, 2003

Steve Kroft

(CBS) For nearly 90 years, the Montana Power Company exemplified the very best of American capitalism. It provided cheap, reliable electricity for the people of Montana, excellent benefits for thousands of employees and generous, reliable dividends for its stockholders.

Everyone was happy, except for the corporate officers and their Wall Street investment banking firm who decided there was more money to be made in the more glamourous and profitable world of telecommunications.

The result exemplified the worst of American capitalism.

When 60 Minutes first reported this story last February, the cheap electricity, the good jobs and the life savings of a lot of people were gone, along with the name Montana Power.

http://www.cbsnews.com/stories/2003/02/06/60minutes/main539719.shtml

[Karenina]

6. K&R!!!

[truedelphi]

7. I hear that Illinois is facing a similar scam, if it hasn't already gone through

The thing is, all these scams get pulled off state by state - eachnew venue states - This is the only way to go and no other program makes sense in today's "new and modern world."

It happens with everything - from the massive pig farms that first polluted the Carolinas and then ended up in the MidWest, to these power company "de-regulaters"