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Montana Power seeks cheaper rates

Montana Power seeks cheaper rates

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HELENA - Montana Power Co. hopes to get a lower price for electricity before it signs a power-purchase contract with PPL Montana that was negotiated before prices began dropping in the region, a company executive said Monday.

Jack Haffey, Montana Power president, told the Montana Power Authority that price will be one of the items in final talks on the deal, because of changes in the overall market price of electricity.

But Jerome Anderson, a spokesman for PPL, said the power generator wants to keep the $40 per megawatt rate agreed on when the deal was struck in April.

Forty dollars remains a fair rate, despite market declines since spring, he said.

The authority, formed to consider state investment in power generation of its own, is concerned about the Montana Power-PPL contract because the five-year, 500-megawatt deal will have a big effect on what happens to consumer electricity bills after a rate freeze ends in 11 months.

PPL currently sells electricity to Montana Power at a rate of about $25 per megawatt.

Gary Buchanan, authority member from Billings, questioned how Montana Power could be expected to have the best interests of consumers at heart when it is assured of recovering all its electricity-purchase costs through rates. The company faces no risk in agreeing to a higher price for power, he said.

But Haffey pointed out that his company has to justify before the state Public Service Commission the prices it agrees to pay for electricity in negotiated contracts.

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