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Meet the PSC candidates who want to regulate your rates

by AMANDA EGGERT Montana Free Press
| May 31, 2022 7:00 AM

The Public Service Commission may be one of the least understood elected bodies in Montana, but its regulatory reach extends into nearly every household in the state through electrical meters, natural gas and water lines, internet routers or garbage service — the monopoly utilities regulated by the PSC on behalf of consumers 

Originally formed in 1907 to oversee railroad operations, the PSC consists of five partisan commissioners elected to staggered 4-year terms. In the 2022 election cycle, voters will elect commissioners to represent two of the commission’s five districts. 

The race has drawn an eclectic mix of candidates vying for those seats, with each expressing a different conception of the commission’s role, what appropriate regulatory oversight looks like, and where the commission’s scrutiny is needed most.

Last spring, for example, incumbent Republican District 1 Commissioner Randy Pinocci, whose district spans 22 northern Montana counties, lobbied for a legislative bill that would have put social media companies like Facebook and Twitter under the commission’s purview, arguing that effective Big Tech monopolies hamper political speech, and that given enough staff and an appropriate budget, the PSC is the right agency to regulate such platforms. Opponents said the bill would interfere with the First Amendment rights of private companies and questioned the cost and legality of the approach. It failed in the Senate Energy and Telecommunications Committee.

In remarks at an event earlier this month, Flathead Valley internal medicine doctor and District 5 candidate Anne “Annie” Bukacek proposed that the PSC should provide oversight to “the so-called autonomous board of the Flathead Reservation Water Management Board” that administers the CSKT water compact.

“Some check and balance is warranted in order to protect individual water rights and users from unfair rates, discriminatory takings and other possible depredations,” said Bukacek, a Republican who later described herself as a “5-foot-tall, 100-pound, energetic scrapper [and] innovative risk-taker for righteous causes.”

Several District 5 candidates are pitching support for specific energy sources in the state. Bukacek has advocated for coal and hydroelectric power. Helena farmer and rancher Joe Dooling, also a Republican, championed coal combustion paired with carbon sequestration during a March call with Montana Free Press. And termed-out Republican state Rep. Derek Skees expounded on molten salt thorium nuclear reactors during the 2021 legislative session — though in a PSC context he’s described himself as “energy agnostic” and said all sources of energy should be on the table.

Former commissioners interviewed by MTFP about the commission’s work say its oversight role doesn’t — or shouldn’t — give commissioners the ability to pick winners and losers in the energy arena. Rather, the PSC is designed to act as a surrogate for competition so that consumers without other recourse — the option of shopping around for other sources of electricity or drinking water, for example — are protected from exploitative business practices.

Travis Kavulla, a Republican who served on the commission between 2011 and 2018, said the PSC can supply some of the “virtuous pressures of competition” in markets where entry and exit is limited by legal monopolies. If the commission is functioning properly, utility companies will reap the benefit of smart business decisions and remain on the hook for bad ones, Kavulla said. Captive ratepayers shouldn’t be a “backstop” to ensure utility companies earn a profit for ill-advised business decisions, he said. 

“There’s a real tendency when you’re elected to an important position in government to feel the need to put your thumb on the scale and have a very command-and-control view of policy,” he added. “To the greatest degree possible, a successful utility commissioner is going to try to put accountability for making the right business decisions back onto the business — not on the government, and thus, consumers.”

There’s another factor to that equation, former Democratic Commissioner Ken Toole said: ensuring that utility companies stay healthy so they can continue to provide safe, reliable service. 

“It’s kind of this ‘push me, pull you,’ and I can guarantee you that a lot of these candidates don’t understand that,” Toole said. “You have to be concerned about the consumers, but you also have to be concerned about the financial health of the utilities.”

Bob Raney, a Livingston Democrat who served in the Legislature for 16 years before securing a seat on the PSC in 2004, underscored the body’s quasi-judicial role and the importance of commissioners “checking [their] politics at the door.” 

“It’s not like being a governor — it’s like being a judge,” he said. 

All four of the former commissioners interviewed for this story agreed that a substantial part of a commissioner’s job is reading reams of filings to understand how parties in disputes about how customer rates are calculated or costs for new power plants are distributed frame their arguments. The former commissioners described the traits that make for an effective commissioner as “diligence,” “willingness to participate,” and ability to “synthesize lots of information,” and they highlighted how relevant to daily life, if poorly understood, the PSC is.

“If you look at your household bills, [your utility bill] is probably in the top five, if not the top three,” Toole said. “The PSC has a huge impact on people.”

Kavulla, who worked for an energy-centric think tank after leaving the PSC and now works on regulatory matters for NRG Energy, a publicly traded utility company headquartered in Houston, Texas, describes the role of commissioner as among the most technical offices in state government held by elected officials. 

It’s also among the highest paid. Commissioners earn $109,000 in base salary. Just five elected offices in state government earn higher salaries: governor, Supreme Court justice, district court judge, attorney general and superintendent of public instruction.

Critics of the PSC, both inside and outside state government, have argued that commissioners’ six-figure salaries draw candidates who have limited familiarity with the commission’s work or interest in fulfilling the duties of the position.

“A big problem in the commission over [time] in Montana and elsewhere is that it tends to be like a retirement home for politicians, and that’s not good at all,” Kavulla said. 

Toole said the office’s appeal for late-career politicians can be partially explained by how the state calculates retirement funds for elected officeholders, which is based on both their years of service and their salary. (It used to be based on a three-year earning calculation, but lawmakers amended the formula in 2013 so retirement is based on five years of earnings rather than three, depending on when the individual was hired.) 

“The money is a big driver of it,” Toole said. “If you build eight years of legislative service and then you go to the PSC for three or four years, you build a retirement.”

At least four candidates running for the PSC this cycle said recent commission scandals factored into their decisions to run for the office. 

The splashiest of those scandals implicates two members of the current commission. What appears to have started as an interpersonal conflict between former commissioner Roger Koopman, whose term expired in 2020, and current commissioners Randy Pinocci and Brad Johnson, boiled over into a pair of lawsuits and contributed to the departures of at least three PSC staffers in the past two years. 

In December 2020, Koopman sued the state, the commission, Pinocci and Johnson for $2.5 million. He alleged, among other things, that Pinocci covertly and inappropriately deployed PSC staff to access Koopman’s work email account and leaked personal contents of his emails involving an intimate family matter to conservative news blog NorthWest Liberty News.

A year later, Justin Kraske, the former chief legal counsel to the commission, filed a wrongful discharge lawsuit against the commission, arguing that he was fired from the commission he’d worked at for nearly 13 years without just cause. In a 48-page filing outlining his claim, Kraske reported that his attempts to flag unprofessional behavior and malfeasance among commissioners and staff — including the email leak — culminated in a closed-door meeting where commissioners terminated his employment without explanation or notice. He’s seeking compensation for lost wages and punitive damages.

The two Democrats running for the commission’s District 5 seat, retired executive John Repke of Whitefish and telecommunications professional Kevin Hamm of Helena, said the email scandal — and concerns about commission’s efficacy more generally — featured heavily in their decisions to run for the seat.

Repke, who has an MBA degree and spent most of the 1990s at top posts with Houston, Texas-based trash collection and recycling giant Waste Management, Inc., alleges a “complete lack of professionalism and competence” at the commission that he said no Montanan should tolerate.

“The more I learned about what a mess it was, [the more] I felt like this was an opportunity for me to use the skills and background I have to actually do the job well,” said Repke, who most recently worked as a Columbia Falls wood products manufacturer’s chief financial officer. “I don’t see anybody on there who has the background to really understand the utility providers’ financials, and certainly not in the level of detail that I’d be able to.”

Hamm said commissioners have been “asleep at the wheel — literally asleep” and claims they’re “in it for the paycheck.” He told MTFP that everyone involved in the release of Commissioner Koopman’s emails should resign. He also cast doubt on the commission’s willingness to put tough questions and standards to NorthWestern Energy, the largest monopoly the commission regulates.

Hamm’s pitch to voters during a recent candidate forum hosted by the Choteau Acantha newspaper is that he is a creative problem-solver who can get things done. 

On the Republican side of the race, Dooling, a Helena-area farmer and rancher who ran unsuccessfully for the U.S. House in 2020, told MTFP “it’s time that the career politicians go away and the people who want to do the job step up.” 

Dooling said he appreciates how decisions made by the PSC impact small-business owners and called for a “firm but fair” hand in dealing with NorthWestern Energy, which serves about two-thirds of the state’s energy customers.

“I see the job of a PSC commission as being like an umpire calling balls and strikes,” Dooling said.

The three other Republicans running for the District 5 seat foregrounded other motivations for  their campaigns.

Anne “Annie” Bukacek, an internal medicine doctor with a private practice who resigned her post on the Flathead City-County Health Department in March to campaign for the PSC, said her concerns about the competence of other candidates on the ballot inspired her to run for the seat.

“In my morning prayer, after tossing and turning all night and reaching out to God, I heard in my spirit very clearly, ‘You do it,’” she says in a Youtube video describing her decision to declare for the seat just four days ahead of the filing deadline. “It’s nothing personal against [the other candidates], but suffice it to say my concerns were enough to toss and turn all night, and I got a very clear message that next morning that I need to run for that office.”

Bukacek is probably best known for her positions on COVID-19, vaccinations, abortion and gun rights. She is the founder of the Montana Pro-Life Coalition, sits on the Montana Shooting Sports Association’s board of directors, and describes herself as a proven grassroots leader. 

In contrast to Bukacek, Kalispell Republican Derek Skees has been eyeing a seat on the commission for years. He unsuccessfully ran for the PSC in 2015 (Johnson, the currently termed-out incumbent, won the primary by 15 points that year), and was among the first candidates to announce his candidacy this cycle. Skees chaired the House Energy, Telecommunications and Federal Relations Committee in the 2021 Legislature, where he sponsored several energy-related measures. 

Skees argues that experience makes him a good fit for the job, and emphasized that the PSC’s role is not to favor one energy source over another, but to shepherd dockets through the regulatory process with the interests of ratepayers in mind.

“When I get there, I’ll hit the ground running,” he said.

Marion Republican Dean Crabb has emphasized his nuts-and-bolts understanding of the utility industry, describing himself as a fourth-generation journeyman lineman who can provide the kind of oversight that keeps utility workers — and energy consumers — safe. His pitch to voters argues that none of the other candidates can match his knowledge of utility infrastructure, which he said extends from power plants to transmission lines to residential meters.

If fundraising is any indication, Crabb is a long-shot candidate in his first run for elected office. As of May 25, the only campaign contribution he’s submitted to the Commissioner of Political Practices is $924 he loaned himself to purchase campaign signs. 

District 1 candidate K. Webb Galbreath, a Republican who’s currently the Blackfeet Tribe’s operations director, is similarly underfunded, having received one $100 donation as of May 25. He nonetheless came out swinging against Pinocci in a May 13 Billings Gazette editorial, describing the incumbent as the “epitome of a political ‘hack’ who serves only himself.” He alleges that Pinocci has sided with monopolies in energy and garbage service matters, leading to higher bills for ratepayers. Galbreath also seized on a scathing legislative audit of the PSC in his critique of the current commission, arguing that there’s no excuse for the agency’s poor stewardship of public resources.

In a March interview with MTFP, Galbreath noted that five Indian reservations are within the District 1 boundary and said he’s concerned that a lack of competition in the utility space is hurting the pocketbooks of Native Americans.

Pinocci, the incumbent and Galbreath’s sole opponent — no Democrats filed in District 1 — has more than $13,000 on hand. Most of that is money he loaned himself, but he’s also collected contributions from more than 30 individuals.

In a March interview with MTFP, Pinocci emphasized how much he’s traveled as a commissioner — often on his own dime, he said — to understand his constituents’ concerns. He’s also developed a reputation as a commissioner who draws a large, somewhat mutable box around areas where PSC oversight is warranted. In addition to the social media oversight measure, Pinocci testified in support of a failed 2021 bill that would have directed the PSC to consider the economic impacts of the closure of a coal-fired power plant. 

Pinocci, like District 5 candidate Dooling, told MTFP he would like to see the state invest in carbon capture technology to keep the state’s coal-fired power plants viable. Critics of that approach question whether the amount of carbon that could be removed from a plant’s emissions justify its high cost, though carbon capture has a committed cadre of champions in the U.S. and Canada. 

Prior to his election to the PSC in 2018, Pinocci served a single term in the Montana Legislature, where he sat on the House Federal Relations, Energy and Telecommunications Committee. In a recent conversation with MTFP, Pinocci said he’s taken the initiative to enroll in a natural gas ratemaking course with New Mexico State University’s Center for Public Utilities to learn more about the commission’s regulatory role relative to natural gas prices, which have generally been climbing over the last two years.

Two current commissioners, PSC President James Brown and former state Sen. Jennifer Fielder, representing District 3 and District 4, respectively, are almost halfway through their first terms. District 2 Commissioner Tony O’Donnell of Billings will term out at the end of 2024. Brown is currently running for a seat on the Montana Supreme Court. If Brown is elected to the court, Gov. Greg Gianforte will appoint a replacement to sit on the PSC, per Montana law.

The primary election is June 7.