House committee hears split testimony on bill narrowing utilities’ right of first refusal

The House Energy, Technology and Federal Relations Committee heard competing arguments on Senate Bill 355, a measure that would narrow a 2017 statutory right of first refusal (ROFR) for certain electric transmission projects and require competitive bidding for larger projects.

Senator Wiley Galt, sponsor, described SB355 as “a compromise” that removes most ROFR protections while preserving them for electric cooperatives and adding building and design requirements. He told the committee the change is intended to spur competition and help future ratepayers amid rising energy demand.

Opponents questioned the bill’s operational impacts. Mike Green, an attorney representing Montana Dakota Utilities (MDU), said the bill as written would exclude Montana Dakota from ROFR protections for lines that interconnect with its system and urged the committee to retain MDU’s participation. Green argued the Eastern Montana grid is remote and interdependent and said locally based owners and maintainers are essential to keeping the system running. “It takes special people to keep that system operating,” he said, and warned that a patchwork of owners could impair consistency and reliability.

Proponents framed the measure as a targeted way to introduce competition. Mark Lambrecht, director of government relations for the Montana Electric Cooperatives Association, detailed language requiring incumbent utilities to run competitive bids for transmission projects valued at $8,000,000 or more, and to ensure awarded projects meet the incumbent’s standards and that the incumbent would assume ownership and maintenance after construction.

Advocacy groups also weighed in. Henry Kriegel of Americans for Prosperity called the bill a way to promote free-market competition and lower costs for consumers. Anne Hedges of the Montana Environmental Information Center urged passage to accelerate needed transmission expansion and cited a study suggesting competitive bids can come in substantially below initial cost estimates.

During questioning, committee members pressed MDU on geography and future work. Vice Chair Kmetz asked where the ROFR-covered segments are located; Green said the ROFR applies to parts of Eastern Montana within the Midwest Reliability Organization footprint and that MDU currently has no transmission additions queued that would trigger ROFR. Green said the bill’s exclusion of MDU would remove its ability to own and operate lines that interconnect with its system unless the bill’s deletion language were reversed.

No committee vote or formal action was recorded on SB355 during this session. Chair Perry closed the hearing and moved on to the next agenda item.

What’s next: The committee concluded the SB355 hearing without a recorded vote; further committee consideration or floor action would determine whether the bill advances.