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Published July 08 2010

Cramer criticized over prudence law

BISMARCK – Public Service Commission candidate Brad Crabtree wants opponent Kevin Cramer to take responsibility for a $13 million rate increase from a failed power plant and for supporting legislation that left consumers with the bill.

At a news conference Wednesday, Crabtree said Cramer has repeatedly said he had no choice but to vote for the rate increase under North Dakota law.

“Kevin Cramer tied his own hands by helping to craft the very law he now criticizes,” Crabtree said.

In 2005, Cramer was “actively involved in reviewing and amending the bill that established advance determination of prudence,” Crabtree said.

In the case of the Big Stone II project, commissioners gave the project an early seal of approval by deeming the investment “prudent” before it was built, allowing the utilities to come back later to recover their costs for developing the plant, as The Forum reported this week.

The prudence law was intended to reduce the financial risk for taking on costly utility projects. But the effect of the law, as it was implemented in the case of North Dakota’s share of Big Stone II, was to shift the risk of developing the plant onto ratepayers instead of shareholders.

As a result of the failed project, Montana-Dakota Utilities Co.’s North Dakota electricity customers will pay monthly residential rates that will be, on average, $1.49 a month higher for about three years beginning in August.

Otter Tail Power Co.’s electricity customers in North Dakota will pay an average of 62 cents more on their monthly bill for about three years.

Cramer said Crabtree is “grasping at straws.” The prudence law passed the North Dakota Legislature unanimously in 2005, Cramer said.

“Brad needs to remember that the advance determination of prudence law was co-sponsored by the Democratic leader in the North Dakota Senate,” Cramer said.

Cramer said he does have a problem with how the utilities are making profit off consumers as a result of the failed project.

“I find it immoral that they would exercise that in this particular case,” he said. “I don’t think the Legislature ever envisioned that a project that didn’t even turn a spade of dirt would be able to earn a profit for the investors.”

Finneman is a multimedia reporter for Forum Communications Co.