News on the energy situation in Montana just keeps getting worse. Now it appears our power distribution utility, NorthWestern Energy, is headed for financial collapse.

The governor has appointed a task force. The Public Service Commission is requesting information and legislators are talking about a special session. All eyes are on NorthWestern as the next chapter of the deregulation debacle hurtles to its end.

But, as Paul Harvey might say, we need to know the "rest of the story." Assume that NorthWestern goes broke. Let's say that a group of Montana organizations including Rural Electric Co-ops, cities and towns, businesses and consumers gets together and buys NorthWestern. And then let's just say that they're able to buy NorthWestern at a reasonable price, that they have the expertise to run the distribution system and they'd make Montana small customers top priority. It's a great idea.

But where are they going to get power? Unfortunately, the same place NorthWestern goes --- the unregulated, wholesale power market. That's a big problem. Even if Northwestern was financially solvent, we would still be subject to the control of power marketers. Power marketers don't care a lot about the economic vitality of our state, the ability of low-income people and seniors to pay their bills or the quality of our power delivery system. The major supplier in Montana, Pennsylvania Power & Light (PPL), has clearly and publicly said that they will sell power at the highest possible price. We can't blame them for that. It's a basic principle of the unregulated power market. It just isn't working well for Montana consumers.

So, now you know the rest of the story. Even if we fix NorthWestern, Montanans are still facing a big problem--- power supply. Right now there's a lot hand wringing and head scratching going on. Deregulation is a failure. We have missed several opportunities to get off the deregulation path. The collapse of NorthWestern creates yet another "opportunity" to make some changes for the benefit of Montana customers. We either need a change in direction or a change in leadership, or both.

In the most simple terms two approaches can be taken. First, we can try to keep the current "deregulated" system in place and take minimal action to shore up NorthWestern through this financial crisis. This approach has been most clearly advocated by Republican gubernatorial candidate Bob Brown's running mate, Dave Lewis. He proposed a tax payer guarantee of revenue for NorthWestern to help their credit rating. It's ironic that a leading Republican, the party that touted electric deregulation, now proposes a public bail out of a private corporation.

We can take a broader approach and try to guarantee power supply at the same time we guarantee a healthy "lines and wires" utility. This approach is best exemplified by the buy back the dams initiative, a proposal which was resoundingly rejected by the voters in 2002 after the big energy corporations spent almost $3 million to defeat it. (For disclosure sake, I should point out that I was one of the authors of the Dams initiative. Thought it was a good idea then and think it is a good idea now.)

Somewhere between those two approaches is the idea of forming a co-op to buy NorthWestern Energy. Organizing NorthWestern customers as a co-op gives western Montana customers access to a block of power from the Bonneville Power Administration which is reserved for public utilities and co-ops. Though the price often fluctuates, it still would provide a relatively affordable and stable source of power. Second, a co-op provides access to low-cost loans through programs subsidized by the Federal government. This has a major impact on rates because, in the energy business, the cost of borrowing money is included in our rates.

But, even with the benefits of co-op ownership, we are left with this nagging problem of supply. So long as Montanans have to rely on power markets we are very likely to face uncertainty for the future and even higher rates. And so, as we work on potential solutions to Montana's energy woes, we should be thinking about the rest of the story--- where will we get our power supply?

Ken Toole is a state senator representing Central and West Helena.