- Your Town
To the Editor,
Much has been written about the bankruptcy of Southern Montana Electric (SME). While Enron’s demise may have gathered more national media headlines, the demise of SME does not lack the drama, sordid characters, secrecy or ill begotten financial gains thrust upon unsuspecting ratepayers.
Lee Freeman, SME Trustee has now proposed a plan to lead SME out of bankruptcy. Many aspects of that plan remain secret. What is clear, is that it relies on favorable future energy markets, ownership of Highwood II and creditors ($85 million) will be repaid over a period of 10 years on the backs of the 14,400 remaining customers. Has anyone actually run the numbers to see what the monthly financial impact will be to the average residential customer?
Freeman sits on the precipice of making a catastrophic decision that will destroy the economic vitality of rural Eastern Montana for decades to come. This is easy to overlook in the shadow of the Bakken economic stimulus, but everyday folks will cease to be able to live and work in eastern rural Montana. Fixed income, low income and seniors will migrate to communities served by Northwestern Energy out of dire necessity.
Freeman’s plan makes the primary creditors (Prudential) financially whole. Prudential manages a multimillion-dollar loan portfolio. That portfolio has winners, as well as losers. To manage that risk, high-risk customers are charged higher rates as was done with SME.
Freeman needs to get his clippers and give Prudential a significant haircut, high and tight.
Kevin P. Owens