To read more co-op history, visit the RE Magazine Archive.
The investor-owned utilities did everything they could think of to stop President Franklin D. Roosevelt’s administration from launching the rural electrification program in 1935, and then made it hard for electric co-ops to succeed for decades after that.
The IOUs wouldn’t sell wholesale power to co-ops, or at least not at a fair price. They built spite lines. They spread anti-co-op propaganda. They instigated sell-out campaigns.
And sometimes, they exerted their political clout behind the scenes to stop co-ops from signing up profitable new loads. One of these episodes was the 1959 Yellowstone bidding scandal.
The IOU was Montana Power Company, and the load was Yellowstone National Park. Two co-ops also bid on it: now-defunct Shoshone River Power in Wyoming and Fall River Rural Electric Cooperative in Idaho.
The facts of the scandal came to light at a hearing conducted by a special House Government Operations subcommittee chaired by Rep. John Moss (D-California), who charged that the contract Montana Power signed with the federal government in February 1959 “deliberately wasted public funds” and discriminated against the electric co-ops.
Rep. Moss grilled Samuel A. Hoover, a National Parks Service engineer who admitted under cross-examination that he recommended the government sign the contract even though Montana Power’s bid was the highest of the three proposals to serve the park with up to 3,030,000 kilowatt-hours of electricity annually.
Hoover testified that the Park Service solicited rate bids from Montana Power and the two co-ops in the summer of 1956 and received three bids: Montana Power Company, 5.422 cents per kwh; Shoshone River Power Cooperative, 5.189 cents per kwh; and Fall River Rural Electric Cooperative, 4.188 cents per kwh. (Montana’s Park Electric Cooperative, though interested in serving Yellowstone, did not offer a formal bid.)
Hoover acknowledged that the co-ops’ bids were lower, but said “other considerations” made the Montana Power bid more advantageous.
“You deliberately avoided the opportunity to take the deal which would be best for the government,” Moss exploded.
Hoover later explained that negotiations with the co-ops ended because a new right-of-way would have had to be cut through some 18 miles of virgin parkland.
“However, subcommittee investigations revealed the contract with Montana Power necessitates cutting a new right-of-way 40 feet wide through 34 miles of heavily timbered park area,” said a news brief in the November 1959 issue of RE Magazine. “Further data indicated the contract quietly signed with Montana Power was a lucrative cost-plus type, vastly different than that on which the co-ops had been asked to bid.”
The Department of Interior, where the National Parks Service resides, later said it was “restudying” the contract. But NorthWestern Energy (Montana Power’s name since 1998) says in a timeline on its website that in 1959 the company built 94 miles of transmission lines and distribution lines in Yellowstone in “collaboration with the federal government.”
At least one person involved in the scandal paid for it with his reputation. James K. Macintosh, director of public utilities for the federal General Services Administration, said during the hearing that if he had to do it over again, he would still award the contract to Montana Power. Then he changed his mind a few weeks later, telling Rep. Moss privately that he shouldn’t have.
“Macintosh has been banished from his position with GSA and given another assignment for ‘health reasons,’” RE Magazine reported. “His doctors advised him to take a post with less responsibility.”
NorthWestern Energy serves Yellowstone National Park to this day.
