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Electric utility regulators approve NorthWestern Energy fee increases

A close up of an energy rate case
Kayla Desroches
Yellowstone Public Radio
A close up of an energy rate case

The Montana Public Service Commission meeting Wednesday kicked off with an hour of frustrated public comment and ended with commissioner approval of an added $82 million to NorthWestern’s electric rate base revenue.

NorthWestern last filed a general rate case in 2018. Commissioners had the option to either vote yes or no on a settlement reached this spring between NorthWestern and intervenors including customer advocate the Montana Consumer Counsel.

“The standard isn’t that we disapprove rates based on whether or not we want to,” said PSC President James Brown. “Our jobs are to determine whether the rates proposed are just and reasonable.”

NorthWestern Energy electric customers have already been paying towards the settlement’s $82 million revenue increase because of an interim rate change last year, fee collection adjustments, property taxes and other cost changes since NorthWestern filed its general rate case application in August 2022.

The impact of the settlement amount on the average residential customer’s electric bills depends on many things, including the date of comparison. NorthWestern’s filings identify a 28 percent increase between rates last August and rates at the date of settlement this spring, or a roughly $25 dollar average increase monthly.

As part of NorthWestern’s rate case, the Montana Public Service Commission also approved an approximately $18 million dollar increase in natural gas revenue collection.

However, according to PSC staff, the average household charge is actually down compared to when NorthWestern filed its application to increase fees last August.

Attorney Lucas Hamilton said the average household bill with the rate increase is nearly $9 dollars lower a month than last year.

“Natural gas supply charges have dropped significantly,” he said. “The average monthly bill for residential customers was actually higher in August 2022 than it would be under the rates approved in this order due to that reduction in the natural gas supply charges.”

Analysts with the U.S. Energy Information Administration said earlier in October that lower wholesale natural gas prices this year indicate a 21 percent decline in the U.S. average residential retail price this winter.

Kayla writes about energy policy, the oil and gas industry and new electricity developments.