NorthWestern Energy recently invoked a little-known, 50-year-old law to implement a 17% electricity rate increase without approval from state regulators. The Montana utility board has now initiated a two-week hearing to determine the final extent of this rate hike. The focus is on the company’s efforts to recover investments in electricity infrastructure, notably a 175-megawatt gas plant in Laurel and upgrades to hydroelectric facilities. NorthWestern seeks a 10.8% return on investment and a $156.5 million electricity base revenue requirement.
Since the conclusion of the last rate case in October 2023, NorthWestern Energy has invested nearly $874 million in ensuring “safe, reliable, and affordable” service. According to company lawyer Sarah Norcott, assets like the Yellowstone County Generating Station are crucial for serving its 400,000 customers during extreme weather conditions. The utility claims that the plant, operational for about a year, will defray customers’ bills by reducing market purchases and selling surplus power to other utilities.
Despite these assurances, intervening parties argue against the rate hike, citing the $300 million plant as a source of environmental and zoning litigation. Montana Consumer Counsel attorney Jason Brown criticized NorthWestern for using ratepayers as a safety net for risky decisions fraught with lawsuits and delays. Critics assert that these costs should fall on shareholders, not captive customers who lack other utility options.
NorthWestern projects that the gas plant will reduce market megawatt purchases, selling more to utilities and offsetting customers’ costs by tens of millions. However, environmental groups highlight a recent $26 million undercollection as evidence of volatile forecasting. During the PSC hearing, opponents also advocated for cleaner, more affordable energy solutions over fossil fuels like YCGS and the Colstrip coal plant, which NorthWestern plans to expand amidst other utilities’ withdrawal.
Barbara Chilcott of Renewable Northwest emphasized the need for substantial transmission, renewables, and storage investments for a reliable resource portfolio. “NorthWestern’s failure to consider transmission capacity in its resource modeling constrains generation development,” she stated. Additional attorneys from environmental and consumer groups reserved their remarks for when they call experts to testify.
Protestors gathered outside the commission’s office in Helena to oppose the rate hike and NorthWestern’s fossil fuel investments. “This is your chance to stand up for Montanans, not fossil fuel investment,” said Sarah Lundquist, representing Families for a Livable Climate. PSC President Brad Molnar led the hearing, with Commissioners Anne Bukacek, Jeff Welborn, and Jennifer Fielder participating. Commissioner Randy Pinocci joined remotely after lunch.
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