NorthWestern Energy customers will soon experience temporary relief from recent electricity rate hikes. Montana’s largest utility has proposed a new rate structure to state regulators, aiming to replace the late-May increase with a smaller one. This new plan is based on a settlement with the Montana Consumer Counsel and several major customers. If approved, the average household using 750 kilowatts monthly will see a reduction from $119 to $115 on their electricity bills.
The unexpected rollback in rates, hinted at by NorthWestern CEO Brian Bird, caused confusion among Montana’s five Public Service Commission members. The commission grappled with unclear boundaries regarding utility and commission authority and the reasons behind NorthWestern’s decision to backtrack on its self-imposed rate hike. The rate increase implemented in May bypassed regulatory approval based on a rarely used law allowing utilities to adopt proposed rates if the PSC doesn’t act within nine months. Any excessive charges must be refunded with interest.
On July 1, a narrow 3-2 vote by the commission approved NorthWestern’s settlement-based rates. Commissioners Jeff Welborn and Anne “Annie” Bukacek supported Vice President Jennifer Fielder’s decision, following legal counsel Lucas Hamilton’s advice. Hamilton argued retaining higher rates, even those NorthWestern now opposes, would be “absurd.” He asserted that lower settlement rates should be adopted to prevent unnecessary charges.
While PSC President Brad Molnar and Commissioner Randy Pinocci opposed Fielder’s motion, citing insufficient precedent, Molnar expressed concern that the reduction might be a “communications tool” rather than a true cost adjustment. He suggested reverting to interim rates approved last November as the commission reviews ongoing filings and expert testimony related to NorthWestern’s new gas plant and transmission upgrades. Hamilton noted the utility could pursue its original rate request if necessary.
Despite disagreements, the process has prompted open discussions among commissioners, as Molnar highlighted the importance of transparency and precedent in decision-making. As NorthWestern’s latest rate structure takes effect, the commission aims to decide by year-end on the utility’s overall revenue collections. NorthWestern seeks authorization for an additional $164 million annually, with final filings due in the coming months.
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