NorthWestern Energy rate increase upheld by regulators

Several groups had asked the five-member commission for a do-over, largely on arguments that the rate increase for residential customers and small businesses was too burdensome. The order was approved unanimously.

Commissioners did require NorthWestern to annually provide information about whether its low-income energy assistance programs were benefitting its most financially disadvantaged customers. Additionally, the utility must report on the impacts to residential customers.

The increase has been stepped into rates since October 2022. 

“I wish that prices across the board were not up so high in this country the way they are, but I believe the commission did its best that it could with the parameters that have been given to use under the law,” said Jennifer Fielder, a Republican commissioner from Thompson Falls.

The PSC regulates monopolies, more specifically the state’s largest utilities NorthWestern Energy and MDU. In that capacity, the PSC affects the household budgets of more than 400,000 Montana utility customers. Those customers are legally recognized as “captive,” meaning they lack the free-market choice of shopping around for a better deal.

During a weeklong hearing on the rate hike in April, NorthWestern customers turned out daily to say the increase, $300 a year for an average residential customer, was too much for seniors on fixed incomes, college students and low-income families.

During the hearing, intervening parties made it clear that participation in NorthWestern’s energy assistance programs as flat to declining. There was also no help available for small businesses facing a rate increase of 25%.

In Missoula, there is an eight-year backlog of low-income NorthWestern Energy customers trying to get in the utility’s weatherization program, which according to the Human Resource Council, would help lower home energy costs.

Questioning NorthWestern Energy witnesses for HRC, Diego Rivas pointed out the contractors are also struggling to get weatherization dollars from NorthWestern because of the way the utility manages the funding. The number of customers enrolled in bill assistance programs had been declining, down to 14,000 from 20,000 a decade earlier. But the Human Resources Council, National Resources Defense Council and Northwest Energy Coalition argues there was no indication need for assistance was going down.

Two other requests for reconsidering the rate increase, were meritless, the commission concluded.

The group 350 Montana argued that the PSC hadn’t proven that rates approved Oct. 25, 2023, were reasonable. Instead, the commission produced what it referred to as a “zone of reasonableness” between $71 million and $90.67 million, concluding that so long as the rate increase fell between those amounts the price was acceptable.

Broad Reach Power, developer of one of the largest solar arrays in Montana, argued that the PSC had erred by not giving intervening parties time to review a settlement that established the rates approved Oct. 25. The settlement between NorthWestern Energy, the Montana Consumer Counsel, large industrial customers, the federal government, and Walmart, was filed eight days before a weeks-long hearing on NorthWestern’s requested rate increase was to begin. It was April when the settlement surfaced.