Montana PSC Denies NorthWestern Energy's $42.4M Rate Request

HELENA, Montana — Earlier today, at its regular weekly business meeting, the Montana Public Service Commission (PSC) voted 3-1 to deny a motion by Sioux Falls, South Dakota-based NorthWestern Energy to reconsider a previous Commission decision to deny, in part, and accept, in part, proposed interim rate adjustments regarding NorthWestern’s pending proposal to raise the electric and natural gas rates it charges its customers in Montana.

Previously, in late November the Commission voted to authorize a 7.2% decrease for the company’s electric customers.

President Brown and Commissioners Pinocci and O’Donnell voted in favor of the staff recommendation to deny the motion to reconsider while Commissioner Bukacek voted in opposition to the motion.

On November 26, 2024, the Commission issued Order 7968e which accepted Northwestern’s proposed interim natural gas rate adjustment but denied some of the rate increases sought by the company regarding electricity rates.

In financial terms, Northwestern was seeking an additional $42.4 million in the form of a rate increase from NorthWestern Energy’s electric ratepayers in the interim period while the overall rate case is being investigated and considered by the Commission.

Speaking on behalf of the Commission, PSC President James Brown said, “Our role as Public Service Commissioners is to fairly balance the interests of the shareholders of the monopoly utilities we regulate and the ratepayers of Montana, who are their captive customers. By denying today Northwestern’s request to increase rates during the winter months, the Commission has satisfied its duty. The fact is that NorthWestern’s financial health is not in jeopardy with the interim rates approved by the Commissioner in late November.”

Under Montana law, the Commission has broad discretion to temporarily approve or deny increases or decreases in interim rates during the pendency of an application to adjust rates within generally established principles of monopoly utility rate regulation.

NorthWestern’s motion to reconsider was based, in part, on the utility’s belief that the approved interim rates are, “confiscatory.” In utility rate regulation, rates are only considered to be “confiscatory” when they do not “enable the company to operate successfully to maintain its financial integrity, to attract capital, and to compensate its investors for the risks assumed,” as NorthWestern said in its motion for reconsideration.

However, the record shows that NorthWestern has paid increasing dividends to shareholders every year since 2004, compensating investors for the risks the investors have assumed. The Company’s stock was recently rated a “buy” by a Wall Street financial analysis firm filing that accompanied the motion they submitted to the Commission.

The Commission regulates private investor-owned natural gas, electric, telephone, water, and sewer companies, certain motor carriers, and oversees natural gas pipeline safety and intrastate railroad safety. The Commission works to ensure that Montanans receive safe and reliable service from regulated public utilities while paying reasonable rates.