Dive Brief:
- The proceeding before the Montana Public Service Commission for approval of NorthWestern Energy’s proposed $870 million purchase of a dozen hydroelectric dams, which would increase electric rates by 6.5%, became “complicated” and “acrimonious” when a Montana Consumer Counsel consultant asserted the utility would “unduly profit” from the “above-market return.”
- In asking the PSC to allow his company to recover the cost of the purchase from ratepayers in its decision, expected later this year, the NorthWestern Energy CEO argued the expenditure is in the “public interest” and the reacquisition of the hydroelectric generation sold off by predecessor Montana Power Co. will help rebuild the utility and benefit customers.
- The Consumer Counsel consultant called for changes that will prevent NorthWestern from profit-taking at its ratepayers expense.
Dive Insight:
NorthWestern Energy, which has 340,000 electric ratepayers in Montana, sees this as part of a rebuilding program and argues the hydroelectric power, sold off during the late 1990s deregulation by MPC, can be around “for another 100 years” and provide reliable power at the cost of production.
A PSC attorney noted the utility has agreed to pay $347 million more than the book value of the 11 hydroelectric dams and one storage dam, and suggested the commission might allow the purchase but reduce the amount of money NorthWestern could recover in rates.
When asked by the PSC attorney whether NorthWestern would complete the purchase if its allowed revenues were cut by $4 million per year, the company’s CEO said he would be “very, very sorry” if regulators didn’t approve the entire proposal.
