MTPR

NorthWestern Energy Customers To See Credit After Tax Cuts

Nov 28, 2018

HELENA, Mont. (AP) — NorthWestern Energy customers will soon be seeing a credit on their bills due to the utility's savings under the federal tax cut enacted last December.

The Montana Public Service Commission on Tuesday approved an agreement reached between NorthWestern and consumer groups that calls for a total one-time credit of $20.5 million.

NorthWestern estimates average customers will receive a credit of $24 on their power bills and $3.50 on their natural gas bills within the next 30 days.

The settlement also reduces rates for all natural gas customers by about $1.3 million annually beginning in January and provides funding for low-income energy assistance and weatherization.

"Because our rates are based on the cost to provide the service, changes to those costs eventually flow through to our customer bills when we reset rates in a formal review process," NorthWestern President and CEO Bob Rowe said in a statement.

NorthWestern initially estimated a $14 million benefit after the federal corporate tax rate fell from 35 percent to 21 percent. The utility initially proposed returning about $8.5 million to customers while spending the rest to remove hazardous trees near power lines.

Consumer groups, including the Montana Consumer Counsel, intervened and negotiated a larger refund.

The consumer groups also agreed to support spending on hazardous tree removal as part of NorthWestern's current electric rate review.

Separately, NorthWestern recently announced it was protecting its customers from this winter's higher natural gas prices after purchasing about 9 billion cubic feet of natural gas over the summer and putting it in storage. The utility paid an average of 88 cents per dekatherm while the market price for natural gas last week was $4.65 per dekatherm. 

The utility estimates a typical residential customer will see a 9 percent reduction in their November natural gas bill compared to last year due to the summer purchase along with its ownership of natural gas wells near Havre and a pipeline that brings in lower-priced natural gas from Canada.