Regulators Hold Hearing On Utility's Colstrip Power Plant Recovery Costs
State regulators Wednesday will start considering whether Montana’s largest electric utility should be able to pass costs on to customers for money it lost in the summer of 2018.
That’s when the Montana Department of Environmental Quality temporarily closed sections of the Colstrip coal-fired power plant over air pollution concerns. Colstrip part-owner NorthWestern Energy lost millions of dollars in the three months the state shut Unit 4 down for noncompliance with the federal Mercury and Air Toxics Standard.
The company hopes to recover the cost of energy supply it had to buy on the open market because of that power loss in addition to making up the difference in expected revenue during the closure, and it’s looking to its customers, ratepayers, for that money.
NorthWestern and intervenors in the case before state regulators estimate the three-month cost recovery somewhere between $1.2 million and nearly $7 million. That would be rolled into NorthWestern’s request of a total of $23.8 million dollars to be passed on to customers for one year to make up for unexpected costs in 2018 and 2019.
The Public Service Commission will consider whether that’ll be allowed during a hearing over the next few days, starting Wednesday.
Northwestern owns a 30 percent share of the Colstrip coal-fired power plant, which Washington-based Talen Energy operates.
Other part-owners based in Washington State are also seeking cost recovery from their customers based on the shutdown of Unit 4 in 2018. NorthWestern requested that documents and testimony from those cases be excluded at the Montana hearing partially because they wouldn’t be able to cross-examine all witnesses in the docket.
At a Tuesday Public Service Commission meeting, staff explained part of the issue with those documents is that they include references to Washington State staff findings and direct quotes from testimony.
Chairman Bob Lake argued that regulatory commissions from other states might not be applicable and he wouldn’t feel comfortable applying their staff reports to Montana issues.
“They have their own way of calculating. They have their own sources of information. Is it interesting? Yes. But the fact is, we have our own staff, we have our own set of circumstances,” Lake said.
The regulatory body voted to keep those documents out of the hearing four to one with Commissioner Roger Koopman against.
Consumer advocate Montana Consumer Counsel and environmental advocacy group the Montana Environmental Information Center argue that NorthWestern should not be granted cost recovery.
They say the shutdown was avoidable and NorthWestern was at fault. NorthWestern argues the opposite.
NorthWestern customers began paying an increased interim rate Oct. 1. A typical residential customer will see an average increase of about $3 on their bill. Customers will be refunded if regulators approve the increase.
The hearing will take place this week. The PSC is expected to make a decision sometime in late summer.
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