Montana utility regulators say NorthWestern Energy must spend at least $3.2 million a year on removing trees near power lines. Regulators are worried that power company equipment could spark flames similar to the devastating wildfire in California last year that killed more than 80 people and destroyed the town of Paradise.
The Public Service Commission created the minimum amount NorthWestern must spend on its hazard tree removal program in one of the final steps of the company’s massive docket before the regulators.
During the rate case expected to wrap up before the end of the year, regulators will give final approval for costs NorthWestern Energy can pass on to its customers.
According to a PSC staff memo, regulators are concerned about wildfire risks from increasing numbers of pine-beetle-killed trees near power lines that could lead to fires similar to those recently seen in California.
In a meeting with reporters Tuesday, PSC Chairman Brad Johnson says NorthWestern has been “extremely responsible” in managing vegetation near power lines.
"But look no further than California to see the potential of failed efforts to adequately manage vegetation along these corridors," he said. "When you’ve got major utilities declaring bankruptcy because of this, it’s something that says we better pay real close attention, and I think we are."
Following the fires in California last year, the utility company PG&E faced an estimated $30 billion in liability and bankruptcy.
NorthWestern currently holds a $300 million liability insurance plan. And according to company's testimony before regulators, wildfire liability coverage has become less available and more expensive.
NorthWestern can spend more than the $3.2 million per year if the company wants to, and can ask approval from regulators later to pass those costs on to its customers.
Regulators this week gave initial approval on the plan to require the utility to file annual progress reports on it’s hazard tree removal program.