NorthWestern Energy is asking state utility regulators to sign off on the company’s request to increase their customers’ electric bills by $23.8 million for one year. This surcharge is in addition to a $6.5 million rate increase commissioners approved late last month.
NorthWestern says the additional $23.8 million is needed to cover costs the company incurred when it bought electricity on the open market in 2018 while Colstrip Unit 4 was shut down due to air pollution violations. In order to pass that cost onto customers, NorthWestern needs approval from the Montana Public Service Commission.
At a Legislative Consumer Committee hearing Thursday, Robert Nelson with the Montana Consumer Counsel called that period a perfect storm that led to unusually high prices on the open market.
"A gas pipeline was out due to an explosion on that pipeline as the same time as scheduled maintenance was going on in California that blocked any transmission up into the northwest. There was something else that was occurring, and that caused the market prices to really increase for a period of a couple of days," Nelson said.
In written testimony submitted to the PSC in September, NorthWestern’s Director of Energy Supply Market Operations Kevin Markovich wrote the total cost of the 220,000 megawatt hours the company bought from July 2018 through June 2019 was more than $25 million higher than if the Colstrip unit had stayed open.
NorthWestern customers began paying the increased interim rate October 1. A typical residential customer will see an average increase of about $3 on their bill. Customers will be refunded if the PSC doesn’t approve the increase.
The Montana Consumer Counsel and Montana Environmental Information Center last week filed to intervene in the case.