By Anne Hedges
How much should electricity bills increase for residences and small businesses? 11%? 18%? A whopping 28%? It seems every time we turn around, NorthWestern Energy wants to raise our rates even higher.
The Public Service Commission (PSC) is currently deciding the size of Montanans’ electric rate increase after holding a two-week hearing in April. Each day of the hearing, members of the public gave the PSC an earful about the hardship that higher electricity bills are causing and the harm that would result if rates go even higher. Reminiscent of every movie supervillain, NorthWestern executives have no shame about harming those who are already struggling to pay their electricity bills.
Last summer, NorthWestern Energy asked the PSC to approve a 25% rate increase for residential customers and small businesses. By October, NorthWestern had convinced the PSC to allow it to increase customers’ bills by 11% on an interim basis while the larger increase was considered. Over the winter, public anger at that increase was palpable; what they didn’t know is that the 11% increase was just a stepping stone to far higher rates.
In a surprise announcement the week before the hearing, NorthWestern said it had reached a deal with large industrial customers (refineries, cement kilns, etc.), Walmart, and the Montana Consumer Counsel. The settlement proved the old saying that if you aren’t at the table, you are on the menu. While the settlement was extremely vague on details, it was quite clear on who NorthWestern thought should bear the burden of financing its mismanaged utility. And while NorthWestern’s announcement of the settlement claimed that residential customers and small businesses would see an 18% rate increase, it failed to tell the whole story.
At the end of a frustrating first day of the hearing, MEIC’s attorney, Jenny Harbine with Earthjustice, requested NorthWestern provide a spreadsheet showing how much rates would increase under the settlement for each customer class compared to customer rates before rate case. The PSC agreed to her request. Despite its reluctance, NorthWestern provided those figures the next morning, which showed that the real increase for the average Montanans would be 28%. The 18% figure was just the amount above the interim increase the PSC approved in October.
Long story short, the settlement was great – for the settling parties. Large industrial customers would see no rate increase, and Walmart would see a small one. The lion’s share of the rate increase would be shouldered by residential customers and small businesses. At one point in the hearing, Commissioner Randy Pinocci asked a witness whether it was fair to impose such a large increase on customers and no increase on Exxon Mobil, despite the oil and gas company’s record profits over the last several years.
This is the largest rate increase in memory, yet the Commissioners did not ask a single question of NorthWestern’s CEO. When Dr. Steve Running, climate scientist and Nobel Laureate, spoke about the need for NorthWestern to consider the climate crisis in its resource portfolio, the Commissioners peppered him with questions about climate science, foreign countries’ energy systems, and the environmental impacts of renewable energy.
Perhaps nothing highlighted the failed leadership of NorthWestern as much as the answer to a question from 350 Montana’s attorney, Monica Tranel. When she asked NorthWestern’s Director of Long Term Resources, Bleau Lafave, if he believed that human activity contributed to climate change, Lafave said he did not believe human activity was a “major influencer in overall climate.” If the person in charge of planning for NorthWestern’s future energy supply does not believe that its burning of coal and methane gas contributes to the climate crisis, then Montanans are stuck with a utility that is woefully ignorant of basic science and uninterested in the need to modernize the energy system.
It gets worse. The 28% rate increase is just the beginning of what NorthWestern has planned for your money. In the proposed settlement, NorthWestern agreed to remove all of the “riders” in the rate case, which would have allowed it to charge customers for such things as the methane gas plant on the banks of the Yellowstone River near Laurel. In 2021, NorthWestern sought preapproval from the PSC to build the plant and charge customers, but it withdrew that request five months later. Then it tried to use the rate case to charge customers for the plant before it was built, but that was effectively withdrawn with the settlement proposal.
Now, NorthWestern says it intends to return to the PSC in two separate proceedings to request approval to charge customers for the new gas plant. In the fall, it will seek approval to charge customers some undefined portion of the plant’s costs. This process, known as Power Costs and Credits Adjustment Mechanism (PCCAM), is normally reserved for annual true-up costs between what the utility expected to spend in a year and what it did spend. The PCCAM process is simply not designed to analyze and approve new power plants. When NorthWestern decides to request another rate case in the future, it will include the remaining gas plant costs. Anyone concerned about the cost and impacts of the plant will have to engage in two separate PSC dockets in order to learn what the actual costs of the plant will be and to prevent unnecessary costs from being passed on to customers, resulting in all parties and the PSC wasting scarce resources trying to patch together the true cost of the plant.
These cost increases don’t even include the cost of NorthWestern’s proposed acquisition of a larger share of Colstrip – an old, dirty, and exceedingly expensive coal plant (see our article in March’s Down to Earth).
Simply put, most Montanans cannot afford this mismanaged, climate-denying utility. Yet the Montana Legislature bent over backwards to give it almost everything it wanted and never once asked what it was doing to keep costs down for the average Montanan. Let’s hope the PSC shows a little more concern for their constituents.
This article was published in the June 2023 issue of Down To Earth.
