by Anne Hedges
In September, NorthWestern Energy made an extraordinary request of the Montana Public Service Commission (PSC). It requested permission to engage in a complicated scheme that would essentially result in its existing customers having to pay another $18 million for the costs of operation and maintenance for an additional share of the Colstrip plant before the PSC determines that owning that additional share is “prudent” – a requirement in existing law.
Washington-based utilities, Avista Corp and Puget Sound Energy, are original owners of the Colstrip plant, but both are exiting the plant because it is expensive and counter to the state’s energy goals. Both have cut deals to give their shares of the plant to NorthWestern starting on January 1, 2026. NorthWestern volunteered to take Avista’s share of the plant in Jan. 2023.
Nearly three years later, and right before it takes ownership of the new share, NorthWestern is asking the PSC to use a novel scheme to start charging customers for Avista’s 220 megawatt share of the plant before the PSC has a chance to kick the tires on the deal. NorthWestern had three years to go through the normal acquisition process, but instead waited until the last minute in an apparent attempt to prevent a thorough investigation into whether its customers actually need the extra electricity and whether the electricity from the Colstrip plant is affordable. Instead of following the long-established process to charge customers for the additional share of this expensive, outdated, and frequently-broken plant, NorthWestern is trying to do an end run around the public and the PSC.
In September, NorthWestern requested the PSC approve its scheme to use the Power Costs and Credits Adjustment Mechanism (PCCAM) to charge customers for operation and maintenance costs for the new share of the plant. PCCAM is supposed to be used for fuel costs and market purchases and sales, but under NorthWestern’s proposal, revenues that should be passed back to customers through the PCCAM would instead be diverted to pay for NorthWestern’s additional share of the Colstrip plant. NorthWestern is using this expedited mechanism to bypass traditional rate-making procedures. This truncated process leaves very little time and ability for PSC staff, MEIC, or the Montana Consumer Council to ask questions, receive answers and verify that this type of scheme is legal and truly benefits existing utility customers.
In October, Earthjustice, on behalf of MEIC and Sierra Club, intervened in this docket to get some answers, protect existing customers from suffering from ever escalating electricity bills, and force NorthWestern to use the appropriate mechanism to establish whether it’s actually in customers’ interest to pay the ever-escalating costs for operation and maintenance of the Colstrip plant.
This article was published in the December 2025 issue of Down To Earth.
