NorthWestern announces stipulation, settlement agreement in Montana electric general rate review

NorthWestern Corporation d/b/a NorthWestern Energy announced Monday that it agreed to settle its Montana electric general rate review request with the Montana Consumer Counsel, the Montana Large Customer Group, the Federal Executive Agencies, and Walmart Inc.

If the Montana Public Service Commission (MPSC) approves the settlement, NorthWestern Energy’s Montana electric rate will increase by 1.23 percent overall, resulting in a $6.5 million annual increase in revenue. The typical residential-electric customer would see an increase of approximately $0.70 per month, or less than one percent on their total bill.

The settlement is based on 49.4 equity capital structure, an authorized return on equity of 9.65 percent (with the exception of the company’s partial ownership in Colstrip Unit 4 which has a lifetime return on equity of 10 percent, per a 2008 Montana Public Service Commission order) and includes all parties who filed comprehensive revenue requirement and cost allocation testimony.

The terms of the settlement specify that NorthWestern extend certain asset lives, which is expected to reduce depreciation expense by approximately $9 million per year. The settlement does not address rate design or questions raised by additional parties concerning NorthWestern’s investment in Colstrip Unit 4.

The MPSC previously granted an annualized interim rate increase of $10.5 million as of April 1. Any difference between interim and final approved rates will be refunded to customers.

NorthWestern Energy filed the general electric rate review request in September 2018. It was the first general electric rate review request for the company since October 2009.