Montana PSC denies NorthWestern Energy’s Colstrip outage cost recovery

The Montana Public Service Commission voted 3-2 against a request from NorthWestern Energy on Tuesday for residents to pay for costs associated with the Colstrip Unit 4 outage in 2013.

The Colstrip Unit 4 facility had a core malfunction in 2013, resulting in an outage. As a result, the company made $8.2 million in electricity purchases to keep Montana homes powered. The claim NorthWestern filed was to recover the costs for the electricity purchase. NorthWestern had the ability to preemptively bill its consumers for the costs associated with the outage and did so. Because the claim was denied, however, NorthWestern Energy must issue refunds to its customers.

“There was no evidence presented in this proceeding that proves to me that ratepayers should have to pick up the tab for the outage of this plant,” PSC Chairman Brad Johnson (R-East Helena) said. “There were numerous steps that NorthWestern could and should have taken to protect their customers in the event of an outage, and unfortunately, they failed to do so.”

PSC representatives who voted against the claim approval said that NorthWestern could have offered insurance to ratepayers to cover such associated costs. The company could have also pursued payment from Siemens under warranty, as the outage occurred immediately following maintenance executed by Siemens reps.

NorthWestern allegedly neglected to fully disclose the details of the outage in its application for cost recovery, including the absence of a Root Cause Analysis. The PSC is expected to issue a final order by the middle of May, disclosing the full rationale behind its decision.