NorthWestern Energy, intervenors reach settlement on Montana NG rate request
NorthWestern Energy has reached an agreement with the Montana Consumer Counsel and the Large Customer Group in regard to its requested increase in its natural gas delivery service and production rates in Montana. The three parties are asking the Montana Public Service Commission to approve the agreement. NorthWestern Energy has made sizable investments in its Montana natural-gas production, transmission and distribution system in recent years, seeking to maintain safety and service reliability and comply with federal requirements. Since 2005, that investment has increased by $300M to over $742M currently. During that same period, a typical residential customer's bill, using 100 therms per month, decreased from approximately $106.59 in 2005 to $74.11 currently, due in large part to declining natural gas supply costs. If approved, the agreement would result in an approximately 2.9%, or $2.12 increase per month, to $76.23. While customers have benefited from natural gas bill decreases in recent years, NorthWestern is seeking the rate increase due to the increased investment in the system and the increased costs of operating, maintaining and administering a safe and reliable natural gas system across Montana. The overall increase in delivery services and production charges in the agreement is $5.7M, based upon a 6.96% rate of return (9.55% return on equity, 4.67% cost of debt and 53.2% debt to rate base). NorthWestern requested an increase of $10.9M in its initial application last fall.