Wolf Point Herald

Utilities File Natural Gas Rate Cases With PSC

Montana's two largest regulated energy utilities this week filed requests for natural gas rate increases with the Public Service Commission.
Montana-Dakota Utilities and NorthWestern Energy filed separate rate cases with the commission, which will review the requests and issue final orders in about nine months.
"Rate cases are the most crucial function of the PSC, and we're taking an all-hands-on-deck approach to these important proceedings," PSC chairman
Travis Kavulla, R-Great Falls, said. "It is far too early to make any conclusions about what the utilities are asking for, but ratepayers and utilities alike should know that any request for rate increases will be closely scrutinized."
The filings come amidst historic lows in natural gas prices. The average bill for a residential natural gas customer on NorthWestern's system fell 39 percent in the last four years while the bill for MDU customers dropped 45 percent.
The rate cases filed by the utilities seek to recover the cost of infrastructure that delivers natural gas to customers, however, and not fuel costs.
MDU is seeking to recover increased investments in facilities and associated depreciation, operation and maintenance costs and taxes linked to the new investments, according to the company's filing.
As proposed by MDU, a typical residential customer's bill would increase by $3.37 per month as part of a $3.5 million, or 6 percent, annual increase over current rates.
MDU, which serves about 79,000 natural gas customers, last filed a gas rate case in April 2004. In that case, the commission granted a $125,000 increase, or less than 1 percent.
In NorthWestern's filing with the Commission, a typical residential customer's bill would increase by $5.69 per month as part of a $15.7 million, or 15.13 percent, annual increase over current rates. NorthWestern is seeking to recover increased costs of capital investments to its natural gas system as well as increased costs of operating, administering and maintaining natural gas utility service, according to its filing with the PSC.
NorthWestern serves about 182,000 natural gas customers. In December 2010, in response to the company's last gas rate case, the commission approved a stipulated decrease of $988,963 in the utility's allowed natural gas revenues. The commission allocated that amount with a 1 percent decrease to all customer classes except the storage class, which remained constant.
The recent applications are available online under Dockets D2012.9.100 (MDU) and D2012.9.94 (NorthWestern). The commission has taken no action on either filing.
Interested parties will have an opportunity to formally intervene in both cases and provide testimony on the reasonableness of the requests. The Montana Consumer Counsel represents ratepayers in matters before the PSC.
The commission will likely issue final orders early next summer.
For more information, contact PSC communications/research director Justin Post at 406-444-6171. Follow the PSC at Twitter.com/@MT_PSC or visit Facebook.com/MontanaPSC.