PSC: NorthWestern Energy must give $20.5M tax-cut windfall back to customers

The Montana Public Service Commission

NorthWestern Energy must return all of its $20.5 million federal tax cut back to ratepayers for their gas and electricity service.

That was the word Wednesday from Montana’s Public Service Commission, which accepted a stipulation negotiated between NorthWestern Energy, the Montana Consumer Counsel and other parties.

“This is a huge victory for the people of Montana,” Public Service Commissioner Brad Johnson said in a written release. “Last December, the commission put our regulated electricity and gas companies on notice that any windfall from the tax cuts President Trump and Congress passed would have to go to the people of Montana, rather than the corporation. Today, that comes to fruition.”

After Congress passed the Tax Cuts and Jobs Act last December, the commission asked regulated utilities to submit plans for how they would get that money back to consumers.

NorthWestern originally submitted a plan that set the total amount of its benefit from the federal tax cut at $14 million.

The company wanted to spend some of the proceeds on rate reductions – or refunds – to customers, and the rest on trimming hazard trees near its power lines.

Several groups representing NorthWestern customers and others intervened in the case, saying the utlity actually would reap a larger tax benefit and should return 100 percent of that money to its customers.

The agreement approved by the PSC listed the total tax savings to NorthWestern at $20.5 million and spent all of the money on either refunds or low-income energy assistance.

Some consumers have left the system in the time between the passage of the tax cuts and the PSC’s approval of the stipulation, making those refunds unpayable. That amount totals about $1 million, which makes up the portion of the tax benefit that will go to low-income energy assistance.

As a result of the agreement, eligible NorthWestern electric customers are likely to see a credit of around $24 on their bill. Eligible gas consumers will receive a credit of $3.50.

“I had some questions about the utility’s original plan,” said vice chairman Travis Kavulla, R-Great Falls. “But this stipulation is in the best long-term interests of all the parties. I’m glad they were able to put this together.”