NW Energy increases electric rates 17% in advance of hearing
Keila Szpaller
(Daily Montanan) NorthWestern Energy electric customers will pay another $17.07 a month on average on their electric bills compared to their current payments with a rate increase the utility instated without regulatory approval.
The increase is legal, but it’s also the first time the monopoly has taken advantage of a statute that allows it to impose a new rate after an application has been pending, said Public Service Commission President Brad Molnar.
“We’re not allowed to stop it,” Molnar said this week.
The Public Service Commission regulates monopoly utilities, and in July 2024, NorthWestern Energy filed an application with the agency requesting rate increases. A hearing will start on Monday, June 9.
However, Molnar said a statute adopted nearly 50 years ago gives NorthWestern Energy the right to increase rates on its own after nine months have passed since applying for an increase, and a spokesperson for the utility said it has been transparent that it would move forward with the option if necessary.
The monopoly utility announced the 16.87% rate increase, an equivalent of $205 a year, in advance of the hearing this month on its upcoming rate case.
NorthWestern Energy blamed its decision on stalled action by the Public Service Commission, but Molnar said the utility set up an impossible schedule from the start, including rolling five separate issues into one application, and it should stop pointing fingers.
The Montana Free Press first reported the self-determined increase.
NorthWestern spokesperson Jo Dee Black said this week the higher rates are temporary until the PSC sets rates. In the meantime, she said NorthWestern needs to “shore up finances.”
“In this case, it’s better for customers, we believe, if the rate increases are gradual,” Black said.
Before it adopted its own increase, NorthWestern Energy had requested the PSC approve a smaller, interim increase, as part of a partial settlement. However, NorthWestern said it would move ahead with its original request if the PSC didn’t respond by May 1.
“As a result of the Commission’s failure to timely grant the unopposed motion, NorthWestern’s as-filed electric rates become effective as a matter of law on May 23, 2025,” the utility wrote in a memo.
Black said the PSC took 14 months to make a decision in two recent cases, and the national average is around nine months. She said the “prolonged” review is creating “significant financial challenges” for NorthWestern.
Molnar, though, said the utility needed multiple attempts to even file an application that met minimum standards, it hasn’t answered questions in a timely fashion, and it included multiple issues in one case.
He said that approach means more work for a small staff, more intervenors, and more questions.
“They are playing the victim,” Molnar said. “They are casting aspersions. They are being derogatory towards my staff.”
The Public Service Commission oversees monopoly utilities in Montana and is charged with ensuring just rates for consumers and a fair return for private companies.
Molnar said the rates are in place until the PSC makes a final ruling on the case after the upcoming hearing — which Black said may not be until the fall.
If the PSC finds that NorthWestern is taking too much money from customers, Molnar said it has to pay back the amount deemed an overage plus 10%, and he questioned why NorthWestern would take that risk if it was in such dire straits.
Black said it wasn’t an easy decision, but the financial health and “strain on cash flow” tipped the balance.
Molnar also questioned how the PSC could take action on the smaller interim rate NorthWestern had submitted since the facts in the case remain in dispute.
“It is time for them to grow up and quit playing the victim and actually take responsibility for their actions,” Molnar said.
Although Molnar had strong words for NorthWestern — and offered to debate their spokesperson and CEO Brian Bird on talk radio — he also said decisions about their case would be made based on the facts, not on emotion.
He also said his job is different than NorthWestern Energy’s.
“They have one legal obligation,” Molnar said. “And they have only one party to serve that, by law, is their investors. They owe nothing to the ratepayers. … The Public Service Commission is elected to represent the people of Montana, to represent all ratepayers, and to represent the utility, and to treat all fairly and without bias.”
The rate case is scheduled to be heard June 9 to 20, although Molnar said this week the time period could be extended based on witness availability.
However, Molnar said the increase will hit lower- to middle-income earners hard, such as people living in an older mobile home without modern insulation.
He said people who are all-electric going into the cooling season will see much higher increases than $20 or so a month.
“This will be crushing to many low-income people, many of whom are simply elderly, that are being handed their butts every day in property tax increases, in utilities, insurance for their houses, insurance for their cars. You name it,” Molnar said. “This is a very, very bad time to be a poor person, and this will make it worse.”
Black, though, said the PSC is hurting NorthWestern Energy by not approving the rate increases it needs. At the end of 2024, she said, the PSC lowered electric rates by 7.45% instead of temporarily increasing them 1.89% as the utility had requested in its original application.
“That interim rate decrease has put NorthWestern Energy’s financial health at risk,” Black said in an email.
In NorthWestern Energy’s most recent earnings call at the end of April, its leaders reported “a solid first quarter,” a “very, very attractive” dividend yield, and significant growth potential in the future.