HELENA — NorthWestern Energy and three consumer and environmental groups are asking a judge to void a new rate structure approved by the Public Service Commission that was meant to encourage more energy conservation.
Lee Newspapers of Montana reported Tuesday that the utility and other parties, including the Montana Consumer Counsel, say the PSC had no legal basis when it approved the rate structure that included tiered electric rates.
The tiered rate structure called for customers to pay a lower rate for electricity use of up to 350 kilowatt hours per month, with gradually higher rates for higher use. Customers who used the average monthly amount of 750 kwh would not see a rate change. The Consumer Counsel has argued that many lower-income households who had no way to cut back on consumption would be harmed by the tiered rates.
The PSC also approved a four-year pilot program that would guarantee NorthWestern a minimum amount of revenue, regardless of how much electricity they sell, to encourage company conservation efforts. However, NorthWestern said the PSC arbitrarily cut the company's rate of return from 10.25 percent to 10 percent.
Attorney Ross Richardson said the reduction would cost the company $1.3 million in revenue, hurting its financial ability to serve its customers. The utility also argued that without the pilot program that NorthWestern and others had agreed to, tiered rates aren't needed.
The commission approved the rate case on a 4-1 vote and declined on Dec. 20 to reconsider. At the time, the commission was made up of four Democrats and one Republican. Now it is made up of three Republicans and two Democrats.
Commissioner Bill Gallagher said he expects the commission will direct its legal staff to ask the court to consolidate the challenges into one case and send it back to the commission for further action.