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NorthWestern asks for electric rate increase


HELENA - NorthWestern Energy asked state regulators on Monday to approve a 16 percent increase in electricity rates for its Montana customers, about two weeks after the utility called for a 45 percent increase in natural gas rates.

The company is asking that the rate increase be split - with about half going into effect July 1, and the second to take effect July 15.

The July 15 increase is needed to cover growing costs of buying and delivering electricity, the company said. NorthWestern spokeswoman Claudia Rapkoch said the utility won't make any money from the higher rates if they are approved.

''It is not due to anything else other than the fact that right now energy costs are higher than they were in the preceding period,'' Rapkoch said.

The rest of the rate increase - about 8.3 percent - stems from a combination of expected cost adjustments filed with the Public Service Commission in late May.

The largest share of those costs comes from a $30 million credit granted to customers that expires in July. The credit was part of the deal that allowed the Montana Power Co. to sell its electric transmission operations to NorthWestern.

PSC analyst Will Rosquist said that credit amounted to about $3.35 on each customer's bill.

If the 16 percent increase is implemented, Rosquist said a typical Montana residential customer would see their electric bill jump from about $55 to about $64 a month.

Rapkoch acknowledged that customers may be unhappy with repeated reports of the utility seeking higher rates, but said NorthWestern officials have little choice.

''We don't anticipate that people would be very happy with this. It's not something that we prefer either,'' Rapkoch said.

Regulators also are mulling NorthWestern's request for a 45 percent increase in natural gas rates, which the company wants to implement on July 1. That is on top of the 35 percent gas rate increase the commission approved on an interim basis in December.

The PSC hasn't made a final decision on either natural gas request, but at a meeting last week commissioners considered a proposal from Vice Chairman Tom Schneider, D-Helena, that would allow the PSC to reject at least part of the 45 percent increase.

Schneider, Chairman Bob Rowe, D-Missoula, and Commissioner Matt Brainard, R-Florence, criticized NorthWestern at that meeting for seeking the second rate increase rather than signing long-term contracts when prices were lower in 2001 and 2002.

On Monday, Schneider said he was surprised by the request for an 8 percent increase to cover electricity supply costs.

Schneider said customers were likely mad and frustrated by the recent reports of large rate increases.

''This particular case goes right to deregulation and right to the sale of all those energy properties by Montana Power,'' Schneider said.

Rapkoch said the company has asked the PSC to let it adjust natural gas and electric rate monthly instead of yearly to help the company avoid such large one-time increases.


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