The Montana Public Service Commission on Tuesday voted 3-2 to stop NorthWestern Energy from passing on costs related to a 2013 outage at the Colstrip power plant to consumers through a rate increase.
After a malfunction shut down Unit 4 at Colstrip, NorthWestern Energy had to buy $8.2 million of electricity on the market to make up for the loss of power and meet Montana consumers’ demands.
The utility is allowed by law, with commission approval, to recover by raising rates costs incurred while serving customers. But the commission last March found that the $8.2 million NorthWestern spent to buy power on the market didn’t meet requirements to be passed along to consumers.
Commissioners Brad Johnson, R-East Helena; Roger Koopman, R-Bozeman; and Travis Kavulla, R-Great Falls, voted to reject NorthWestern’s request for reconsideration. Commissioners Bob Lake, R-Hamilton; and Kirk Bushman, R-Billings, dissented.
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“I’m not sure what part of ‘no’ NorthWestern doesn’t understand,” Koopman said in a press release. “Certainly, they had a right to bring this before us again. But as strong as some of us felt that the … outage was avoidable, and that the utility should have exercised greater prudence, the company needed to bring us some very compelling new arguments. Clearly, they did not.”
Koopman is running for re-election in District 3 against Democrat Pat Noonan and Independent Caron Cooper. Lake is running for re-election in District 4 against Democrat Gail Gutsche.
NorthWestern spokesman Butch Larcombe said the utility doesn’t agree with the decision.
The utility didn’t have outage insurance that would have covered some costs because it believed the price of the insurance was prohibitive.
The Montana Consumer Counsel and the Montana Environmental Information Center argued NorthWestern should have explored outage insurance to protect ratepayers and investigated making the a manufacturer, Siemens, pay for the electricity the utility had to buy. The core malfunctioned after routine maintenance.
Larcombe said NorthWestern doesn’t agree with those opinions. MEIC has sued the state over coal ash at Colstrip and strongly supported moving away from coal-fired power.
Larcombe said other owners at Colstrip asked their states’ public service commissions to let them pass along some of the costs, and those commissions allowed it.
NorthWestern hasn’t decided how to proceed after Tuesday’s vote.
In dissent, Lake said “I fully support legitimate reasons to reduce electricity rates for consumers, but I do not believe the commission had the legal authority to do what we did in this situation.”
