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Montana Public Service Commission Supports Consumers Over NorthWestern Energy

Victory: Montana customers protected from multi-million dollar bailout for outdated, dirty coal plants
Electricity transmission lines.
Photo courtesy of Philippe Put
March 30, 2016
Helena, MT —

Yesterday, the Montana Public Service Commission (PSC) sided with Montana consumers when it voted against NorthWestern Energy’s attempt to pass more than $8 million in unfair costs on its customers. Earthjustice, representing the Montana Environmental Information Center and Sierra Club, challenged NorthWestern Energy’s proposal to make consumers pay higher power bills because the Colstrip unit 4 power plant broke down for 6 months in 2013. Instead of investigating other potential options, such as purchasing insurance or seeking recovery from its contractors, NorthWestern Energy asked the Commission to require consumers to pay the costs of the outage.

This is the second time Colstrip Unit 4 has broken down for a 6-month period since NorthWestern Energy bought a small share of the plant in 2009. With the latest outage, NorthWestern sought reimbursement from its customers for both the normal cost of operating the plant (as if it were not broken) and the cost of replacing the power during the outage. In their filings before the Commission, the conservation groups noted that NorthWestern failed to disclose the cause of the outage when it asked the PSC to make its customers pay, waiting until it was forced to do so a full 15-months after requesting rate reimbursement. NorthWestern’s analysis showed the contractor doing work at the plant likely caused the outage.

The PSC staff, in a memo prepared prior to the decision, noted that NorthWestern withheld basic information regarding the cause of the outage, failed to call as witnesses those with the most knowledge about the outage, and failed to conduct a short, reasonably priced test to avoid the outage in the first place.

“This case underscores the fact that the Colstrip plant is neither cheap nor reliable. NorthWestern tried to force customers to foot the bill for shoddy work at the plant. It’s a relief to see the PSC protect Montanans and tell NorthWestern to cover the costs of its careless behavior,” said Derf Johnson with the Montana Environmental Information Center.

"Colstrip is already one of the most expensive resources for NorthWestern Energy and its customers, NWE wanted to stick it to consumers because the plant is increasingly unreliable and NorthWestern was not prepared...again. Thankfully the PSC refused to let them increase rates for an unreliable plant,” said Mike Scott with the Sierra Club, based out of Billings, Montana.

“The Commission recognized what NorthWestern through its actions has denied time and again—that NorthWestern has a duty to its customers to mitigate the risks associated with operating an expensive coal plant,” said Jenny Harbine, Earthjustice attorney representing MEIC and Sierra Club. “The Commission’s decision affirms that it’s not only unjust to shift those risks to NorthWestern’s customers, it is also unlawful.”