HELENA — NorthWestern Energy has announced that they will seek approval from Montana regulators to raise rates for electric and natural gas customers, approximately two years after their last rate review.
This week, the company officially filed a request for a rate adjustment with the Montana Public Service Commission. They are requesting an interim rate increase of about $2 per month for a typical residential electrical user and $5 per month for a typical natural gas user, effective in October. They are also proposing an additional increase to take effect in 2025, bringing the total to around $9 per month for an average electrical user and $9 per month for a gas user.
Crystal Lail, NorthWestern’s chief financial officer, explained that inflation is one of the reasons behind the need for rate increases, citing rising costs for materials, labor, and interest rates.
One of the major factors contributing to the rate increase is the company’s investment of around $1 billion in infrastructure, including the Yellowstone County Generating Station, a 175-megawatt natural gas-fired power plant near Laurel.
The company is looking to recover costs for the YCGS plant, which will also help offset some costs for customers by reducing their expenses for power from the open market.
NorthWestern’s request for an interim rate increase includes seeking to raise nearly $22 million more for electric service, with additional funds allocated for base revenue requirements, property taxes, and power costs. The interim increase would also raise over $21 million for natural gas service.
NorthWestern last initiated a rate review in 2022, with the Public Service Commission approving a final order in October 2023. Prior to that, their last reviews were in 2018 for electrical and 2016 for natural gas.
Lail stated that the company is filing for reviews more frequently in order to prevent sudden significant rate increases for customers, allowing them to plan for smaller impacts more effectively.
NorthWestern is committed to addressing concerns about affordability and encourages customers facing difficulties in paying their bills to reach out for assistance.
The next step is for the PSC to schedule hearings for the proposed rate increases, with the final increase process expected to take about nine months.
NorthWestern serves approximately 405,000 electric customers and 212,000 natural gas customers in Montana.
