NorthWestern files hydro compliance report with Montana PSC

BUTTE, Mont., Dec. 10, 2015 /PRNewswire/ — As required by the November 2014 order approving the acquisition of the hydroelectric facilities from PPL Montana, NorthWestern Corporation d/b/a NorthWestern Energy (NYSE: NWE) has submitted its final compliance filing to the Montana Public Service Commission.

The primary purpose of the compliance filing is to adjust the hydro portion of electricity supply rates to remove operating costs related to the Kerr Dam facility that was conveyed to the CSKT in September, update the anticipated revenue credits for 2016 and to reflect the most recent level of actual property tax expense.

When the Commission approved the hydro electricity supply rates last year, it established a fixed annual revenue requirement of $160 million less $43 million in revenue credits for the hydro facilities. The revenue credits came primarily from the sale of excess energy from Kerr Dam that was not needed by the regulated customer base and was used to offset the cost of the hydro facilities collected from customers. As a result of the conveyance of Kerr, sales of excess generation from our generation portfolio and the level of revenue credits available to offset electricity supply costs will be lower in 2016.  

“Our customers received a $2.7 million net benefit from our short period of ownership of the Kerr facility,” said Bob Rowe, President and CEO. “The value of the energy produced by Kerr during the 10-months that we held it exceeded the facility’s revenue requirement thereby meeting one of the sale conditions that the ownership result in a zero or net positive financial impact for customers.”

The amount of hydro facility property taxes already in rates is about $11.4 million based on what the previous owner had paid. The hydro rates are being adjusted to the actual level of 2015 property tax associated with the remaining hydro facilities going forward, which is $14.6 million However, the company is not requesting a true up of the $3.2 million difference in taxes this year in keeping with a commitment it made during the hearings as a condition to approval.

In sum, the combination of all of the adjustments results in a $31.6 million increase in required revenues, which is higher than what is in rates today. The total adjustment to a typical residential customer is a total bill increase of 4.6 percent compared to their December total bill but nearly the same as the November total bill due to the monthly variances in energy supply costs.

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About NorthWestern Energy (NYSE: NWE)
NorthWestern Energy provides electricity and natural gas in the Upper Midwest and Northwest, serving approximately 692,600 customers in Montana, South Dakota and Nebraska. More information on NorthWestern Energy is available on the company’s website at