PSC Says ‘No’ to Passing Colstrip Costs on to Consumers

The Montana Public Service Commission voted 3-2 Tuesday to disallow costs related to a 2013 outage of Colstrip Unit 4 to be passed on to NorthWestern Energy’s customers. At issue was an estimated $8.2 million in electricity market purchases made by NorthWestern Energy.

“Consumers shouldn’t bear the risk of paying for a potential outage if the utility doesn’t take all the prudent steps to prevent it, and that is exactly what happened here,” said Commissioner Koopman, R-Bozeman, who made the motion to exclude the outage costs from rates. “I do not support the attitude that ratepayers should cover the costs of a utilities bad decisions, and the Commission made the correct determination today within the law that guides us.”

NorthWestern Energy is authorized by law, pending commission approval, to use a mechanism known as an “electricity tracker” to recover through rates “prudently incurred” costs associated with serving their customers. The commission, however, found that the market purchases in question did not meet the requirements under state law for NorthWestern to pass the costs on to ratepayers.

The Commission expects to issue a final order by mid-May that explains in full the rationale of the decision.