NorthWestern Energy Group, Inc., doing business as NorthWestern Energy (NWE), Tuesday announced that it has reached settlement agreements in its Montana regulatory rate review for electric and natural gas services.
The agreements were made with the Montana Consumer Counsel, which advocates for consumers before the Montana Public Service Commission (PSC), along with several large customer groups including Ash Grove Cement, Phillips 66, and Walmart, as well as federal agencies such as Malmstrom Air Force Base.
If approved by the PSC, the settlements would result in moderate increases to customer bills. A typical residential natural gas customer using 65 therms per month would see their bill rise by $4.74, or 9.14%, starting July 1, 2024. Electric customers could expect a $4.63 increase per month, or about 4.21%, assuming regulatory approval of NorthWestern's proposals related to supply costs, the Yellowstone County Generating Station, and state property taxes.
Financially, the settlements are projected to increase annual natural gas base revenues by $18 million and electric base revenues by $66.4 million, not including the Yellowstone County Generating Station. When all factors are considered—including a proposed $94.5 million reduction in the Power Cost and Credit Adjustment Mechanism and a $1.2 million property tax adjustment—the net increase in electric revenue would be $14.6 million. The settlements assume a 9.60% authorized return on equity for natural gas operations and a 9.65% return for electric operations, both with a capital structure composed of 47.8% equity.
As part of the broader settlement package, NorthWestern and the University of Montana have agreed on terms for a new Standby Tariff, which would set rates for customers who primarily self-generate power but rely on NorthWestern for backup electricity. Additionally, the company reached an agreement with the Northern Cheyenne Tribe that outlines the Tribe's involvement in the transition planning for the Colstrip Plant. The Tribe acknowledged NorthWestern's expected majority ownership of the plant as a positive step toward long-term energy reliability and economic sustainability in the region.
Proposals related to the Yellowstone County Generating Station and supply cost recovery were not included in the settlement agreements and will instead be reviewed during a public hearing beginning April 22, 2025. According to Bird, the Yellowstone facility has already led to a reduction in customer rates—more than 5% as of December 1, 2024—and is projected to deliver $4.1 million in annual benefits to Montana customers.
NWE is currently trading at $57.58 or 0.71% higher on the Nasdaq Global Select Market.
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