Rate hikes show need for change on PSC

It was no surprise to open the paper last week and learn that the Public Service Commission had approved a $92 million interim rate increase for NorthWestern Energy. In this case, “interim” means step one of the much larger requested increases amounting to 25.6% for electricity and 11.1% for gas.

If I had to bet, I’d put money on the current members of the Commission approving that increase as well. That’s why we need a change. Beyond the sheer size of the increase, along with the short notice, other aspects of the Commission’s decision are also concerning.

In its Interim Order, the PSC describes the rate increases as “a reasonable means of providing interim relief to NorthWestern.” For 2021, NorthWestern reported net income of $187 million ($30 million more than 2020) and the 2021 compensation for its top six executives was a combined $9 million. These numbers do not strike me as consistent with a company needing relief. NorthWestern is “investor owned.” If its investors gain when the company does well, then they also need to share the risk when the company trips up — even if that means just buying some time.

Also, one commissioner was quoted as saying “If the final bill comes in lower … then a year from now NorthWestern customers would receive a rebate, plus interest…”

The PSC is agreeing to have the ratepayers finance NorthWestern? On the surface, a rebate plus interest sounds great, but it really would be a loan – and I suspect that most Montana families and businesses are not interested in carving out some of their budget to provide NorthWestern a financial cushion. If interest is paid, maybe the rate should be like the one on your credit card.

I also find it interesting that the “final bill” is open-ended. We are in this together with NorthWestern. We rely on NorthWestern to provide safe, reliable energy and I can appreciate that the costs to do so are not always easily predictable, and they do go up. But NorthWestern is a sophisticated company that we also rely on to manage and forecast their costs. Pushing increases to the customers, especially in such short order, should be a last resort – and the PSC should ensure that it is.

Unfortunately, most of us don’t pay attention to the workings of the PSC until it’s too late and it hits our pocketbook. None of this will change until Montanans elect commissioners who have the skills for the job and the will to challenge utilities on behalf of ratepayers.

That’s why I’m running. If elected PSC Commissioner, I will bring my 40 years of business experience and expertise to proactively represent you and make our system of utility regulation work the way it should. Montanans deserve better than what we are getting.

John Repke is running for Public Service Commissioner for District 5. He lives in Whitefish.