Montana: NorthWestern rate case features decoupling, inverted block rates
NorthWestern rate case features
decoupling, inverted block rates
NorthWestern Energy’s rate case, which began in late September, includes two issues of great interest to clean and affordable energy advocates. One is a proposed decoupling mechanism, the other a proposal for inverted block rates, meaning that rates rise with greater use. Montana’s Human Resources Council, District XI, and the Natural Resources Defense Council support both proposals. Both are opposed by the state’s Consumer Counsel.
NorthWestern’s Mountain States Transmission Intertie (MSTI) transmission project has been put on hold by a judicial ruling that the state failed to consult with affected counties as required by the state siting act. It’s not clear whether the state or utility will appeal.
Meanwhile, NorthWestern is talking to the Bonneville Power Administration and the Western Area Power Administration about jointly building the MSTI line. If a deal is reached, the federal agencies could use the line to send power to their customers. NorthWestern has expressed interest is seeking federal recovery act funds or loan guarantees for the project.
NorthWestern has nearly completed construction of its Mill Creek gas-fired generating unit, built solely to help balance its system. Problems with managing the Judith Gap wind project resulted in several reliability violations and forced the utility to go to the market to purchase additional balancing services, which NorthWestern says are getting more and more expensive and scarce.
Utilities, various politicians and some interest groups continue to assail wind development as too costly. Montana-Dakota Utilities, for example, is blaming wind development for the proposed 10% rate hike in its new rate case.
Chuck Magraw, Montana Caucus chair
Why does the Consumer group oppose inverted block rates?
Industry or affluent consumers?
The inclining block rate proposal only applies to residential customers. In fact, the Consumer Counsel (which is not really a “consumer group” as the previous comment indicates, has, in fact, argued that very large residential users of electricity will be hurt by this proposal and has not focused on its benefits to customers that use less energy.