SIOUX FALLS, S.D., Dec. 7 /PRNewswire-FirstCall/ -- NorthWestern Corporation d/b/a NorthWestern Energy and the Montana Consumer Counsel today filed a joint stipulation with the Montana Public Service Commission to settle the company's recent general rate case filing. The terms are subject to Public Service Commission approval.
The agreement, if approved, would settle the general rate case filed this past summer in NorthWestern's electric and natural gas utilities in Montana. Terms of the stipulation include:
-- An increase in electric utility delivery service rates of $10 million annually; -- An increase in natural gas utility delivery service rates of $5 million annually; -- NorthWestern Energy will file for an interim rate adjustment to place the stipulated rates in effect as of January 1, 2008, if the processing and approval of this stipulation and agreement by the Commission are not completed by that date; -- NorthWestern will continue to make capital investments in 2008 and 2009 to improve and upgrade existing electric transmission and distribution and natural gas transportation, distribution and storage facilities in Montana in the ordinary course of its business. Of the amounts invested, the Company will not earn a return on $38.8 million. NorthWestern will recover the associated depreciation expense in future rates; -- NorthWestern will provide customers 21 megawatts of unit contingent power from Colstrip Unit 4 at $19/MWh below the Mid-C index price for a period of 78 months. The transaction is contingent upon necessary regulatory approvals; and -- NorthWestern will submit a general electric and natural gas rate filing no later than July 31, 2009 based on a 2008 test year.
The stipulation only relates to the determination of overall revenue requirement. The allocated cost of service and rate design component of the general rate case will be determined in the second phase of the proceeding.
The distribution and transmission delivery rates addressed in this stipulation are those that the company collects to pay for electric and natural gas systems that deliver energy to customer homes and businesses. These costs include depreciation, property taxes, employee wages and benefits, equipment, material, construction, maintenance, etc. Delivery rates account for approximately 42% of an average electric and natural gas residential bill; the remaining 58% is paid to energy suppliers for the electricity and natural gas itself.
NorthWestern's delivery rates have not changed since 2001 when the utility was still owned by the Montana Power Company despite increasing personnel and equipment costs. Energy supply costs and Montana property taxes have also increased during the same period and those changes continue to flow through directly to customers as part of their monthly bill.
The company also recently reached general rate case settlement agreements in its South Dakota and Nebraska natural gas utilities. Those settlements are currently pending regulatory approval in both states. The revenue increase in South Dakota will be $3.1 million annually, starting December 1, 2007, with a confidential settlement on the specific rate elements such as capital structure and the authorized return on equity. The revenue increase in Nebraska will be $1.5 million annually, starting December 1, 2007, with a capital structure as filed and the authorized return on equity of 10.4%.
Management will make a presentation at the Wall Street Access and Berenson & Co. West Coast Utilities conference at 3:45 pacific time on December 13, 2007. The presentation will include discussion on the rate settlements and will be webcast at a link provided on our website.
For more information on NorthWestern Energy's general rate filings and about the value of the energy we deliver, please visit our Website at http://www.northwesternenergy.com/.
About NorthWestern Energy
NorthWestern Energy is one of the largest providers of electricity and natural gas in the Upper Midwest and Northwest, serving more than 640,000 customers in Montana, South Dakota and Nebraska. More information on NorthWestern Energy is available on the Company's Web site at http://www.northwesternenergy.com/.
