Montana lawmakers work to curb utility rate increases
Montana lawmakers want greater scrutiny on costs utilities frequently pass on to customers, arguing that energy companies may be abusing laws meant to offer tax relief.
Two bills designed to restrict how utilities charge customers received hearings last week before Montana’s House Energy, Technology and Federal Relations Committee. House Bill 189 would eliminate a provision known as the “property tax tracker” which allows utilities to automatically adjust rates to account for property tax increases, and instead require state regulators to review the changes.
The legislation is in response to the discovery by the state Public Service Commission (PSC) that Montana-Dakota Utilities (MDU) and Northwestern Energy have been using the law to pass through tax increases onto customers. During a recent hearing, the PSC discovered a $150,000 mistake in an MDU tax filing, according to Commissioner Travis Kavulla.
“Because of the very short timeline on these proceedings, the PSC basically stumbled across the fact that they were trying to include this cost,” Kavulla said to KGVO.com. “MDU had kind of hidden it within the lines of their application and the PSC is lucky to have discovered it. If they had not discovered it, that amount of money too would have been included in the rate increase and that amount would have been irreversible.”
“Restaurants can charge whatever they want, gas stations can charge whatever they want, but we don’t usually give monopolies with a captive customer base the ability to raise their own rates based on whatever they say they should be, and that, effectively, is what we have here,” Kavulla said.
The second bill would directly impact Northwestern Energy by repealing an exemption that allows the company to pass on the cost of purchasing electricity from other sources. The bill’s sponsor, Rep. Tom Woods (D-Bozeman), argues that the exemption was created before Northwestern owned its own generation facilities.
“Times have changed, and the statutes that were written need to change with those times,” Woods added.
Representatives of MDU and Northwestern spoke out against the bills, saying that the property tax legislation is necessary to offset high costs of property tax changes, while the second legislation would give too much authority to regulators.
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