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NorthWestern gets OK for 6.4 percent rate hike

Published on NewsOK Modified: June 17, 2014 at 5:38 pm •  Published: June 17, 2014

HELENA, Mont. (AP) — Montana utility regulators on Tuesday approved a NorthWestern Energy request to boost electricity rates by 6.44 percent starting July 1 so the company can recover $32 million in underestimated supply costs.

Public Service Commission members said it is an interim increase and whether it remains will be contingent on further study. The money can be returned if commissioners find the increase wasn't justified, commissioners said.

NorthWestern officials say the company's rates don't reflect actual market costs over the last 12 months. NorthWestern spokeswoman Claudia Rapkoch said the termination of a power-supply contract with PPL Montana represents the bulk of the $32 million the company is trying to recover in costs.

"Ultimately the customers will pay what is incurred on their behalf," Rapkoch said.

Also included in that $32 million is electricity purchased on the market after a Colstrip power plant unit went offline for about six months. NorthWestern owns 30 percent of Colstrip Unit 4.

The PSC estimated the Colstrip outage cost $11 million, though Rapkoch said she could not confirm that.

Commissioner Travis Kavulla was the lone dissenter in the 4-1 vote for the interim rate hike. He said the cost of the Colstrip outage should not be included in any rate adjustment.

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