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Regulators approve $900 million dam purchase

Published on NewsOK Modified: September 4, 2014 at 5:47 pm •  Published: September 4, 2014

HELENA, Mont. (AP) — The Montana Public Service Commission approved NorthWestern Energy's $900 million plan Thursday to buy 11 hydroelectric dams and charge the cost to its electricity customers.

The commission voted 4-1 to approve the deal after nine months of review, which included public meetings and a two-week hearing in July.

"I'm very pleased to have made the motion and support it," commission Chairman Bill Gallagher said. "The question is benefits, do they outweigh the risk to customers, and I believe there's substantial evidence to that."

Once the deal is finalized, it will immediately increase rates for NorthWestern's 344,500 electricity customers, adding close to $5 more per month to the bill of the average electricity customer.

Commissioner Travis Kavulla, who cast the lone vote against the plan, said he would have liked to have seen conditions on the deal that would cause the utility to "have more skin in the game."

"The motion unamended gives the utility everything they ask for," Kavulla said.

While the approval includes some conditions, the measure doesn't reflect many of the recommendations from the Montana Consumer Counsel, the state-consumer advocacy office. Their experts had said the plan should include compromises that put more of the costs and risk on the company and its shareholders.

Bob Nelson of the consumer counsel said after the decision Tuesday that he thought the costs involved could have been reduced. He had also advocated for a lower profit margin for the company, recommending 9 percent. The approved motion sets as a condition a 9.8 percent return, which Gallagher said was a compromise.

Kavulla and Commissioner Roger Koopman each proposed amendments to the motion that, among other proposals, would have changed the profit margin and reduced costs. All the amendments failed, and Gallagher's motion passed in its original form.

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