Tranel on rate hike

By Monica Tranel

As the first snow is falling, and freezing temperatures hit, we are getting pummeled with another huge energy rate increase, thanks to the five Republicans on the Montana Public Service Commission.

Recently the Commission unanimously approved a 28% rate increase from last year, the majority of which will fall on small businesses and residential users – renters and homeowners. This historical rate hike went into effect Nov. 1 – meaning that the heat you need right now is costing you nearly one-third more than what you were paying before this case was approved.

What are Montanans getting for the $100 million rate heist?

No new generation. Despite the nine-figure price tag, there is no new generation in this increase. The majority of NorthWestern’s generation comes from 100-year-old dams. We paid $400 million for Colstrip in 2008, when it was nearly 50 years old and had a book value of less than $50 million. NorthWestern’s shareholders benefitted, Montanans paid. 

This $100 million rate hike does not pay for new generation. But NorthWestern plans to separately ask for more than $300 million for its new gas plant.

Taxes and rate hikes on the backs of Montana’s small businesses, homeowners, and renters. First, the Republican-controlled legislature raised our property taxes, and now the five Republicans on the Commission are saddling Montana residents with a 28% increase for cooking and heating.

It gets worse. A last-minute settlement NorthWestern reached with Walmart, the federal government, and a large refinery protected those large customers from the bulk of the rate increase. 

The result? Montana’s small business, hospitals, and residential customers will bear almost all of the $100 million hike.

Wasteful spending to make NorthWestern’s executives feel better. When NorthWestern was asked why a monopoly needs to advertise, the response was that it’s seen as a dirty utility and its beneficial for customers to see the utility the way management sees it. Montana law prohibits a utility from passing advertising like this to customers, but the Commission allowed the expenses in the $100 million rate hike.

What is NorthWestern getting?

Money, and lots of it, for executives and shareholders. Thanks to the all-Republican Commission, the $100 million hike includes huge bonuses for NorthWestern’s executives. 

NorthWestern’s five highest paid Montana management executives are paid over $8 million a year. The rate hike includes more than $7 million in bonuses to these executives, which Montanans will pay for as a “cost of service.”

In addition, the Commission is forcing cash-strapped Montanans to gift New York hedge funds nearly $3.5 million a year. 

NorthWestern’s actual cost of debt on Colstrip is 4%. But the Commission is making us pay rates “as if” the cost of debt is over 6.5%. The difference between the actual debt cost and the “fake” cost set by the Commission is nearly $3.5 million every year. 

That means NorthWestern’s shareholders get millions every year as sheer profit from Montanans who are just trying to heat their homes.

Purchased politicians. NorthWestern’s corporate PAC contributes to Ryan Zinke’s campaign. While taking money from NorthWestern, Zinke voted to cut funding for low-income heating assistance by more than 75%.

How many times do you have to be hit on the head before you find out what’s hitting you? If you’ve had enough already, hold our elected officials accountable. Let’s vote for people who will work for us, the people, and put the interests of our communities above profits for monopoly corporations. 

Monica Tranel is an attorney and candidate for Montana’s western District for U.S. Congress.