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Montana-Dakota Utilities Files Settlement with PSC for $7.4M Rate Increase

February 25, 2016 By Cheryl Kaften

Montana-Dakota Utilities (MDU) – which provides retail natural gas and electric service to 384,000 customers in parts of Montana, North Dakota, South Dakota, and Wyoming – filed a Stipulation and Settlement Agreement (Docket No. D2015.6.51) on February 8 with the Montana Public Service Commission (PSC) to raise its general rates in the Big Sky State part of its territory.

The revised filing is being made “to resolve all of the issues raised” when MDU last June 25 proposed a revenue increase of $11.8 million – or 21.1 percent – to be absorbed by its 25,840 electric customers in 30 Montana communities. The requested raise would have been allocated equally to each rate class – increasing the bill of the average residential customer by about $14.80 per month.

In addition, the utility had asked for a new demand charge, to be levied against net metering customers.  Customers on the standard residential electric service rate would not have faced a demand charge.

However, in the interim, The Alliance for Solar Choice (TASC) and MDU reached an agreement to strike all proposed tariff revisions for a demand charge for net metering customers. MDU then filed a settlement with the Montana Consumer Counsel and the Large Customer Group.

TASC spokesperson Sarah Wolfe commented, “Demand charges like what MDU proposed eliminate customers’ ability to go solar. MDU’s attempt to stop solar competition through this charge was unsupported by any evidence. Just last month we saw a solar charge overturned by the Wisconsin courts due to lack of evidence.”

Indeed, the proposal by MDU generated a notably high number of public comments from residents who were concerned that the fee would make investing in solar more costly. Commission staff received 115 comments by email opposing the charge; and, at a public hearing in Miles City in September, eight people testified against the charge. No public comments supporting the solar fee were submitted to the commission.

“The utility now is asking for a 13.3 percent rate hike overall, or about $6.38 extra on the monthly bill of the average residential customer” MPSC Communications Director Eric Sell told Retail Energy Buyer. “That works out to $7.4 million, to be phased in over two years.”

The first increase of $3 million would be effective this April 1; the second, of $4.4 million, would be phased in on April 1, 2017.

The people won here today,”  Jean and Floyd Dahlman, Rosebud County ranchers and long-time MDU customers, told TASC. “This settlement proves that MDU’s proposed fee on customers who generate their own power was, in fact, unjustified and unnecessary. Individuals have the right to invest in small-scale wind or solar on their property without needless barriers.”

A final order on this docket is expected by March 25, 2016, Sell said.

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