Montana House Moves to Limit Ratepayer Costs

Two bills designed to restrict how utilities pass costs on to their customers got hearings on January 11 in the Montana Energy, Technology and Federal Relations Committee, according to a report by KPAX-TV in Missoula.

House Bill 189 (Eliminate certain automatic utility rate adjustments), sponsored by State Representative Daniel Zolnikov (R-Billings), would remove a provision known as a “property tax tracker,” that to date has allowed utilities to automatically adjust their rates to account for changes in property taxes.

Supporters say utilities should be required to bring those rate increases before the Montana Public Service Commission, the local news outlet reported.

“I’m not suggesting that we ought not allow NorthWestern Energy to recover those property taxes,” said PSC Chair Brad Johnson, who testified in favor of the bill. “I am suggesting that like other expenses that they come to us with, requesting inclusion in rate base, we ought to have an opportunity to examine those expenses.”

But utility representatives say the current law is needed so companies can deal with large changes in their tax bills.

“The reason there is a property tax tracker in Montana is Montana may be the only state in the United States that imposes such an enormous property tax burden upon the public utilities,” John Alke, an attorney for NorthWestern Energy, told KPAX-TV.

Alke said that NorthWestern’s property tax assessment has jumped from around $100 million in 2014 to $163 million in 2016.

House Bill 193 (Revised utility electric cost recovery), sponsored by State Representative Tom Woods (D-Bozeman), would repeal an exemption that allows NorthWestern Energy to pass on the full cost of purchasing electricity from other sources, KPAX-TV reported.

Woods told the TV station that the exemption dates from the early 2000s, when NorthWestern didn’t own its generation facilities and had to purchase all its power from third parties.

“Times have changed, and the statutes that were written need to change with those times,” he told the news outlet.

The committee did not take immediate action on either bill.

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