NorthWestern Energy reaches settlement in Montana for regulatory rate review

NorthWestern Energy (NWE) and certain parties reached a settlement agreement in its Montana electric and natural gas regulatory rate review that has been submitted to the Montana Public Service Commission, or MPSC, for its consideration. In addition to NorthWestern, settling parties include the Montana Consumer Counsel, the Montana Large Customer Group, the Federal Executive Agencies and Walmart (WMT). The settlement includes, among other things, agreement on electric and natural gas base revenue increases, allocated cost of service, rate design, updates to the base amount of revenues associated with property taxes and electric supply costs, and regulatory policy issues related to requested changes in regulatory mechanisms. If approved, the settlement agreement is designed to increase annual electric base revenues by approximately $67.4M, and increase annual natural gas base revenues by approximately $14.1M. The settlement is based on an authorized return on equity of 9.65% for electric operations and 9.55% for natural gas operations, which are consistent with current authorized ROEs, and a 48% equity component of the capital structure.