ASMSU condemns proposed rise in NorthWestern Energy’s utility rate

MSU’s student senate has condemned a proposed utility rate increase by NorthWestern Energy in an effort to urge the company to pivot away from expensive and environmentally damaging electricity generation. 

NorthWestern filed the request to increase electricity rates with Montana’s Public Service Commission (PSC), which regulates the state’s utilities, in the fall of 2022. The commission has scheduled a vote on the request during a public hearing on April 11. 

The PSC approved an interim 12.6% electricity rate increase in Oct. 2022 until a decision on the filing is reached. For now, the rate increased an average of $11.19 per month, according to NorthWestern spokesperson Jo Dee Black, meaning the average home will pay an additional $134.28 in electricity bills from Oct. 2022 to Sept. 2023.

The proposed 25% increase in electrical rates would raise prices for customers consuming an average of 750 milliwatt hours per month an additional $273.12. An added proposed rate increase of 11% for natural gas would add an additional $90.84 to customers who use an average of 65 therms per month, according to reports from multiple news sources.

The rates to deliver natural gas and electricity to NorthWestern’s customers are based on cost information from 2015 and 2017 respectively, Black said. The regulatory rate review is to be considered as an update to assets needed to deliver energy service to customers “reliably, safely, and at the most affordable rates,” she said.

The Associated Students of Montana State University (ASMSU) condemned the rising utility rate in the form of a resolution submitted as a public comment to the PSC, said Calvin Servheen, sponsor of the resolution and ASMSU senator for the College of Engineering. The PSC could, theoretically, decline the rate increase.

“The university isn’t the target audience,” Servheen said. “It’s explicitly a public comment to the Public Service Commission.” 

Roughly 10,000 off-campus MSU students already struggle to afford to live in Bozeman, according to the resolution. Additionally, it states that NorthWestern Energy is without a state competitor, leaving students and homeowners no other financial options as the utility rate increases.

According to the resolution, at the same time as carbon-free energy is becoming cheaper across the country, NorthWestern is increasing its ownership in non-renewable sources. The resolution said the company should make a rational transition away from expensive, non-renewable energy, and move towards less expensive renewable energy. 

NorthWestern’s reported carbon-free electricity generation is currently 59% in the state of Montana, according to spokesperson Black. For comparison, the generation of zero-carbon power is 40% nationally, according to the U.S. Energy Information Administration. 

The company’s carbon-free electricity generation is down 10% from 2020 based on a decrease in hydroelectric and wind energy output, Black said. For hydroelectricity specifically, “2021 was a lower water year from 2020, so the 10% decrease can be attributed to less water coming through the dams,” she said.

The Office of Sustainability was able to track this decrease through a program called SIMAP, or Sustainability Indicator Management Analysis Platform, said Nick Fitzmaurice, resolution collaborator and former ASMSU senator. The program consists of three scopes, the second of which tracks purchased electricity; in this case, the electricity MSU has purchased from NorthWestern Energy.

“Although [the university was] using less electricity, the electricity that we were buying from NorthWestern became dirtier, and therefore overall emissions that we take credit for increased,” Fitzmaurice said.

Utility-scale wind and solar have surpassed the affordability of coal and natural gas generation, according to Lazard’s Levelized Cost of Energy Analysis. 

However, “energy is different than capacity,” Black said. Although wind and solar are the most cost-effective, when those sources do not generate enough energy to satisfy customer demand, such as on colder days in the winter, NorthWestern depends on the energy market to meet capacity needs.

Additionally, the Inflation Reduction Act of 2022 includes tax credits for generating and storing renewable energy, such as the Clean Electricity Investment credit and the Clean Electricity Production credit, according to the IRS website.

The best-case scenario would be that the PSC declines the rate increase, Fitzmaurice said. They would have to review and approve NorthWestern’s strategic plan for energy production, which could trickle into an investigation into why NorthWestern chooses to produce unsustainable energy when cleaner energy could be produced at a cheaper cost, he said. “People should know that their electricity is going up and why, and then there’s an opportunity for public comment.”

The PSC will hold public comment on April 11, according to the resolution. ASMSU is also planning on having students attend when Senate Speaker Paytyn Wilson travels to Helena to give a comment, Servheen said.