NorthWestern Energy CEO Bob Rowe told state regulators Thursday that the company’s $900 million plan to purchase 11 hydroelectric dams and charge the cost to its electricity customers is solid.
Rowe told the Montana Public Service Commission, which must decide how and whether to approve it, the cost of the deal is actually $870 million and said the dams are an “extraordinary set of assets.”
He said it makes sense for NorthWestern to purchase them from current owners PPL Montana.
“We have tried to put together something that really does make sense,” Rowe said. “If the commission can’t get to the point that $870 million (should be approved) to dedicate these assets to the state of Montana for perpetuity, then I’m really sorry.”
He also said he’s surprised the decision whether to approve the proposal has become “complicated, acrimonious litigation,” and should instead be fairly straightforward.
A consultant for the Montana Consumer Counsel said previously if the Public Service Commission approves the deal without changes, NorthWestern will get guaranteed profits and ratepayers will pay above-market prices for many years.
Rowe said that testimony made NorthWestern seem like a “bunch of crooks,” and that the company has worked hard to build a financially sound company.
PSC attorney Justin Kraske noted that NorthWestern has agreed to pay a price $347 million more than the book value of the 11 hydroelectric dams and one storage dam, and asked whether NorthWestern could accept a decision that reduced the amount of money it could recover in consumer rates.
For example, would NorthWestern walk away from the deal if the PSC decided to reduce the company’s revenue by $4 million a year, he asked.
Rowe said he would be “very, very sorry” if the commission couldn’t approve NorthWestern’s entire proposal.
The dams, which are on the Missouri, Madison, Flathead and Clark Fork rivers and West Rosebud Creek, were built from the 1940s to the 1960s. They were owned by the Montana Power Co. until PPL bought them during deregulation in the late 1990s and early 2000s. Combined, the 11 dams have capacity to generate 633 megawatts of electricity, or as much as a large coal-fired power plant.
The five-member PSC has spent the last two weeks questioning company executives about the proposal, which would increase electric rates by 6.5 percent, or about $5 more per month for the average electricity customer. The hearing ended Friday morning and commissioners have until mid-September to deny the sale, approve it as-is or approve it with conditions.