PSC Sets ‘Tiered’ Rate Structure for Electricity

By Beacon Staff

HELENA – State utility regulators have approved new “tiered” electric rates for NorthWestern Energy residential customers in an effort to encourage conservation.

Under the rate structure the Public Service Commission approved on a 4-1 vote Tuesday, customers will pay a lower price for power use under 350 kilowatt hours per month, and gradually higher rates as more energy is consumed, Lee Newspapers of Montana reported.

The rate schedule will be about 1.5 percent higher than summertime levels. However, the PSC had approved a temporary rate increase in July that ended up being too high, so customers will see somewhat lower bills as NorthWestern refunds the excess over the next six months.

Commissioner Brad Molnar, R-Laurel, voted against the rate change, saying it was “social engineering” to achieve energy conservation, regardless of how it affects customers.

Molnar argued it would make more sense to education people about conservation measures and let them choose what actions to take to save energy.

Other commissioners argued the new rate structure rewards consumers for using less energy.

Under the new rate structure, customers that use the average monthly amount of 750 kwh, their rate would be unchanged. Those who use less would see decreased rates, while those who use more would see an increase.

The PSC also approved a four-year pilot program that would promise NorthWestern Energy a set amount of revenue for electricity sold to residential and small business customers, regardless of how much energy is consumed. The idea is that the utility will not lose money by promoting conservation programs.

Regulators also approved a very small decrease in natural gas rates, a slight decrease in rates charged to large business customers and a slight decrease in the amount of return that NorthWestern can earn.

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