Preliminary rate settlements reached in South Dakota and Nebraska
SIOUX FALLS, S.D., Dec. 7 /PRNewswire-FirstCall/-- NorthWestern
Corporation d/b/a NorthWestern Energy (Nasdaq: NWEC) and the Montana Consumer
Counsel today filed a joint stipulation with the Montana Public Service
Commission to settle the company's recent general rate case filing. The terms
are subject to Public Service Commission approval.
The agreement, if approved, would settle the general rate case filed this
past summer in NorthWestern's electric and natural gas utilities in Montana.
Terms of the stipulation include:
-- An increase in electric utility delivery service rates of $10 million
annually;
-- An increase in natural gas utility delivery service rates of $5
million annually;
-- NorthWestern Energy will file for an interim rate adjustment to place
the stipulated rates in effect as of January 1, 2008, if the
processing and approval of this stipulation and agreement by the
Commission are not completed by that date;
-- NorthWestern will continue to make capital investments in 2008 and
2009 to improve and upgrade existing electric transmission and
distribution and natural gas transportation, distribution and storage
facilities in Montana in the ordinary course of its business. Of the
amounts invested, the Company will not earn a return on $38.8 million.
NorthWestern will recover the associated depreciation expense in
future rates;
-- NorthWestern will provide customers 21 megawatts of unit contingent
power from Colstrip Unit 4 at $19/MWh below the Mid-C index price for
a period of 78 months. The transaction is contingent upon necessary
regulatory approvals; and
-- NorthWestern will submit a general electric and natural gas rate
filing no later than July 31, 2009 based on a 2008 test year.
The stipulation only relates to the determination of overall revenue
requirement. The allocated cost of service and rate design component of the
general rate case will be determined in the second phase of the proceeding.
The distribution and transmission delivery rates addressed in this
stipulation are those that the company collects to pay for electric and
natural gas systems that deliver energy to customer homes and businesses.
These costs include depreciation, property taxes, employee wages and benefits,
equipment, material, construction, maintenance, etc. Delivery rates account
for approximately 42% of an average electric and natural gas residential bill;
the remaining 58% is paid to energy suppliers for the electricity and natural
gas itself.
NorthWestern's delivery rates have not changed since 2001 when the utility
was still owned by the Montana Power Company despite increasing personnel and
equipment costs. Energy supply costs and Montana property taxes have also
increased during the same period and those changes continue to flow through
directly to customers as part of their monthly bill.
The company also recently reached general rate case settlement agreements
in its South Dakota and Nebraska natural gas utilities. Those settlements are
currently pending regulatory approval in both states. The revenue increase in
South Dakota will be $3.1 million annually, starting December 1, 2007, with a
confidential settlement on the specific rate elements such as capital
structure and the authorized return on equity. The revenue increase in
Nebraska will be $1.5 million annually, starting December 1, 2007, with a
capital structure as filed and the authorized return on equity of 10.4%.
Management will make a presentation at the Wall Street Access and Berenson
& Co. West Coast Utilities conference at 3:45 pacific time on December 13,
2007. The presentation will include discussion on the rate settlements and
will be webcast at a link provided on our website.
For more information on NorthWestern Energy's general rate filings and
about the value of the energy we deliver, please visit our Website at
http://www.northwesternenergy.com.
About NorthWestern Energy
NorthWestern Energy is one of the largest providers of electricity and
natural gas in the Upper Midwest and Northwest, serving more than 640,000
customers in Montana, South Dakota and Nebraska. More information on
NorthWestern Energy is available on the Company's Web site at
http://www.northwesternenergy.com.
SOURCE NorthWestern Energy
media, Claudia Rapkoch, 1-866-622-8081, claudia.rapkoch@northwestern.com, or
investors, Dan Rausch, +1-605-978-2902, daniel.rausch@northwestern.com, both
of NorthWestern Energy
