Scotland man challenges utility on gas-rate increase

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PIERRE — Jim Sedlacek wants NorthWestern Energy to answer why the company wants 7.2 percent more revenue from its natural gas customers in South Dakota.

A former mayor of Scotland and a retired policeman, Sedlacek, 79, is using a state law from the 1970s to force a public hearing before the state Public Utilities Commission.

He gathered signatures from 24 other people in the community objecting to NorthWestern’s proposed rate increases. The PUC’s three elected members will decide Tuesday how to proceed.

The petition might be the first of its kind under the 1975-76 law. “To the best of our knowledge, there has not been another rate case where citizens have filed a circulated petition,” PUC spokeswoman Leah Mohr said.

Sedlacek said he got the idea from the official notice mailed to customers from NorthWestern.

“It was on a slip in the bill. They brought it out. I wouldn’t have been aware of it,” he said. “I talked to a local attorney. That led to, what the heck?”

Sedlacek lives in the house he bought 49 years ago and relies on NorthWestern for electricity and natural gas. The company built a new office and shop at Scotland this year.

He said he understands that prices increase but he also watched NorthWestern go “belly-up” during the past decade at great loss to owners of the company’s stock.

“All we’re talking about is being fair,” Sedlacek said. “Just the idea the company understands there are people they have to answer to.”

NorthWestern has calculated that its proposal would cost residential customers an average of $8.31 per month, based on average usage.

The company last raised natural gas rates for South Dakota in 2007. The company delivers electricity to 110 communities and natural gas to 60 communities in South Dakota.

The company’s official request to the PUC says NorthWestern Energy currently receives about $57 million annually from natural gas customers in South Dakota and seeks authority to collect an additional $4.1 million through increased rates.

About $3 million of the increase would come from the 37,000-plus residential customers and about $1.1 million from commercial customers.

NorthWestern cites costs related to environmental remediation activities at the Aberdeen manufactured-gas plant and acquisition of the Milbank pipeline from Northern Natural Gas.

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