PUC OKs NorthWestern’s reduced rate hike

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PIERRE — The South Dakota Public Utilities Commission approved a 3.3 percent natural gas rate increase for NorthWestern Energy this week.

The final increase amount was offered by the company and PUC staff as part of a joint settlement stipulation.

The increase represents less than half of what the company requested. The rate increase becomes effective Thursday.

The commission unanimously voted to accept the settlement and approve the reduced rate increase at its regular meeting on Tuesday in Pierre.

The rate increase will generate approximately $1,847,000 in annual revenues for the company. NorthWestern applied to the commission in May for permission to increase its rates by 7.2 percent, to raise approximately $4,123,000 in additional annual revenue.

PUC Chairman Gary Hanson said the difference between the company’s request and the commission’s approval reflects the arduous effort that resulted in the settlement agreement.

“Rate increase requests are not quick and simple. The numerous and lengthy negotiations between the PUC staff and the company ultimately ended with a savings to ratepayers of more than $2 million compared to what was requested. That’s tremendous,” he said.

The rate increase review spanned six months and included analysis by a PUC staff team comprised of one attorney and three analysts. A consulting firm assisted the staff.

Commissioner Chris Nelson, vice chairman of the PUC, explained that the commission follows a process outlined by South Dakota law when considering rate increase requests.

“The commission makes careful deliberation of all aspects of a rate case and is bound to uphold the laws and rules of the state with our decision. We strive for a rate that is fair, just and reasonable for all sides, consumers and the company,” Nelson said.

At the request of local residents, the commission held a public hearing in Scotland in October, to hear comments from NorthWestern customers.

The hour-long meeting included an information exchange among the PUC, NorthWestern representatives and local residents to help explain the rate case process.

“I felt the meeting in Scotland was a valuable experience,” stated PUC Commissioner Kristie Fiegen. “I appreciated the opportunity to share details about how the commission handles rate case requests by thoroughly studying the evidence and weighing the facts relative to our jurisdiction before making our decision. This truly is an interesting and complex process,” she concluded.

The settlement includes a moratorium barring NorthWestern from seeking another natural gas rate increase from the commission before Dec. 1, 2013, excluding an extraordinary event. The company’s last natural gas rate increase of 5.8 percent was approved in December 2007.

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