Comparing electric costs
To the Editor:
I compared December 2017 electric bills with my neighbor. I have Bon Homme-Yankton electric; he has NorthWestern Electric. My bill was $300.76 for 3320kwh of electricity, an effective rate of 9.06 cents/kwh. My neighbor's bill was $312.96 for 3880kwh, for an effective rate of 8.07 cents/kwh. Even after the 15.5 percent rate increase by Northwestern in 2015, his rate is more than 10 percent lower than mine. How is this possible?
People opposed to wind energy say NorthWestern raised rates because of Beethoven Wind Farm purchase. That's not true. NorthWestern requested a 20.24 percent rate increase seven months before they bought Beethoven. Publicly available documents (PUC website, docket EL14-106) show primary driver for NorthWestern's rate increase request was pollution control upgrades at two coal plants, a small natural gas plant in Aberdeen, and transmission upgrades. There is no mention of wind power in their rate increase request. You can check it out if you are interested.
Also available on the PUC site are documents showing NorthWestern informed the PUC they expected their purchase of Beethoven would save customers $44 million over 20 years, and they wanted to rebate their PTC tax savings to their customers through the "Fuel Adjustment Clause," resulting in an average monthly credit of 0.766 cents/kwh. PUC agreed and granted a 15.5 percent increase instead of the originally requested 20.24 percent because the savings from Beethoven partially offset their other increased costs.
My neighbor's bill reflects about a $9.50 savings from the reduction in rate increase, and about a $30 credit in the Fuel Adjustment Clause from the PTC's because of Beethoven. If you add those savings back to his bill and calculate the effective rate, it would be 9.11 cents/kilowatt-hour, almost identical to my 9.06 cents/khw.
The truth is NorthWestern's rate increase was the same as other utilities' rate increases to comply with clean air standards at coal plants; purchase of Beethoven saved
customers money, so in our area, people on NorthWestern have lower electric rates B-Y Electric.