Montana PSC didn’t consider lower income customers in NorthWestern settlement, says new motion

By: - November 8, 2023 3:20 pm

Photo illustration by Getty Images.

Low-income power customers will absorb the biggest hit from steep increases in NorthWestern Energy rates, but the Montana Public Service Commission didn’t consider them in its recent order.

The PSC also failed to direct the utility to improve efforts that are supposed to help people who earn less.

Those are a couple of the arguments made in the last of three motions requesting the PSC reconsider its order last month in a settlement on electric rates for NorthWestern — upping residential rates 24% and small business rates 25% since August 2022.

The motion, filed by the Human Resource Council District IX, Natural Resources Defense Council and NW Energy Coalition, also alleges the order fails to consider compounding effects on customers who earn less.

“(They) will not only have to pay higher bills at home but will have to pay more for goods and services as Montana’s commercial enterprises increase their prices to pay NorthWestern’s utility bill,” the motion said.

The PSC’s unanimous vote last month to approve a settlement among NorthWestern, the Montana Consumer Counsel, and other large parties has received a variety of criticism and calls for a redo.

Reconsideration isn’t out of the question, according to PSC legal counsel.

Motions argue the order unfairly inflates dollars going to utility shareholders by $3.4 million, fails to adhere to due process, and, most recently, doesn’t take the low-income population into account, among other allegations.

“While NorthWestern’s failure to consider the impact of rate increases on vulnerable customers is simply irresponsible, (the order)’s failure to address the issue is legally actionable,” said the most recent motion. “Impacts to NorthWestern low- and moderate-income customers are a relevant factor in determining the reasonableness and justness of rates.

“Moreover, this is especially true given that customers do not have a robust low-income energy assistance program to fall back on.”

The rate increase has been described as “historic.” The average electric residential customer’s monthly bill was $91.27 in August 2022, and it will be $112.94 with the settlement, according to NorthWestern.

This week, a NorthWestern Energy spokesperson pointed to a number of programs available to help people with their bills, some through the utility and others through the state or a nonprofit. NorthWestern offers discounts tied to approval for state assistance, along with rebates.

However, the motion discussing effects on people who earn less money said NorthWestern doesn’t have a program specifically designed to help them besides one that’s statutorily required, called Universal Systems Benefits.

“This stagnant pot of dollars is insufficient to deal with increasing energy burdens,” the motion said. “Despite higher bills for utility service, the Covid-19 pandemic, and inflationary pressures, the utility bill discount program is largely moribund, with participation rates having declined over 25% in the last decade.”

NorthWestern spokesperson Jo Dee Black earlier said more customers may qualify for a program run through the state than apply for it, the federally-funded Low Income Energy Assistance Program.

In a phone call Wednesday, Katrina Metzler, head of the National Energy & Utility Affordability Coalition, said there are many reasons customers may not apply — from having an issue with transportation, to a language barrier, to having a sick child at home.

Just 12.85% of the eligible population in Montana received LIEAP money in 2021, according to data from the coalition. More than 77% of recipients have at least one vulnerable family member at home, an elderly person (46%), a disabled person (44%) or a child under 6 (13%).

Metzler said the bulk of the money goes toward services, not marketing, so in some cases, people may not even know the program exists. However, Metzler also said LIEAP is not an entitlement program, so it runs out of resources.

“When the money runs out, even if there’s a line of people around the block waiting to be served, we have to cut off the program because there’s no more resources available,” said Metzler, executive director of the coalition.

As for the flaws the parties raise, Metzler said offering a program that supplements LIEAP is a step ahead: “Even if it’s imperfect, the fact it exists at all is a victory.”

She said such programs can be improved and amended, and part of the role of the regulatory process currently underway is to consider whether improvements are needed.

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Keila Szpaller
Keila Szpaller

Keila Szpaller is deputy editor of the Daily Montanan and covers education. Before joining States Newsroom Montana, she served as city editor of the Missoulian, the largest news outlet in western Montana.