Montana PSC orders NorthWestern to take closer look at low-income programs – Daily Montanan

NorthWestern Energy will need to provide more information to regulators about how well its energy assistance programs are helping low-income customers in the wake of double-digit utility rate increases.

The monopoly utility also will need to identify barriers low-income customers face to using those programs and determine the best way to reach those customers.

“Evidence in the record regarding affordability is limited,” said the Montana Public Service Commission.

Tuesday, the Public Service Commission unanimously voted to approve an order that largely keeps in place a settlement agreement it greenlighted this fall with Northwestern Energy.

That agreement resulted in a rate increase of 24% for residential electricity customers and 25% for small businesses compared to rates in August 2022 — and commissioners didn’t specifically discuss rate changes.

But the Public Service Commission received three motions to reconsider its earlier decision, and after hearing legal and rate analyses from staff at a meeting Tuesday, it rejected two of the three motions.

However, the PSC bought into arguments made by one group of parties, the Human Resource Council District XI, Natural Resources Defense Council, and NW Energy Coalition.

The Human Resource Council and its partners argued the “effects of any utility rate increase are disproportionately felt by low-income customers,” but it said the PSC didn’t discuss those customers specifically.

The group also said NorthWestern offers no low-income programs other than what it’s required to do by law; the money that’s available isn’t enough; customers have faced roadblocks with its weatherization program ever since NorthWestern contracted with the Department of Public Health and Human Services; and participation rates in low-income programs “have declined by more than 25% over the last decade.”

At a PSC hearing in April, data from NorthWestern showed the decrease in participation.

Under questioning by a lawyer representing the Human Resource Council and its partners at the time, a vice president for the utility admitted the company wasn’t proposing any changes in its outreach to low-income customers.

Tuesday, however, the Public Service Commission ordered NorthWestern Energy to do more to analyze its service to low-income ratepayers.

“The commission is sensitive to the impacts that utility rate increases have on all customers, including low-income customers,” said the draft order. “The commission acknowledges that (its earlier order) does not separately and explicitly address the impact of the settlement on low-income customers and, on reconsideration, finds that the request … for an analysis of the impact is reasonable.”

The PSC said it might seem intuitive that low-income customers are more affected by rate increases, but the lack of evidence means commissioners can’t reach any conclusions.

“Nevertheless, on reconsideration, the Commission agrees with HRC/NRDC/NWEC that an evaluation of the efficacy of available low-income energy assistance programs through a stakeholder process is warranted,” the order said.

“At a minimum, the stakeholder process should attempt to address apparent information gaps concerning trends in energy affordability for low-income customers in relation to the residential class as a whole, barriers to participation in existing assistance programs, coordination across assistance programs, and the most effective outreach and delivery mechanisms for low-income assistance.”

The PSC, made up of five commissioners who are all currently Republican, also clarified it expects NorthWestern to maintain a permanent stakeholder group to evaluate “demand-side management,” or strategies to control energy use, and expand its engagement.

But in its order, the PSC rejected motions to reconsider from 350 Montana and Broad Reach Power.

In its motion, 350 Montana had argued the PSC invented a “magical” new way of analyzing costs that wasn’t legal, failed to consider emissions, sent $3.4 million to shareholders that belonged to customers, and discriminated against residential customers and small businesses.

However, an analysis from PSC staff said commissioners based their order on judicial and agency precedent, and it also said NorthWestern will need to include data about carbon emissions in future reviews.

As for the money 350 Montana alleges belongs to customers — the difference between the authorized cost of debt and NorthWestern’s actual cost of debt — the PSC said it would have to undo a decision made by an earlier commission in a separate case to go that route.

The staff analysis also indicated larger customers subsidize the cost of electricity for residential and small businesses — as part of the accounting principles of “gradualism” and moderation to decrease rate shock. At least a couple of commissioners wanted to stress that subsidy.

“Certainly the order has softened the blow … at the expense of other classes in order to lessen rate shock on residential and small business customer classes,” Commissioner Jennifer Fielder said.

Broad Reach had said it was denied due process because the PSC didn’t reschedule a hearing on the settlement after it was filed. The PSC disagreed and said the burden of canceling the hearing and requiring more testimony and discovery would have outweighed the benefit of moving ahead.