Tax Cut Benefits Flow Through to Montana Consumers

HELENA, Mont. – October 23, 2018 – The Montana Public Service Commission voted to accept a stipulation between NorthWestern Energy, the Montana Consumer Counsel, and other parties that sends all the benefits NorthWestern accrues from the Tax Cuts and Jobs Act (TCJA) back to Montana ratepayers for gas and electricity.

“This is a huge victory for the people of Montana,” said Public Service Commissioner Brad Johnson. “Last December, the Commission put our regulated electricity and gas companies on notice that any windfall from the tax cuts President Trump and Congress passed would have to go to the people of Montana, rather than the corporation. Today, that comes to fruition.”

On December 29, 2017, the Commission reacted to the passage of President Trump’s tax cuts by stating that the benefits of those cuts to regulated electric and gas utilities would have to be passed through to consumers. The Commission asked regulated utilities to submit plans for how that would happen.

NorthWestern originally submitted a plan that set the total amount of their benefit from the TCJA at $14 million. The plan would have spent part of the proceeds on rate reductions or refunds for customers, and part on trimming hazard trees near its power lines.

Several parties representing NorthWestern customers and other groups intervened in the case, proposing a larger benefit from the TCJA and a plan that returned 100 percent of the benefit to consumers.

The stipulation, or agreement between the parties, settles the total amount of the TCJA benefit to NorthWestern at $20.5 million and spends all of those funds on either refunds for customers or low income energy assistance. Some consumers have left the system in the time between the passage of the TCJA and the PSC’s approval of the stipulation, making those refunds unpayable. The total of that amount is approximately $1 million, which makes up the portion of the TCJA benefit that will go to low income energy assistance.

As a result of the Commission’s action and the stipulation, eligible electric consumers are likely to see a credit of around $24 on their bill. Eligible gas consumers will receive a credit of $3.50.

“I had some questions about the utility’s original plan,” said Vice Chairman Travis Kavulla (R-Great Falls). “But this stipulation is in the best long term interests of all the parties. I’m glad they were able to put this together.”