MTPR

Customers Will Pay For NorthWestern Energy Tax Increases

Dec 7, 2015

NorthWestern Energy officials say they won't appeal a big increase in the company's Montana property taxes after last year's $900 million purchase of 11 hydroelectric dams.

Instead, the company's customers will pay for most of the nearly $23 million tax hike.

The ability to pass on costs to its customers does not give NorthWestern much incentive to keep its property tax liability down, said Commissioner Travis Kavullah.

Another commissioner, Kirk Bushman, said he was frustrated by having to pass on the tax amount the revenue department comes up with to the customers.

“The idea that I have to sit here and approve what the Department of Revenue was doing to Northwest Energy and then pass it on to ratepayers is very frustrating me as a commissioner."

Public Service Commission members questioned NorthWestern and Department of Revenue officials about the taxes today.

NorthWestern underestimated the final tax increase by about $5 million. Attorney John Allke says the utility decided against an appeal because the Montana Tax Appeal Board does not favor corporate taxpayers.

"There's no solution to your frustration there. Barring legislative change, barring any significant change at the administrative level, barring perhaps coming up with a different appellate body than the state tax appeals board, barring a change like that, I think your frustration is going to continue through the years.”

Allke says the hikes will amount to about a 4.5 percent increase in the typical bill for electric customers and a 4.9 percent average increase for natural gas bills.