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Economic development leaders, legislators, weigh in on NorthWestern Energy rate case • Daily Montanan [1]

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Date: 2025-06-13

Some economic development leaders said this week Montana needs the new methane-fired gas plant NorthWestern Energy built and want the Public Service Commission to greenlight its rate case.

“It’s reliable baseload like Yellowstone (the Yellowstone County Generating Station) that keeps us in business and keeps the economy moving,” said Paul Green, executive director of Big Sky Economic Development Authority.

NorthWestern Energy built the new plant, the Yellowstone County Generating Station, without preapproval by the Montana Public Service Commission, arguing it needed to move quickly to save money.

The 175-megawatt plant in Laurel is a contested part of the rate case in a complex and controversial hearing underway this week and next week at the regulatory agency.

The monopoly utility wants customers to pick up the tab for the plant, arguing it is necessary for reliable and affordable power supply.

Opponents, though, say much more affordable options were available compared to the estimated $320 million plant, as are sources that don’t pollute as much.

Every day during the hearing, the PSC is taking public comment in advance of witness testimony, and economic development leaders and current and former legislators are among those offering perspectives.

Green, also former head of the state Department of Commerce, said he appreciates renewable options, especially the wind and solar being developed on the eastern plains.

He said those options offer another revenue stream to strapped farmers and ranchers.

Green said he can see Montana being the “driving force” for energy in the northern plains region, but it can’t play that role without the plant and NorthWestern.

“That’s one thing that I love about seeing the Yellowstone County generation facility and NorthWestern willing to partner with us on making sure that we have a base load,” Green said.

Former state Sen. Mary McNally, however, said a large portion of the requested rate increase is due to the new plant, but NorthWestern didn’t need to build one of the costliest options.

McNally said Lazard, a global financial advisor, found utility scale solar and wind plus storage to be “two of the least expensive technologies,” but large gas plants and coal “two of the most expensive.”

“It was the utility’s choice to build the methane plant with no preapproval or public input,” said McNally, who served on energy committees in the 12 years she spent in the Montana Legislature.

She said customers already experienced a 28% increase in a settlement the PSC approved in October 2023, and commissioners should protect them from unnecessary costs in the current case.

“It is up to the commission to prevent shifting the cost of this risky decision on the consumers,” McNally said.

McNally, a Democrat, also said the more than 10% return on equity NorthWestern is requesting is “excessive,” and the PSC should approve a rate more in line with other regulated utilities and industry norms.

But Republican Rep. Gary Parry said he supports NorthWestern’s request.

Parry said he is proud to represent Colstrip, whose identity and economy are deeply intertwined with energy, and he’s grateful NorthWestern is continuing to invest in the coal-fired facility there.

Last summer, NorthWestern announced it was acquiring more shares of the Colstrip plant even as other owners unload coal.

A 2023 report from Energy Innovation Policy and Technology estimated 99% of all coal plants in the U.S. were more expensive than solar, wind or energy storage.

Beyond Colstrip, Parry said he considers the utility’s investment in the Yellowstone County Generating Station a “prudent, forward-thinking action” to diversify its portfolio.

Parry serves as chairperson of the Energy, Technology and Federal Relations Committee of the state House of Representatives.

“As a lawmaker deeply invested in Montana’s energy future, I believe that supporting NorthWestern Energy’s request for a rate adjustment is a necessary step towards sustaining and modernizing our energy infrastructure,” Parry said in a statement read by a PSC staff person. “It will enable the company to maintain and expand critical generation assets, including Colstrip and the Yellowstone County Generating Station, while continuing to deliver reliable service to customers across the state.”

Sen. Mary Ann Dunwell, though, said NorthWestern Energy appears to be “layering rates upon rates upon rates,” including recently in a way that circumvented the authority of the PSC.

Dunwell, a Helena Democrat, said usually, there’s no clear answer in policy decisions, but in this case, she said, the PSC should easily reject NorthWestern Energy’s rate increase.

Kelly Sullivan, executive director of the Butte Local Development Corporation, spoke in favor of the rate request from NorthWestern and said the utility worked with other parties to come to reasonable settlements under consideration by the PSC.

“NorthWestern knows that bill increases are hard with other costs of living rising too, and they’re ready to help those who may be struggling with their bills,” Sullivan said. “At the same time, they need to cover their costs in a fair manner in order to maintain existing and add new infrastructure to best serve their customers.”

Patrick Barkey, of Potomac, said it’s also important to realize investors are watching the Public Service Commission’s actions.

Barkey, who spent the last 18 years analyzing the economy and power industry in Montana, said if investors can’t get a good rate of return in Montana, those dollars will go elsewhere.

“This is a time when investment is needed to head off threats from system reliability, from wildfire mitigation, harden systems from cyberattacks, and support the load growth that a growing economy will generate,” said Barkey, former head of the Bureau of Business and Economic Research at the University of Montana.

The PSC hearing is expected to continue through June 20.

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