FOR IMMEDIATE RELEASE: Tuesday, Jan. 9, 2024
MEDIA CONTACT: Leah Mohr, South Dakota Public Utilities Commission, (605) 773-3201 or (605) 280-4327

South Dakota PUC reduces NorthWestern Energy electric rate increase request

PIERRE, S.D. – The South Dakota Public Utilities Commission approved a rate increase for NorthWestern Energy’s electric customers in South Dakota at the commission’s regularly scheduled meeting in Pierre today, Jan. 9, 2024. The rate approved by the commission was presented in a settlement stipulation offered jointly by NorthWestern Energy and PUC staff.

The commission’s actions came after a nearly seven-month analysis of NorthWestern Energy’s request to increase rates for its South Dakota electric customers to generate approximately $30.9 million in additional annual revenue. The request was equal to a 16.32% increase in customer’s total electric bill or a 25.78% increase in base electric rates. After engaging in extensive discovery and numerous settlement discussions, NorthWestern Energy and PUC staff were ultimately able to reach a comprehensive agreement on all issues, including an overall revenue deficiency of $21,520,114, more than $9.4 million less than the original request. The agreed upon rate translates to an 11.38% increase in total electric bills or a 17.97% increase in base electric rates for South Dakota customers. As a result, a typical residential customer using an average of 750 kWh per month will see an increase of $13.67 in their monthly bill.

“Commissioners are the watchdogs for South Dakota customers and our priority is to secure benefits to ratepayers while also ensuring the investor-owned utilities continue to provide safe, reliable energy service,” said PUC Chairperson Kristie Fiegen. “NorthWestern Energy has not had a rate increase for nearly nine years. The South Dakota commission team worked hard to reduce the rate increase request by more than 30% and in the end, settled on a reasonable increase of 11.38% that averages out to about a 1.26% annual increase,” she explained.

The approved settlement agreement includes many terms that balance the interests of NorthWestern Energy and their South Dakota customers. As part of the settlement, NorthWestern chose to forego implementing interim rates which is estimated to save customers over $1.6 million and have agreed to a rate moratorium preventing the company from requesting an increase in base rates effective prior to Jan. 1, 2027. Other terms will allow NorthWestern to monetize production tax credits and recover costs related to short-term capacity contracts through the Fuel Clause Tracker and recover costs related to capital investments not yet included in base rates through use of a phase-in rate plan rider. Parties also agreed to increase the residential customer service charge from $6.00 to $7.00 per month.

“There is a massive amount of work that goes into every rate case and this one is no exception. PUC staff have sorted through, analyzed, calculated, and investigated mountains of information and have worked diligently, in cooperation with NorthWestern Energy, to bring us this settlement agreement. I appreciate their hard work and the dedication they show to South Dakota consumers,” commented PUC Vice Chairman Gary Hanson.

NorthWestern Energy’s last base rate increase for electric customers was approved by the PUC in October of 2015 and went into effect the following January. The company attributed the new increase to a number of factors, including its significant investments in infrastructure and generation since that time, including the new Bob Glanzer Generating Station near Huron, and increased labor and operating costs.

“NorthWestern has made significant investments to maintain reliability of their electricity supply and distribution.  This rate decision recognizes that needed investment while reducing the rate requested by the utility to the minimum required for reliable operation of their system.  I commend PUC staff for their hard work in arriving at this settlement determination,” stated Commissioner Chris Nelson.

NorthWestern Energy submitted its application to the PUC on June 15, 2023. New rates will go into effect for the approximately 64,680 electric customers in the company’s South Dakota territory on Jan. 10, 2024.

The full docket can be viewed on the PUC’s website at puc.sd.gov, Commission Actions, Electric Dockets, 2023 Electric Dockets, EL23-016 - In the Matter of the Application of NorthWestern Corporation dba NorthWestern Energy for Authority to Increase Its Electric Rates.

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