NorthWestern Energy Asks Montana Public Service Commission to Place Natural Gas Production Field into Rate Base
BUTTE, Mont., April 3, 2012 /PRNewswire/ -- NorthWestern Corporation d/b/a NorthWestern Energy (NYSE: NWE) has filed an application with the Montana Public Service Commission to place the company's Battle Creek natural gas assets into rate base.
NorthWestern Energy purchased the proven production field and gathering system in 2010 for $12.4 million as part of an overall strategy to provide rate stability and customer value through the addition of regulated assets that are not subject to market forces. Montana Power owned about fifty percent of the natural gas used by its customers, with the price based on the cost of providing the gas. These gas resources were sold as part of supply deregulation. Since then, the transmission and distribution prices have been set on the regulated cost of providing the service, while the price of gas has been based on short-term market purchases.
Although Battle Creek provides less than 3-percent of the company's total natural gas requirements, the field's anticipated 47-year life span appropriately contrasts with the industry's 1-3 year contract period at market rates.
There is no immediate rate impact associated with this filing since revenue is already being collected in rates through the natural gas tracker. However, the filing is necessary to formalize the cost of service components associated with the field and the approval of a stipulation with Montana Consumer Counsel (MCC) on the cost of capital. NorthWestern is requesting a return on equity of 10.00% and a debt-to-equity structure of 52/48.
About NorthWestern Energy
NorthWestern Energy provides electricity and natural gas in the Upper Midwest and Northwest, serving approximately 668,300 customers in Montana, South Dakota and Nebraska. More information on NorthWestern Energy is available on the company's website at www.northwesternenergy.com.
SOURCE NorthWestern Corporation