BUTTE, Mont., May 13, 2019 /PRNewswire/ -- NorthWestern Corporation d/b/a NorthWestern Energy (NYSE: NWE) announces that it has agreed to settle its Montana electric general rate review request with the Montana Consumer Counsel, The Montana Large Customer Group, The Federal Executive Agencies, and Walmart Inc. If the Montana Public Service Commission (MPSC) approves the settlement, NorthWestern Energy will receive a 1.23 percent overall increase in Montana electric rates resulting in a $6.5 million annual increase in revenue. The typical residential-electric customer would experience an increase of approximately $0.70 per month, or less than 1 percent on the total bill.
The settlement is based on 49.4 percent equity capital structure, an authorized return on equity of 9.65 percent (with the exception of our partial ownership in Colstrip Unit 4 which has a lifetime return on equity of 10 percent, per a 2008 Montana Public Service Commission order), and includes all parties who filed comprehensive revenue requirement and cost allocation testimony. The terms of the settlement also specify that NorthWestern extend certain asset lives, which is expected to reduce depreciation expense by approximately $9 million annually. The settlement does not address rate design, or questions raised by additional parties concerning NorthWestern's investment in Colstrip Unit 4.
The MPSC previously granted an annualized interim rate increase of $10.5 million as of April 1, 2019. Any difference between interim and final approved rates will be refunded to customers. NorthWestern Energy serves about 374,000 electric customers in Montana in 208 communities. NorthWestern Energy's general electric rate review request was filed in September 2018 and is the first since October 2009. During the last decade, NorthWestern Energy has invested more than $520 million in the electric infrastructure serving our Montana customers, including almost $227 million in the distribution system infrastructure project, which delivers energy from the transmission system to residential and commercial customers.
About NorthWestern Energy (NYSE: NWE)
NorthWestern provides electricity and / or natural gas to approximately 726,400 customers in Montana, South Dakota, and Nebraska. We have generated and distributed electricity in South Dakota and distributed natural gas in South Dakota and Nebraska since 1923 and have generated and distributed electricity and distributed natural gas in Montana since 2002. More information on NorthWestern is available on the company's website at www.northwesternenergy.com.
SOURCE NorthWestern Energy