NorthWestern Energy is requesting an increase of $4.1 million annually due to increased operations and maintenance costs and to complete the company's remediation of manufactured gas plant ("MGP") sites in South Dakota.
Approximately $1.4 million of the requested increase relates to the annual estimated MGP remediation costs. In the event MGP costs are lower than estimated during the time period, the difference would be subject to a refund to customers. Accordingly, while gross margin and operating expenses will fluctuate based on actual results, this portion of the rate request would have no change on operating income.
If approved by the South Dakota Public Utility Commission in its entirety, the average residential bill for natural gas service would increase $8.31 per month.
"Maintaining and operating a safe, reliable and adequate natural gas system for our customers and the communities we serve is our highest priority. We do everything we can to manage the costs that are under our control. Like many others, we are experiencing higher costs associated with operating and maintaining the natural gas system in South Dakota," said Bob Rowe, President and CEO. "As we work to ensure the safe and reliable operation of our system and to meet our responsibility for ongoing environmental stewardship, we keep in mind customers' concerns about rate increases."
Natural gas customers in Nebraska are not affected by this filing. The rate filing covers operations and maintenance costs associated with the natural gas delivery service and do not affect the cost of the commodity. Commodity costs are adjusted monthly based on the price of natural gas.
NorthWestern Energy has been working over the years to remediate several MGP plants that date back to the early 1900s and pre-dated the introduction of natural gas systems. The plants converted coal and oil to gas for heating, lighting and cooking. Byproducts of this process include coal tar and purifier wastes which must now be remediated. There are several old MGP sites in NorthWestern Energy's system including Aberdeen, Huron and Milbank.
Customers with questions about our natural gas services, the proposed rate increases, or how to sign up for bill payment programs may call Customer Service at 800 245-6977, or stop by one of our local offices for assistance or visit www.northwesternenergy.com.
About NorthWestern Energy
NorthWestern Energy provides electricity and natural gas in the Upper Midwest and Northwest, serving approximately 665,000 customers in Montana, South Dakota and Nebraska. More information on NorthWestern Energy is available on the Company's Web site at www.northwesternenergy.com.