MDU Files for a 13.3% Rate Increase; PSC Must Reach a Decision by March 25
In June of 2015, Montana-Dakota Utilities (MDU) filed for an electric rate increase with the Montana Public Service Commission. MDU requested additional revenue of $11.8 million dollars, which would’ve been a 21.1% increase or an approximate $14.80 per month increase to average residential electric customers; MDU is seeking to recover the cost that they have invested in pollution control projects, additional electric generation projects, and additional transmission investments and services.
The Montana PSC held Public Input Sessions in Sidney on September 24, 2015 and in Miles City on September 25, 2015. On Monday, February 8, 2016 a settlement agreement was reached between MDU, the Montana Consumer Counsel, and a large customer group that calls for additional revenues of $7.4 million, which is a 13.3% increase and will cost the average residential customer about $6.38 more per month. A Technical Hearing was held in Glendive February 9th and 10th and a decision by the PSC must be reached by March 25, 2016.
MDU investments include two projects to meet Environmental Protection Agency regulations. The first is the installation of a new system at the Lewis and Clark Station in Sidney to comply with the Mercury and Air Toxin Standards Rule, which was completed in the fall of 2015 at a total cost of $16 million. Montana electric customers’ share of the project is about $3.7 million. Additionally, the installation of an air quality control system and mercury control system in compliance with EPA Regional Haze and Air Toxin Standards at the Big Stone Plant in South Dakota was about $384 million with Montana electric customers’ share at $21.8 million.
MDU purchased a wind farm in North Dakota, a $220 million investment which will help the company reach renewable resource standards, and two natural gas engines near Sidney, a $43 million investment, both of which were completed in 2015. MDU also built a natural gas-fired plant near Mandan, ND that has been serving customers since August of 2014. The additional electric generation investments were made to meet growing customer needs and replace an expired power purchase agreement. The low to zero emission additions were determined to be the most cost-effective options.
To continue reliable service and meet customer needs, MDU has invested in transmission services by building and upgrading transmission lines and substations with Montana electric customers’ share being approximately $5.2 million over the last five years.
MDU customer’s benefit from the economies of scale as well as sharing the cost of providing electric service. When the cost of providing safe and reliable service becomes greater than the rates they are receiving, MDU files a rate increase request with the state regulatory commission. The last approved rate increase of 6.23% was in September of 2011.