MDU answers to Public Service Commission

 The Montana Public Service Commission (left) begins the February 9 hearing requested by Montana Dakota Utilities (right) to consider a 13% electric rate increase. PSC Kirk Bushman, District #2 represents Fallon County. (fifth from left) Photo by Sherry Vogel
The Montana Public Service Commission (left) begins the February 9 hearing requested by Montana Dakota Utilities (right) to consider a 13% electric rate increase.
PSC Kirk Bushman, District #2 represents Fallon County. (fifth from left)
Photo by Sherry Vogel

   February 9, the Public Service Commission (PSC) held a hearing with Montana-Dakota Utilities (MDU), a division of Montana-Dakota Resources Group, Inc. in Glendive at the Dawson County Courthouse.

By Sherry Vogel

MDU proposed a 13 percent increase based on the same premise stated last fall when the company proposed a 21.1 percent increase which was shot down by the PSC.

   Three parties were present to express their concerns before the PSC. Lawyers representing MDU, industrial users and customer consumer groups all made opening statements encouraging the PSC to accept the 13 percent increase. A settlement had been reached among all three of these groups the day before the hearings began. This eleventh hour agreement more or less settled the issue being brought before the Commission. All three affected parties particularly were attracted to the condition that the rate increase would be phased in over a two year period. The agreement also stipulates that MDU would not be allowed to ask for another electric rate increase until April 1, 2017.

   The Public Service Commission, a board consisting of publicly elected representatives from five state districts, was also present. Nicole Kivisto, president of MDU, took the floor in the opening hours of the hearing.  She stated that MDU doesn’t have a crystal ball on future oil fluctuation, but she felt the five percent growth rate figure was a good handle on the growth rate. She contends that it is essential MDU realizes a 13 percent rate increase to keep up with stated growth rate projections. Further exploring the issue, PSC board memberRodger Koopman from Bozeman, representing Dist. No.3 asked,”Hasn’t the growth rate been drastically altered in the  area surrounding the Bakken due to falling prices?” Then added,“What is the methodology used by MDU in regards to figuring growth rates?”

   She replied, “MDU uses a combination of historical trends and patterns to figure growth.”

   Another question raised by Koopman, “Does the fact that you are a small company increase your risk or do you feel that because you are a smaller company there are advantages?” He continued, “As for instance, are you more flexible to move quickly and respond to economic changes?”

   The president of the company responded that she felt the company was at increased risk. She said, “We are making decisions with concerns for the customer as we strive to make changes to stay in compliance with EPA Clean Power Plan regulations.” She stated, “A worse scenario for the customer would be plant shut-downs due to non-compliance because it would affect the customer by raising their costs.”  The EPA’s Clean Power Plan strives to reduce  the nation’s carbon emissions by 30 percent by 2020.

 PSC member,Travis Kavulla, District No. 1, went on record to  inform that the State of Montana is being discriminated against because it is being expected to lower carbon emmissions by 47% by 2030. Continuing the inquiry process, he asked, “You already own plants that are hardly operating, such as the combustion turbine in Miles City which is operating only one hour out of 760 hours. Why did you build new plants?”

   Ms. Kivisto stated she would refer that question on to the company’s legal counsel, Mike Green.

   With the first day of a full week of proceedings barely winding down, the winds of unpredictability were once again blowing. Because that very next day, Feb. 10, the United States Supreme Court suspended the EPA’s Clean Energy Plan temporarily to take a closer look at carbon reductions.

   Ms. Kivisto’s earlier statement regarding the necessity to raise customer rates in order to finance upgrades to stay in compliance with EPA Clean Power Plan regulations unexpectedly was a moot point, at least until after the elections.

   Decisions made by the PSC are not yet available at press time.

      



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