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MT PSC: Tax changes lead to likely rate reductions for most utility customers

NorthWestern Energy
Posted at 6:44 PM, Feb 02, 2024

HELENA — The Montana Public Service Commission says most utility customers around the state will see reductions in their bills this year, because of property tax changes that lowered costs for energy companies.



Montana law allows utilities to use a “tax tracker,” automatically adjusting their rates up or down to account for the amount they have to pay in state and local taxes.

This year, the PSC says reductions in NorthWestern Energy’s property taxes lowered their costs of service by around $56 million for electric and $19 million for gas. The agency says that will lead to decreases of about $6.95 a month for a typical electrical customer using 750 kilowatt-hours per month, and about $4.40 a month for a typical gas customer using 65 therms per month.

PSC leaders said NorthWestern’s property tax went down partly because the Montana Department of Revenue made changes to how it assessed the utility’s property value as part of a settlement agreement – from about $2.9 million in 2022 to about $2.7 million in 2023. In addition, many local governments lowered their property tax mill rates last year as other classes of property – notably residential property – increased in value.

The agency says Energy West Montana and its sister company Cut Bank Gas Company, which together provide gas services to customers in Great Falls, Cascade, Cut Bank and West Yellowstone, also lowered their tax tracking adjustments. They estimated Energy West’s rate reduction at about $4.19 a year for a customer using 835 therms a year, and Cut Bank Gas’s at about $12.10 a year for a customer using 1,140 therms a year.

Montana-Dakota Utilities reported an increase of $1.1 million in their taxes for electric service and a decrease of almost $670,000 in taxes for gas service. The PSC says that works out to an expected increase of about $1.23 a month on electrical for a customer using 625 kilowatt-hours a month, and a decrease of about $0.51 a month for a gas customer using 83 therms a month.