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Utility, Consumer Groups Offer PSC Proposals to Refund Tax Benefits

Utility, Consumer Groups Offer PSC Proposals to Refund Tax Benefits

The Montana Public Service Commission concluded a hearing on how NorthWestern Energy will spend between $14 million and $23 million in benefits from the federal Tax Cuts and Jobs Act. When Congress passed and President Trump signed a major tax cut last December, the Commission issued a notice of commission action requiring all regulated utilities to file proposals addressing the effects of the TCJA. The hearing, which lasted all day Thursday and half of Friday, dealt with NorthWestern Energy’s proposal for their electric and natural gas utilities.

“The benefits of the tax cuts should be passed on to the consumers of Montana,” said Commission Chairman Brad Johnson. “Today’s hearing helps make sure that happens in the most beneficial possible way.

Montana law allows regulated utilities like NorthWestern to pass the costs of paying their taxes directly through to ratepayers. So President Trump’s tax cut directly affects what Montanans pay for electric power and gas.

NorthWestern Energy calculated the total amount of the benefit from the TCJA to be about $14 million. They proposed spending the financial benefits of the tax cuts on a combination of refunds to consumers and the trimming of hazard trees that pose a risk to their distribution and transmission wires.

The Montana Environmental Information Center, the Northwest Energy Coalition, the Montana Consumer Counsel, the Large Customer Group, the Human Resource Council District 11 and the Natural Resources Defense Council all intervened in the docket.

Of those organizations, the MCC and LCG disputed the total amount of the benefit of the TCJA. By employing different accounting methods, the groups came up with a figure $23 million.
Intervenors also proposed different ways to spend the benefit. The Montana Consumer Counsel and the Large Customer Group, an organization of industrial-size NorthWestern customers, advanced the position that the entire benefit should be directly refunded to customers.

The MEIC and NWEC proposed the benefit be spent on energy efficiency, low-income weatherization, and a transition fund to help the community of Colstrip adjust to the eventual closure of the coal-fired electric generating facility there.

The HRC and the NRDC proposed that $1 million per year be carved off and spent on low-income weatherization programs.

No final action took place today. The Commission will meet again in a work session for a final vote on NorthWestern’s proposed plan, but that meeting has not yet been scheduled.

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