Utility bills are broken down into several component:
The monthly service charge covers expenses that are not usage-sensitive, such as bill and payment processing, meter reading, having a customer service center, etc. This charge does not fluctuate based on usage.
Transmission/Delivery charges cover the costs associated with the delivery of electricity or natural gas from the supplier to the local wires and pipes to homes or businesses. Transmission lines bring electricity to the many areas a utility serves, substations reduce the voltage to parameters that local customers can use, distribution lines get the electricity to the neighborhoods, and individual service lines connect customers to distribution lines. The same principal applies to natural gas, but instead of wires and cables, it is natural gas piping, regulating stations, etc. The delivery charges are regulated by the Public Service Commission (PSC) and changes require PSC approval.
Supply charges are a mix of the costs related to fixed-price purchase agreements, rate-based resources, and short-term market purchases. These rates can fluctuate monthly depending on the market prices. Each year a docket is opened to “true-up” the monthly supply rate changes. The PSC, along with the Montana Consumer Counsel and other interested parties, takes a very close look at each of the monthly trackers to determine whether or not the costs were passed through appropriately, and that all purchases were prudent.
View an in-depth review of a NorthWestern Energy bill
View an in-depth review of a Montana-Dakota Utilities Co. bill