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NorthWestern Energy Submits Delivery Services General Rate Case Filing to the Montana Public Service Commission

Posted on: Monday, 19 October 2009, 05:00 CDT

BUTTE, Mont., Oct. 19 /PRNewswire-FirstCall/ -- NorthWestern Energy (NYSE: NWE) today submitted its general rate filing to the Montana Public Service Commission seeking approval to change several components of its delivery services charges for Montana electricity and natural gas customers. This filing was required pursuant to a stipulation approved by the Montana PSC in 2008.

If approved, the proposed changes would result in an increase of $0.08, or less than one-tenth of one percent, for a typical natural gas customer using 10 dekatherms/per month. A typical residential electric customer's total monthly bill would increase by $2.41 or about 3.35%. The company has asked for an interim rate adjustment pending the full review by the Commission.

"This filing addresses the foundational aspects associated with the day-to-day operations and maintenance of our electric and natural gas infrastructure," said Bob Rowe, President and CEO. "Despite the economic downturn and other challenges, this is an exciting time to work at NorthWestern. We're making the appropriate investments in our system to provide safe and reliable service. We're engaging our stakeholders at all levels to prepare our system to meet the expectations our customers have for utility service now and in the future."

The proposed changes include new cost allocation between rate classes and rate designs. The proposals introduce an inclining block residential rate structure that would assign more costs to residential customers that use more energy within each rate class. Under this methodology, some customers would see higher increases than the typical residential customer while other residential customers may experience lower rates than average. The intent of the inclining structure is to provide additional incentive to larger volume residential users to reduce their consumption through adoption of energy efficiency measures.

The amount of the proposed rate increases, based on a requested authorized return on equity of 10.9% and a weighted cost of capital of 8.3%, has been reduced as a result of a reduction to income tax expense due to recent changes made to the tax accounting method related to capital expenditures and repair expenses. As a result of this change, NorthWestern's proposed revenue requirement for its natural gas utility was reduced from approximately $4.8 million to $1.96 million and for its electric utility from $24.1 million to $15.5 million. The general rate filing does not address energy supply issues, which are addressed in other proceedings. The transmission and distribution components of a typical total bill represent less than 50% for residential electric and natural gas customers with energy supply costs making up the balance of the bill amounts.

About NorthWestern Energy

NorthWestern Energy provides electricity and natural gas in the Upper Midwest and Northwest, serving approximately 656,000 customers in Montana, South Dakota and Nebraska. More information on NorthWestern Energy is available on the Company's Web site at www.northwesternenergy.com.

SOURCE NorthWestern Energy

Source: PR Newswire

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