Montana Dakota Utilities in Billings, Montana (Photo by Darrell Ehrlick of the Daily Montanan).
After public criticisms of higher and higher utility rates, the Montana Public Service Commission rejected Tuesday a rate increase requested by Montana-Dakota Utilities — for the time being.
“It’s just never ending, and as someone else said, income is not like that,” said Karen Jarussi of Billings, who asked the PSC to look out for families and consumers.
The Public Service Commission regulates monopoly utilities in Montana. It is charged with ensuring fair rates for customers and a reasonable return for public utilities.
The PSC may still grant the full increase requested by MDU after further review, or $8.68 a month for residential customers, according to a staff report.
Tuesday, however, Commissioner Annie Bukacek was in the minority in supporting an interim bump.
At the meeting, Bukacek moved to approve a staff recommendation that would have increased natural gas rates for the average residential customer $5.01 a month, or 10.25% more — less than the $5.17 interim increase MDU wanted.
All four other commissioners voted against it, however.
Commissioner Tony O’Donnell said he isn’t opposed to reconsidering the increase as the full case unfolds, but the Montana Consumer Counsel hasn’t even weighed in yet.
Commissioner Randy Pinocci said the timing is bad, too. He said the increases would hit customers just as winter approaches and heating prices are going up anyway.
PSC President James Brown said he didn’t believe the company had justified the request, and he trusted the next commission will get a full picture of the entire case and make a sound decision. (Three PSC seats are on the ballot this November, and winners will take office in 2025.)
In the meantime, Brown said he would oppose the temporary request, as the PSC has the discretion to do.
“If we can spare Montana natural gas customers from yet another source of sticker shock — which I believe this is — on their winter natural gas bills, I believe we have an obligation to do so,” Brown said.
In a staff report, however, a PSC analyst said the company needs to bring in more money, although staff recommended a lower increase than MDU wanted.
“MDU’s current rates barely recover the cost of providing natural gas service and do not allow MDU shareholders to earn a reasonable return on their investment,” said a PSC analyst at the meeting.
Bukacek concurred with the staff recommendation and said she understands consumers are struggling. She said she is a doctor and sees older patients who don’t have much money, but she believes the utility is hurting too.
“Just as expenses increase for consumers, so does the cost of doing business for utility companies, utility companies that keep us alive,” Bukacek said.
In August 2023, the PSC unanimously approved a rate increase of 9.1% for MDU electric customers.
Last fall, the all-Republican PSC also unanimously approved a settlement that increased rates for NorthWestern Energy customers 28%, and members of the public have been protesting the hikes since.
Just last week, members of the public called on legislators to make sure the Montana Consumer Counsel, established in the state Constitution to advocate for consumers, works on their behalf.
Tuesday, customers and residents in eastern Montana, where MDU operates, questioned the rate request given previous rate increases and other rising costs and higher taxes.
They also said the utility should pay its fair share and could afford to do so.
“If MDU is doing so great financially — and their stockholders are — why do they need another large rate increase when people in these little towns in eastern Montana are struggling?” said Mary Catherine Dunphy, of Miles City.
Karen Stears, of Billings, agreed the company was doing well financially, and she too wondered why they should get more money. She also wanted to know if they were doing their part to keep costs down.
“Have they provided any evidence of cost-saving measures and efficiency improvements that they implemented prior to the rate increase request?” Stears asked.
Jeff Pattison, of Glasgow, said another increase would hurt the agricultural community in Montana, which is already on the ropes with drought.
In 1972, he said, the price of wheat was $4.80 a bushel, and it’s now $4.68. But he said a loaf of bread is $7 or $8 now as opposed to 25 cents in 1972.
“When you get to the point where you need it but can’t afford it, what do you do?” Pattison said. “And I think that’s where a lot of people are in eastern Montana.”
A PSC staff analysis, however, found an increase, albeit lower than what MDU requested, would be merited.
The staff report said MDU had made capital investments in upgrading or replacing “purported critical infrastructure.” The staff report also said MDU had a rate of return and return on equity that were too low and inconsistent with standards in a couple of U.S. Supreme Court cases.
Commissioner Jennifer Fielder said MDU has been one of the better companies the PSC works with, but she agreed the time wasn’t right for approving an interim rate increase.
“I’d like to see the full case move forward, and I’d like to examine it carefully and make our decision after we’ve had a chance to review the evidence,” Fielder said.
In a statement following the decision, Dunphy, also a member of the Northern Plains Resource Council and Eastern Montana Resource Council, praised the decision.
“I’m really glad that the PSC stuck up for the people of eastern Montana instead of this corporation,” said Dunphy in a statement from the conservation group. “This will really help young families, folks on fixed incomes, and elderly people this winter. Eastern Montanans are struggling — wages have not kept up with inflation or costs of groceries, gas, housing, and childcare.”
But Dunphy also said MDU will come back asking for more, the full 16.4%, in February.
“As members of the public, we’ll continue to ask questions and hold these corporations accountable,” she said. “It’s encouraging to know that the commission won’t be a rubber stamp for these rate increase in the future.”