Utility ordered to refund up to $3 million to customers

HELENA — The state Public Service Commission has ordered NorthWestern Energy to refund to customers nearly $3 million it collected after overestimating how much revenue it lost from energy-conservation programs.

Lee Newspapers of Montana reported Friday that starting on Jan. 14, the company’s 325,000 customers will receive a rate credit reduction of about 1.6 percent for five months.

“This would have been a several-million-dollar windfall for NorthWestern Energy,” said Public Service Commissioner Travis Kavulla of Great Falls. “It’s our job to make sure they earn what they’re allowed to earn, but not earn a windfall on the backs of consumers.”

The commission in late October voted 5-0 to order a refund estimated at that time at $2 million to $3 million based on a reported revenue loss from 2006 through 2011 the company said it had by promoting the use of energy-saving light bulbs.

The commission found that a study funded by the company overstated how much electricity was saved through the use of the bulbs and determined a portion of the reimbursements should be refunded through a rate credit.

The commission ordered the utility to refile its statements on how much revenue it lost, using a formula approved by the PSC. The utility on Wednesday filed details on how it planned to get the money back to customers.

The plan calls for residential customers to get about $1.15 million, while business customers will receive about $1.7 million.

The utility said the commission’s decision sends confusing messages concerning energy savings programs by encouraging the company to promote programs but then denying recovery of costs.

“It has a chilling effect on how we could potentially view these programs,” said NorthWestern Energy spokeswoman Claudia Rapkoch following the commission’s decision in October.

The Montana Environmental Information Center also questioned the decision, saying it makes the commission appear to be against energy conservation programs.