BUTTE, Mont., Nov. 9, 2018 /PRNewswire/ -- NorthWestern Energy has reached an agreement with the Montana Consumer Counsel, Montana Large Customer Group, Human Resource Council, District XI and the Natural Resources Defense Council, Montana Environmental Information Center and the Northwest Energy Coalition that will provide a reduction in customer bills as a result of the Tax Cuts and Jobs Act signed in December 2017. The parties are asking the Montana Public Service Commission to approve the agreement.
If approved by the commission, the settlement will provide a one-time credit of $20.5 million to eligible customers commencing within 30 days of MPSC approval. This includes a $19.2 million credit to electric customers and $1.3 million credit to natural gas customers. To be eligible for a credit a customer must have been a NorthWestern Energy customer as of September 30, 2018 and remain a customer on the date the refund is provided. Under this settlement, average eligible residential electric and gas customers will receive a credit of approximately $24.00 and $3.50, respectively.
"Because our rates are based on the cost to provide the service, changes to those costs eventually flow-through to our customer bills when we reset rates in a formal review process," said Bob Rowe, President and CEO. "In this case, the reduction to income tax expense will immediately be passed on and provide a long-term benefit to our customers."
In addition to eligible customers receiving a one-time bill credit, the settlement also reduces rates for all natural gas customers by approximately $1.3 million annually beginning January 1, 2019, provides funds for low-income energy assistance and weatherization. The settlement also reflects the agreement of the parties to support our request to address hazard tree removal in our current electric rate review filing.
"We are happy when we can work with parties to reach a settlement that, with the commission's approval, provides a bill credit to our customers during the holidays," said Brian Bird, CFO. "This settlement extends beyond 2018 and captures the income tax reductions we expect to realize for customers until new rates are in effect for both electric and natural gas."
NorthWestern previously disclosed a range of possible financial impacts related to the outcome of the Tax Cuts and Jobs Act in Montana and indicated that a portion of the resolution may be excluded from 2018 adjusted non-GAAP earnings guidance. If this settlement is approved, NorthWestern expects to exclude from 2018 earnings amounts in excess of the 2018 reduction in income taxes.
NorthWestern Energy provides electricity and natural gas in the Upper Midwest and Northwest, serving approximately 718,300 residential and business customers in Montana, South Dakota, Nebraska, and Yellowstone National Park. With approximately 1,600 employees, NorthWestern operates 28,000 miles of electric transmission and distribution lines, 9,710 miles of natural gas lines plus storage facilities, and owns significant electric generation assets. For more information on Northwestern, please visit www.northwesternenergy.com.
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SOURCE NorthWestern Energy