HELENA — NorthWestern Energy CEO Bob Rowe told state regulators Thursday that the company’s $870 million purchase of a dozen hydroelectric dams is a solid plan to rebuild the utility and benefit customers, and that suggestions that the company will unduly profit are wrong.
He also said he’s surprised the decision whether to approve the proposal has become “complicated, acrimonious litigation,” and should instead be fairly straightforward.
“If we can’t determine that the price is in the public interest, I don’t know what we do,” he told the Montana Public Service Commission, which must decide how and whether to approve it.
“We have tried to put together something that really does make sense,” he continued. “If the commission can’t get to the point that $870 million (should be approved) to dedicate these assets to the state of Montana for perpetuity, then I’m really sorry.”
Rowe spoke on the eighth and next-to-last day of the PSC’s hearing on whether to approve the purchase and allow NorthWestern to charge the $870 million cost to its 340,000 electric ratepayers in Montana.
The five-member PSC, which regulates utilities in Montana, its staff and others have spent the past two weeks questioning company executives about the proposal, which would increase electric rates by 6.5 percent.
The PSC will decide later this year whether to approve the deal or perhaps restrict how much of the purchase price NorthWestern can recover from ratepayers.
Earlier this week, a consultant for the Montana Consumer Counsel said if the PSC approves the deal without changes, NorthWestern will get a handsome, guaranteed profit and ratepayers will pay above-market prices for many years.
The Consumer Counsel has suggested changes to the deal it says would shift more of the risk and cost of the acquisition to the company.
Rowe took after the consultant’s testimony Thursday, saying the purchase price and the dams are very much in the public interest.
“When I read (his) initial testimony, I felt that (he) considered us to be a bunch of crooks, and not even a very competent bunch of crooks,” Rowe said. “We’ve worked very hard to build a financially sound company that attracts high-quality investors.”
NorthWestern has been working to rebuild the utility that was dismantled by its predecessor, Montana Power Co., during deregulation of the late 1990s, including the selling off of the hydroelectric dams whose power had been dedicated to customers’ use, he said.
Re-acquiring them now is a chance to start over, to obtain power plants that will be around “for another 100 years” and provide reliable power at the cost of production, he said.
When asked by a PSC attorney why the dams couldn’t be sold off again, prompted by another change in regulatory law, Rowe replied: “I hope that our memories are long enough that we won’t be that stupid again.”
PSC attorney Justin Kraske noted that NorthWestern has agreed to pay a price $347 million more than the book value of the 11 hydroelectric dams and one storage dam, and asked whether NorthWestern could accept a decision that reduced the amount of money it could recover in rates.
For example, would NorthWestern walk away from the deal if the PSC decided to reduce the company’s revenue by $4 million a year, he asked.
Rowe repeated that he would be “very, very sorry” if the commission couldn’t approve NorthWestern’s entire proposal.