NorthWestern Energy will not be able to charge customers for market power purchased by the utility during a 2013 outage at the Colstrip power plant.
A decision issued Monday by Yellowstone County District Judge Rod Souza upheld the same conclusion reached by the Montana Public Service Commission in August 2016.
The 2013 Colstrip outage of Unit 4 lasted seven months. NorthWestern, which owns 30 percent of the unit, had spent $8.2 million to purchase market power during that time.
After the 2016 PSC decision, NorthWestern took the case to district court, arguing that the PSC was wrong to deny the utility the permission to recoup the power costs.
In his order Monday, Souza backed up the PSC's assessment of NorthWestern's oversight leading up to the outage and that the situation didn't meet the legal threshold to pass the cost on to consumers.
PSC vice-chairman Travis Kavulla, R-Great Falls, said in a press release the decision was as important as the potential costs to customers.
"It's also welcome because it establishes a clear precedent that there are times when the utility must take responsibility when its property fails to perform," he said, "and cannot simply hide behind contractors or other third parties to avoid that responsibility."
A NorthWestern spokesman said the company is still reviewing the ruling.