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Crystal Lail, NorthWestern Energy comptroller

CRYSTAL LAIL

When our customers pay their monthly utility bill, it is the amount that matters. We understand that. Our customers expect safe, reliable and affordable utility service available when they need to turn up the heat and turn on a light.

But beneath this essential service is what one of our co-workers has described as “an incredible machine” of dams, wind farms, generating plants, poles, wires, gas wells, pipelines and the people of NorthWestern Energy, who work to keep the machine running smoothly 24/7. NorthWestern Energy is committed to keeping the cost of this service as affordable as possible with energy supplies that are reliable.

NorthWestern Energy budgets for the annual amount of energy our Montana customers will need and estimates what that energy will cost. Market conditions and weather are variables and mean the energy supply forecast and the actual cost don’t match at the end of the year. We mitigate those variable risks, just like Montana’s farmers and ranchers, with planning, market purchases, diversification and owning our own energy resources dedicated to serving our customers in Montana at cost and not market prices.

Prolonged and record frigid temperatures across Montana last winter meant high energy demand in our state at a time when demand was high across the region. The price for energy on the market spiked, a market force that contributed to NorthWestern Energy’s higher actual cost of energy supply than the forecast. As a reference point, we originally forecast to buy approximately 43,200 MWh of energy for less than $1 million ($23.08 per MWh) from the market for the entire month of March 2019. Due to weather and market prices, we ended up paying approximately $8.27 million ($859.36 per MWh) to purchase 9,632 MWh of energy on the market to meet high customer demand over a 2 day period alone in March 2019.

This year, the cost for the typical NorthWestern Energy residential customer will increase about $3.09 or 3.41% in their monthly bill, if approved by the Montana Public Service Commission.

Energy supply is a piece of NorthWestern Energy’s utility bill, which also includes the rate to deliver energy and associated state and local taxes. NorthWestern Energy’s Montana customers pay monthly bills that are well below the national average and we work diligently to manage costs and limit rate increases.

Today the energy portfolio is more than 60% carbon-free and includes 10 hydro facilities, 364 MW of wind generation and solar that serves our 374,000 Montana electric customers. We are stewards of this great state’s landscape, environment and resources, working for what is best for our neighbors and Montana.

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Crystal Lail is NorthWestern Energy vice president and controller in Sioux Falls, S.D.

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Opinion editor for The Billings Gazette.