NorthWestern Energy receives regulatory rate approval on Battle Creek natural gas production
BUTTE -- The Montana Public Service Commission has approved the placement of NorthWestern Energy Battle Creek natural gas assets into rate base.
The commission approved, on a 4-1 vote, a stipulated agreement between NorthWestern Energy and the Montana Consumer Counsel that established a capital structure consistent with other recent rate cases including a return on equity of 10%. The stipulation also establishes a framework for evaluating future acquisitions, such as the recently announced Bear Paw field, that includes a unit cost market price crossover point to mitigate risk should market prices turn out different than the forecast prices used to evaluate the acquisition.
NorthWestern Energy purchased the proven Battle Creek production field and gathering system in 2010 for $12.4 million as part of an overall strategy to provide rate stability and customer value through the addition of regulated assets that are not subject to market forces. There is no immediate rate impact associated with this filing since revenue is already being collected in rates through the natural gas tracker.