Dive Brief:

• A rate increase requested by Montana-Dakota Utilities has drawn the scrutiny of regulators in Montana, who earlier this month issued a statement saying they would work to ensure the utility had proposed the least-cost method of meeting demand.
• The rate increase includes changes to MDU's net metering provisions, including an additional charge solar advocates say is meant to stifle the market.
• In June, MDU filed for a rate increase in excess of 20%, which would boost residential customers’ monthly bill by about $14.80 a month.

Dive Insight:

The size of MDU's proposed Minnesota rate increase is “unprecedented,” according to The News Tribune. In June the utility said the proposed increase was $11.8 million annually over current rates, or a 21.1% overall increase.

The utility serves about 26,000 customers in Montana.
 
According to Nicole Kivisto, president and chief executive officer of Montana-Dakota, the utility requires such a steep increase because of  “projects to comply with federal environmental regulations; additional electric generation to serve the growing needs of our customers; and additional transmission services to meet demand and provide for added reliability.”

The proposal has angered solar advocates who point to an additional charge on customers who produce their own power. According to the Tribune, the charge is $1.50/kW of demand, which the utility said reflects the cost to provide service.

Diana Maneta, director of Montana Renewable Energy Association, told the Tribune that she doubted MDU's need for the fee because customers generating their own power also generate savings for the grid.  

"People are getting interested in installing solar, and we hate to see MDU put up a barrier at this time," she told the paper.

Montana-Dakota’s last electric rate increase was $2.6 million, or 6.23%, in 2011.

Montana regulators responded by saying they would place the proposal under close scrutiny.

PSC Vice Chairman Travis Kavulla said in a statement that the commission would "review the request to  determine if the utility took the most cost-effective approach to supply their customers.

Commissioner Kirk Bushman laid the increase on the federal government, saying: “Utilities like MDU will have to continue to invest millions to meet new federal requirements, and I expect utilities will continue to request larger rate increases than they have in years past because of these costly regulations."