The proposed settlement addresses costs associated with providing transmission service and the pass through of costs to provide ancillary services. The settlement revises the transmission rate structure from one based on load ratio share to a stated rate for network customers. Using a stated rate reportedly provides rate certainty for transmission customers and NorthWestern Energy.
As a result of settlement negotiations with intervening parties, a new stated rate of $3.16 per kW for each month will be established for network and point-to-point customers. NorthWestern Energy said that this agreement does not affect retail customers in Montana as their relevant transmission costs are part of the pending Montana general rate case filing.
The proposed rate for point-to-point customers represents an increase of about 1.94%, which equates to an annual increase in gross margin of approximately $3 million. The company recognized approximately $1.6 million of this increase in gross margin in 2007.
