NorthWestern Energy billing problems spark outrage

Posted at 10:13 AM, Feb 16, 2017
and last updated 2017-02-16 11:13:37-05

NorthWestern Energy is under fire after thousands of customers saw startling numbers on their latest bills from the utility company.

The Problem

For some people, their bills skyrocketed from $78 in January to $397 in February. Dozens of people chimed in on social media, expressing similar experiences with their utility bills doubling and even tripling.

“Our bill has tripled, going from around $220 all the way up to $600 for this month,” said NorthWestern Energy customers Landon and Janina Lamb. 

“My bill went from $188 in January to $535 this month! I try to budget for higher power bills in the winter but this is outrageous,” said Shari Grahm, another concerned NorthWestern customer. “I’m hoping to be able to spread the increase over the next couple of months. I’m worried about my son and his wife.”

A couple from Townsend, Lauren and Duane Simonich, started a petition, Fair Utilities for Montana, to call attention to the issue. They have also created a website.

“We saw all these people who were angry about it, so it took all of five minutes to put a petition together so that we could at least join together and get something done,” said Duane Simonich.

His wife Lauren said she kept seeing on social media posts saying, “Someone needs to do something, we need to do something and we just decided to take the lead on it.”

The Simonich’s bill jumped almost $500, from $216.87 in January to $768.01 in February.

NorthWestern released a statement Tuesday saying, “Cold weather and inaccuracies in estimated bills are behind concerns about high energy bills among NorthWestern Energy customers in the Helena area.”

“So when you think about it, our bill is $800. It’s going to take me four months just to pay off that bill at what we can afford,” Jennifer said. “Then on top of that you add on top of that four more months of power bills, how can you catch up?”

For Jennifer, NorthWestern estimating usage is not acceptable.

“I don’t want to be billed on what you think I should be billed, maybe I should be sending you a check for what I think I should I owe you,” explained Lauren.

In this instance, “NorthWestern experienced technical issues with meter reading equipment in some areas of its Helena Division,” the release explained.

“I don’t really buy their very vague statement, that it’s just a technical issue. It’s almost like a slap in the face for customers,” Lauren said with frustration.

NorthWestern’s Community Relations Manager Howard Skjervem said, “Our goal is to read every meter every month.”

But that was not the case for these customers in January.

“We had a vehicle that reads meters and there was a problem with one of the vehicles itself,” explained Howard Skjervem. “The equipment, we can’t move it from one [vehicle] to another quickly, so we had to have a mechanic fix the vehicle.”

About 2,300 customers between Helena and White Sulphur Springs were impacted by this estimation.

NorthWestern used estimates based on usage levels in the same period a year earlier. Montana law requires utility companies to take actual meter readings twice a year, allowing them to estimated usage ten months out of the year.

After actual readings are taken, any discrepancy is applied to next month’s bill.

“It’s not fair for us as consumers to be paying what you think and then having to make up for it when you do make your reading,” Lauren said.

For the Simonich couple, they believe NorthWestern never even came to their property to get a reading from their propane meter.

“Our propane meter is not a smart meter, and it’s in our backyard with a locked gate and three large dogs,” said Lauren Simonich. “So I don’t’ think our meter was even read.”

This winter has also been much colder for a longer period than last winter.

“The month of December was 16 percent colder than the previous year and that’s a pretty big difference in terms of what you have to do regarding to electricity and natural gas to heat that house just to maintain the temperature from the previous year,” explained Brad Johnson, chairman of the Public Service Commission.  “So everything else equal, you can expect a 16 percent increase in your heating bill.”

NorthWestern actually has numbers that prove it was even colder; December 2016 was 21 percent colder than the previous year and January 2017 was 32 percent colder than January 2016.

“Those two factors alone for December and January meant we were going to use a lot more energy just to keep our homes at the same temperature,” Johnson said.

Customers in the area say not only did their total usage skyrocket, but the actual rate increased as well. Some people say the increase is due to an increase in NorthWestern Energy’s property taxes going up.

This year NorthWestern plans to collect an additional $19,299,068 to cover property tax increases.

The utility increased rates by 5.83 percent for electricity and 3.73 percent for gas to cover the increase.

While NorthWestern’s rates are regulated by the PSC, Montana law allows the utility company to pass along the increased property taxes to ratepayers, basically automatically.

“The only thing that the Commission can have is to check their arithmetic, to make sure that the actual number is being charged to the ratepayer, is accurate,” Johnson said. “That’s frustrating to us; I think it’s been a well-kept secret until now.”

Last month the PSC struck and agreement with NorthWestern Energy requiring a line item on billing statements to explain the property tax related rate increases.

“At least now we’ve brought some transparency to that, and ratepayers can look at their bills and say ‘ah-ha, I’m paying x number of dollars each month to the state of Montana for those taxes that NorthWestern is collecting from me’,” Johnson said.

The process of passing along the property taxes is called a tax tracker, and the PSC is working to repeal it by standing behind a proposal in the Legislature, House Bill 189.

“We have in the last three legislative sessions tried to get that changed, unsuccessfully,” Johnson said.

What’s Next

NorthWestern said they will be sending a letter to every customer who had their usage estimated Thursday, explaining what happened and why their bills are higher.

“If they’re not able to pay their bill right now, call our office and the customer service department will be able to work out an arrangement with them pay the bill over the coming months,” Skjervem said.

One option for customers is budget billing.

“It balances out their usage over 12 months so in the winter months, when the bills are high you’re not paying that high bill, and summer when they [bills] are low you’re not paying that either,” Skjervem explained.

While budget billing is an option, every person must be up to date with their payments.

Skjervem says there are also programs available to customers for energy assistance.

Another option for people who want to check their energy usage is to ask for an energy audit.

“We recommend everyone having an energy audit, it’s free of charge,” said Skjervem. “Get them set up so they can really see what’s using energy in their home.”

Anyone can call the customer service department at 1-888-497-2669 to get set up with a payment plan, or enroll in their budget billing plan.

The Simonich family said the petition they started has started to gain traction, with more than 1,502 signatures and more than 480 comments from people who share similar concerns.

Lauren Simonich said she mailed letters to the PSC, Better Business Bureau, NorthWestern Energy Corporate as well as Senators Jon Tester and Steve Daines expressing her concern and pleading for change.

The PSC said their biggest issue is the property tax process and fixing the way the tax tracker is handled will be their focus.

“The whole system is broken,” said Johnson. “When all the smoke clears, it’s the ratepayers that end up taking it on.”

PSC Responds

The Montana Public Service Commission on Thursday released the following statement:

“In a Feb. 14 news release, NorthWestern Energy released a statement responding to an online petition and other consumer complaints, which raise the issue of high utility bills. In that release, NorthWestern stated: ‘As a regulated utility, our rates are thoroughly reviewed and approved by the Montana Public Service Commission with involvement from independent third parties.’ This statement was reported widely in the Montana news media.

“Contrary to NorthWestern’s claim, the Commission did not approve the latest substantial rate increase that consumers of NorthWestern are experiencing. State law allows the utility to automatically increase its rates to flow through to consumers the increase in property taxes levied by the Montana Department of Revenue. This is just what NorthWestern did. These rate increases went into effect on January 1 without PSC approval. The PSC had a number of questions concerning whether NorthWestern was properly allocating those increases to its retail customers. NorthWestern declined to answer those questions, instead automatically implementing the rate increase.

“As the elected officials responsible for guaranteeing that rates are just and reasonable, the Commission is extremely frustrated by existing state law. The law as it exists today fails to give customers the protections traditionally provided to those who do not have a choice in the provider of a service they receive from a monopoly. This law, codified at Montana Code Annotated 69-3-308, is being reconsidered in the state legislature.

“House Bill 189, carried by Rep. Daniel Zolnikov (R., Billings), would repeal this automatic rate adjustment provision. However, the bill is being held up in the House Energy and Technology Committee following vigorous lobbying by NorthWestern. Effectively, NorthWestern is telling consumers in a news release that the PSC approves its rates, even while insisting that legislators resist a bill that would give the PSC powers to do just that in this situation. The Commission urges members of the public to contact their legislators on this matter, and for the House Energy committee to consider and pass HB189.

“The PSC is also supporting legislation to eliminate a special carve-out in state law that benefits only NorthWestern. HB 193, carried by Rep. Tom Woods (D., Bozeman), would allow the PSC to establish incentives for NorthWestern to control its purchased power costs. The bill has passed the House and is scheduled for a hearing before the Senate Energy and Telecommunications Committee on Thursday, March 16, at 3 p.m.”