NorthWestern Makes Changes to Customers Bills; Specific Tax Information Added

Beginning in early January, NorthWestern Energy customers in Montana will see changes on their monthly bills, highlighted by a specific breakout of the amount of property and other taxes included in the charges.

The change comes after the Montana Public Service Commission ordered NorthWestern to disclose the tax information to customers. The tax information is intended to provide additional transparency regarding the amount of taxes paid by the utility’s customers.

While the display of tax information on customer bills is new, it does not represent a new charge. Taxes have been included in monthly bills for many years but were bundled in with other charges on the bill. Starting this month, taxes have been unbundled from other charges in an effort to give customers a better understanding of taxes paid as part of their utility bill. NorthWestern’s property taxes are a significant portion of our cost of providing utility service.

"The recent modification to our customer bills showing the actual portion related to our Montana property tax costs will let customers see for themselves, the impact it has on our cost of providing utility service," said Pat Corcoran, NorthWestern’s vice president, Government and Regulatory Affairs.

While the tax information does not reflect a new charge, most customers should expect to see higher bills in January. Bills typically climb because of increased energy usage in the cold-weather months. Montana saw above-average temperatures in November 2016 and below average temperatures in December 2016. The cold December weather will result in larger bills in January since utility bills reflect the usage for the past month not the current month. Additionally, the amount of property tax paid by NorthWestern Energy and its customers, the largest portion of the tax charges on customer bills, has increased significantly from 2015 to 2016.

The utility’s property tax bill increased from about $122 million in 2016 to about $136.2 million in 2016. The 2016 amount was reached after lengthy negotiation with the Montana Department of Revenue over the valuation of NorthWestern property in the state. The initial valuation from the Montana Department of Revenue would have produced a property tax bill of more than $163 million.

The increase in 2016 property taxes will add about $2.03 per month to a typical residential electric bill. A typical total residential natural gas bill will increase $4.09 per month. In general, Montana property taxes account for 13 to 16 percent of total electric and natural gas bills.

While NorthWestern, like other businesses, shares its tax obligation with customers, the utility and its shareholders shoulder a significant amount of the tax burden. Since 2009, the company has paid more than $30 million in property taxes that have not been billed to customers.

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About NorthWestern Energy (NYSE: NWE)

NorthWestern Energy provides electricity and natural gas in the Upper Midwest and Northwest, serving approximately 701,000 customers in Montana, South Dakota and Nebraska. More information on NorthWestern Energy is available on the company’s website at http://www.northwesternenergy.com.