NorthWestern Energy, the utility that provides service to more than 300,000 Montana customers, must pay a $1 million penalty for violating business practice standards established by the Federal Energy Regulatory Commission (FERC). The fine, one of five such settlements totaling $22.5 million announced Jan. 18, marks the first time that FERC has used its new expanded authority to levy civil penalties under legislation Congress passed in 2005.
According to FERC, NorthWestern’s penalty arises from 83 instances in which the utility failed to respond in a timely manner to transmission service requests, which would generally be made by energy companies, not individual customers. FERC says its investigation stemmed from a complaint to its enforcement hotline, and that NorthWestern didn’t profit from its alleged violations or substantially harm its customers. As part of the settlement, NorthWestern neither admits nor denies any violations.
NorthWestern spokeswoman Claudia Rapkoch, however, says that the “vast majority” of the 83 violations arose from technical mistakes involving the way it managed transmission requests.
“There was no effect to any actual customer or any harm done to a customer—it was a kind of misunderstanding,” Rapkoch says.
Still, she says, the company “now know[s] a little bit better” and has hired an outside firm to review NorthWestern’s processes and make sure they meet requirements.
The penalty may not ultimately mean much to the pocketbooks of average Montana customers, says Al Brogan, staff attorney for the utility-regulating Montana Public Service Commission (PSC).
Brogan says it’s conceivable that NorthWestern could seek to recover the expense when requesting rate changes, which it periodically does. And while he can’t predict how the PSC commissioners would react to such a request in the future, Brogan says, “I would be really surprised if [the PSC] were ever to allow a penalty like that to be included in rates.”
For her part, Rapkoch puts the question to rest by confirming that NorthWestern won’t seek to recoup the penalty’s expense through a rate increase.