In May, the company asked the state Public Utilities Commission for approval of a 7.2 percent rate increase that would total about $4.1 million annually. The company estimates that residential customers would pay an average of $8.31 more per month.
Chris Nelson, one of the PUC’s three elected members, said the commission has placed the rate increase on hold for 180 days until Nov. 18.
If the PUC hasn’t reached a decision by then, the company has the option of going forward with the full increase, some smaller amount or holding rates steady until the PUC finishes its work.
“It is their burden to make the case,” Nelson said. “The law guides, but we are looking at what’s best in the public interest.”
The PUC sent a total of eight people to Scotland for the hearing. NorthWestern sent four of its South Dakota staff.
“I do feel there is somebody looking out for the little guy out here,” former Scotland mayor Jim Sedlacek said.
He led the petition effort that gathered the 25 signatures necessary under state law to force the informal hearing.
Sedlacek said he called the company on June 8 with questions and was told he would be called back. That hasn’t happened yet, he said. He said he had received similar treatment in the past on another matter.
“This time I thought, ‘Wait a minute, enough is enough,’ ” he said. “I think it’s wrong.”
Pam Bonrud, NorthWestern’s director of government and regulatory affairs, said the company and the PUC staff will work through the evidence and attempt to reach an agreement.
Bonrud, a former executive director for the PUC, said the case would proceed to a formal hearing by the PUC if the sides can’t find common ground.
Sedlacek was one of two townspeople to ask questions during the 80-minute meeting. NorthWestern’s Jeff Decker apologized several times to Sedlacek for no one calling him back.
State Rep. Frank Kloucek, D-Scotland, called on the PUC to be tougher in treatment of rate increases. “Is there an increase you don’t like?” he asked. “Our rural communities are on fixed incomes.”
Commissioner Nelson said the PUC hasn’t allowed the full request from a utility in recent years. He said Otter Tail requested a 9 percent increase and was granted 2 percent. “The law says we have to allow what’s just and reasonable,” Nelson said.