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We serve gas and electric to customers in the western two-thirds of Montana and eastern South Dakota. We also have gas service in Nebraska, and serve electricity to Yellowstone National Park.
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Enriching Lives Through a Safe, Sustainable Energy Future
Enriching Lives Through a Safe, Sustainable Energy Future
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Enriching lives through a safe sustainable energy future.
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Working together to provide safe, reliable and innovative energy solutions that create value for customers, communities, employees, and investors.
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SERVICE: Safety, Excellence, Respect, Value, Integrity, Community, Environment
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Facts are important when it comes to NorthWestern Energy’s Montana property taxes
Date: Sep 6, 2024
TYPE: News
By NorthWestern Energy President and Chief Executive Officer Brian Bird
Taxes.
Opinions about what’s fair, what’s affordable and what’s the wisest way to spend taxes are abundant. Opinions about whether some get a deal while others shoulder too much are plentiful.
Some statements being made this campaign season about NorthWestern Energy and Montana property taxes are flat out wrong and misleading.
It’s important to know the facts.
In Montana, NorthWestern Energy is the largest single property taxpayer in the state by a significant amount. Residential property taxpayers contribute the largest amount, as a group, of property taxes in Montana.
Property taxes are a flow through expense on NorthWestern Energy customer bills – which means if they go up, customer bills go up and if they go down, customer bills go down.
Fact
Montana property taxes are collected by NorthWestern Energy through customer bills for the state of Montana, schools, counties, cities and a variety of special districts.
Fact
Our state has a multi-class property tax system with different valuation methods and rates for each classification. For example, the taxes on Class 9 (pipelines and some electric utility property) are $6,000 for every $100,000 of property value calculated using 500 mills. Taxes on Class 5 (which includes rural electric and telephone cooperative property) is set at $1,500 for every $100,000 of property value calculated using 500 mills. For Class 4 (residential property) taxes are set at $675 for every $100,000 of property value calculated using 500 mills.
Fact
About two thirds of NorthWestern Energy’s Montana assets are Class 9, which means they are taxed at the highest rate of 12%.
Fact
Another third of our assets are Class 13 and are taxed at a 6% rate.
Fact
Businesses include their cost of property taxes in the price of their goods and services. NorthWestern Energy is more transparent.
Fact
More than 10% of NorthWestern Energy’s residential rates are due to Montana property taxes, which are flowed through to customer bills. That’s about $11.30 a month for our typical residential electric customer and about $5.89 a month for our typical residential natural gas customer.
Fact
NorthWestern Energy provides electric and natural gas in South Dakota and natural gas service in Nebraska.
By comparison to Montana, about 2.30% of NorthWestern Energy’s electric residential rates and 0.83% of residential natural gas rates in South Dakota are due to South Dakota property taxes. That’s about $2.59 and 33 cents a month, respectively, for our typical South Dakota residential electric and natural gas customer.
In Nebraska, 1.08 % of our residential natural gas rates are due to state property taxes, or about 46 cents a month for our typical residential customer.
Fact
If NorthWestern Energy’s Montana property tax liability decreases, which happened last year, customer rates lower, which they did Jan. 1, 2024. If NorthWestern Energy’s Montana property tax liability increases, customer rates increase. State property taxes are a flow through cost to customer bills.
Montana property taxes are a hurdle for NorthWestern Energy as we work to keep rates as affordable as possible for our Montana customers.
Montana is home for more than 1,200 of NorthWestern Energy’s employees who work and raise their families in the communities we serve. More than half of Montanans are NorthWestern Energy customers.
We want taxes to be fair and properly assessed.