MDU Customers Will See Electric Bill Increase On Average $10.32 Per Month Starting April 1st

Customers of Montana-Dakota Utilities will see their electric bills go up $10.32 a month on average starting April 1.

Tuesday, the Montana Public Service Commission approved an interim rate increase for the monopoly utility.

The request had been pending for five months, and the PSC took up the matter a couple of times, but didn’t approve any increase until this week.

A staff report said MDU argued the Public Service Commission’s “failure or refusal” to act on the interim request was “an arbitrary and capricious abuse of discretion.”

It also said intervenors, including the Montana Consumer Counsel, had not opposed the rate increase. The Consumer Counsel advocates on behalf of customers.

MDU argued it is “undisputed” that the company was under-earning on electric operations, so without an interim increase, the rates were confiscatory, or unfair to the utility, the staff memo said.

The PSC said MDU’s costs to provide electricity to its Montana customers increased in the three years since its last rate case. MDU requested a revenue increase of $14.1 million, but the PSC’s decision on the interim rate gives the utility $7.7 million as the case proceeds, the PSC said.

In an analysis of legal standards, PSC staff said the U.S. Constitution protects a public utility’s property from the effect of a confiscatory rate.

“Any rate that is so low as to deny a utility a reasonable opportunity to earn a fair return on property used to provide service is unconstitutional,” the staff memo said.

MDU serves roughly 25,500 customers in Montana. An MDU spokesperson said the utility would be able to provide the total bill impact by Thursday.

Commissioner Brad Molnar moved to deny the rate increase for numerous reasons, including because he said MDU hadn’t conducted a robust search for generation or established its choices were “of maximum benefit to the ratepayers.”

“Important facts are missing, so they need to be addressed,” Molnar said.

Commissioner Jennifer Fielder said she too has had concerns with MDU’s application, and previously voted against increases.

However, Fielder offered a motion instead to grant a portion of MDU’s request, 55%.

Fielder said PSC staff closely reviewed the case, and it was important to protect ratepayers but also allow a regulated utility to recover legitimate costs.

She said her proposal would mean a roughly $10 monthly increase for the average customer starting on April 1 instead of a $14 monthly increase starting Jan. 1, 2026.

“This just balances the need for the company to be able to recover legitimate costs while ratepayers aren’t straddled with potentially higher costs that aren’t legitimate,” Fielder said.

In the meantime, she said, the PSC will continue to do a full review of the case to determine a final rate.

On its website, MDU notes it filed the case at the end of September 2025, and the PSC typically has up to nine months to issue a decision.

PSC President Jeff Welborn and Commissioner Annie Bukacek joined Fielder in supporting the interim increase. Commissioner Randy Pinocci and Molnar opposed it.