Brian Vogel

Taxes.

There are many opinions about what is fair, what is affordable, and what is the wisest way to spend taxes. There are many opinions about whether some people are getting a deal while others are taking on too much.

Some of the statements made during the campaign about NorthWestern Energy and Montana property taxes are outright false and misleading.

It is important to know the facts.

In Montana, NorthWestern Energy is the largest individual property taxpayer in the state, by a significant amount. Residential property taxpayers contribute the largest amount, as a group, to property taxes in Montana.

Property taxes are an ongoing expense on NorthWestern Energy customers’ bills. That means when taxes go up, customer bills go up, and when they go down, customer bills go down.

Fact

Montana property taxes are collected by NorthWestern Energy through customer accounts for the state of Montana, schools, counties, cities, and various special districts.

Fact

Our state has a multi-class property tax system with different assessment methods and rates for each classification. For example, taxes on Class 9 (pipelines and some electric utilities) are set at $6,000 for every $100,000 of property value calculated using 500 mills. Taxes on Class 5 (which includes rural electric and telephone cooperative properties) are set at $1,500 for every $100,000 of property value calculated using 500 mills. For Class 4 (residential real estate), taxes are set at $675 for every $100,000 of property value calculated using 500 mills.

Fact

About two-thirds of NorthWestern Energy’s assets in Montana are Class 9, meaning they are taxed at the top rate of 12%.

Fact
Another third of our assets fall into Class 13 and are taxed at a rate of 6%.

Fact
Companies include their property tax costs in the price of their goods and services. NorthWestern Energy is more transparent.

Fact
More than 10% of NorthWestern Energy’s residential rates come from Montana property taxes, which are passed through to customers’ bills. That’s about €11.30 one month for our typical residential electricity customer and approximately €5.89 per month for our typical residential natural gas customer.

Fact
NorthWestern Energy provides electricity and natural gas in South Dakota and natural gas services in Nebraska.

Compared to Montana, approximately 2.30% of NorthWestern Energy’s household electricity 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 cent respectively per month for our typical residential electricity and natural gas customers in South Dakota.

In Nebraska, 1.08% of our residential natural gas rates are due to state property taxes, or approximately 46 cent per month for our typical private customer.

Fact
If NorthWestern Energy’s property taxes in Montana go down, which happened last year, customer rates will go down, which they did on January 1, 2024. If NorthWestern Energy’s property taxes in Montana go up, customer rates will go up. State property taxes are an ongoing expense on customers’ bills.

Montana property taxes pose a hurdle for NorthWestern Energy as we strive to keep rates as affordable as possible for our Montana customers.

Montana is home to more than 1,200 NorthWestern Energy 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 collected correctly.

Brian B. Bird is president and CEO