NorthWestern loses Havre Pipeline case

Havre Pipeline Co., largely owned by NorthWestern Energy, must continue to supply its rural customers with natural gas.

That’s the ruling of the Montana Public Service Commission.

At stake was the question of whether the access to natural gas NorthWestern Energy provides to about 90 farm tap customers in remote parts of Blaine, Chouteau and Hill counties are services considered those of a public utility.

Farm tap customers tap into natural gas lines to heat their homes and businesses for a set rate.

“The Commission finds that Havre Pipeline is required by law to provide reasonably adequate services to its farm tap customers,” according to the text of the PSC’s final order.

When the pipeline was being constructed in the 1970s and 1980s, many of these customers signed contracts granting Havre Pipeline right of way easement in exchange for access to natural gas services to heat their homes and businesses.

But the text of the commission's final order showed that since 2013, when NorthWestern Energy purchased the 82 percent share of Havre Pipeline, the quality of service has diminished.

Eric Sell, PSC spokesperson, said that pressure in the lines has been so degraded that many farm tap customers are having trouble properly heating their homes.

Some tap customer became so dissatisfied that they discontinued their services and converted to an alternate source of energy at their own expense, Sell said.

At a public hearing the commission held in October in Hensler Auditorium at Montana State University-Northern, Richard Alke, corporate counsel for NorthWestern Energy, argued the services provided to tap customers are not those of a public utility. Therefore, they were not subject to regulations of a public utility. And thus, he said, NorthWestern can abandon service to farm tap customers.

NorthWestern Energy argues that the wells in the Bear Paw Basin that supply the gas have been depleted.

Alke said that in order to provide the services of a public utility, the gas has to go through a distribution process through which the gas is properly refined.

“The facilities talked about here, have never provided that function,” Alke said at the hearing.

The commission, in its order, disagreed citing a 1995 declaratory ruling issued by the commission in response to a petition from Havre Pipeline.

The ruling said that while the commission “would not regulate gathering portions of the pipeline system” it had jurisdiction over the farm tap service by way of tariffs filed with the commission, which outline the obligations and terms companies enter into with customers.

“The Commission finds that whether the farm tap pulls from the gathering system or transmission lines, it is regulated by the commission as a public utility,” the text of the order stated.

Furthermore, they get “express approval” from the commission, so farm tap services must continue to be provided, it also said.

If NorthWestern can no longer provide such services, Sell said, the company must come before the commission to get its approval.

The commission said in its order that Havre Pipeline must update its tariff, which states the terms of service a company has with its customers “within 30 days to expressly set forth any limitations or unique aspects of the farm tap service, other than conditions precedent to abandonment, which will be handled only in a discreet document.”

Representatives for NorthWestern Energy were not available for comment by printing deadline this morning.