NorthWestern Corporation d/b/a NorthWestern Energy (NYSE: NWE) announced it received an Order from the Federal Energy Regulatory Commission (FERC) late yesterday denying its May 2014 request for rehearing. The request for rehearing challenged a September 2012 initial decision from a FERC Administrative Law Judge (ALJ) that addressed cost recovery at NorthWestern's Dave Gates Generating Station (DGGS) that was later summarily affirmed by the FERC. NorthWestern has been recognizing revenue consistent with the ALJ's initial decision and does not anticipate an impact to ongoing earnings in 2016 as a result of the order but we will continue to evaluate the potential for an impairment charge as discussed below. As of March 31, 2016, we have cumulative deferred revenue of approximately $27.3 million plus accrued interest of $3.3 million that is required to be refunded to wholesale customers within 30 days of the order.
"We are obviously extremely disappointed by the decision from FERC," said Vice President and General Counsel Heather Grahame. "We will be appealing this decision to the United States Court of Appeals."
In addition to the quarterly impairment analysis NorthWestern has been conducting, this order from FERC will require them to once again evaluate whether they can adequately recover the costs associated with DGGS; NorthWestern has not yet made a final determination.