IOUX FALLS, S.D. (AP) — Northwestern Energy says it wants to sell its unregulated stake in a Montana coal-fired electricity generating plant for $404 million.

 

The buyer, Bicent Power Co. LLC, has agreed to an all-cash for the purchase of NorthWestern's approximately 30 percent interest in Colstrip Unit 4. The 740-megawatt facility is in Colstrip, Montana.

Before closing, however, NorthWestern will ask the Montana Public Service Commission whether the Colstrip Unit 4 interest should be included in NorthWestern's rate base. If the asset is placed in the utility's rate base the sale to Bicent will be terminated, NorthWestern said.

Bicent is an independent power generation company headquartered in Easton, Md. Bicent and its affiliates own generation assets in Montana, California, Colorado and Georgia. Bicent is owned by affiliates of Beowulf Energy and Natural Gas Partners.

"We are excited to be working with NorthWestern on a transaction that increases our existing presence in Montana," said Paul Prager, president and chief executive officer of Bicent. "This agreement reflects Bicent's commitment to bring Montana customers the advantages of an increasingly competitive electric generation market."

As part of the Agreement, Bicent is committing to NorthWestern 111 to 222 megawatts of power from Colstrip Unit 4, as existing long-term contracts expire, at a price of $3 per megawatt hour less than the Mid-Columbia Electricity Index and 50 megawatts of power generated in Montana at below index for the period of November 1, 2010 through December 31, 2020.

NorthWestern expects the transaction to close or to conclude the rate base process with the Montana PSC in the fourth quarter of 2008.