Article published May 24, 2007

PSC rejection of BBI deal may revive city’s role in public utility consortium

By GWEN FLORIO

Tribune Capitol Bureau

HELENA — Now that NorthWestern Energy might be back on the market again, Great Falls and other Montana cities might once again be interested.

Emphasis on might.

Great Falls was among a consortium of five Montana cities that previously sought to buy NorthWestern and turn it into a public utility. That plan died a year ago with the announcement that NorthWestern would be sold to Babcock & Brown Infrastructure of Australia.

But the state Public Service Commission’s rejection this week of the BBI deal could revive the cities’ plan, Great Falls Assistant City Manager Cheryl Patton said Wednesday.

“I would assume we’d still be interested in pursuing that opportunity if it were presented,” she said, stressing that the cities haven’t had time to discuss the possibility.

“The cities were always interested in trying to bring public power and public ownership of that essential utility to the state of Montana,” Patton said.

Tuesday, the PSC voted unanimously to draft an order rejecting the sale to BBI, saying the proposed $2.2 billion deal posed too great a risk to NorthWestern’s 300,000 ratepayers in Montana.

Across the board, commissioners said they worried that BBI would return too much money to shareholders, leaving consumers vulnerable.

NorthWestern spokeswoman Claudia Rapkoch said Wednesday that the company will await the PSC’s formal order, expected in late June or early July, before deciding what to do.

After that order is issued, interested parties have 10 days to seek reconsideration, said PSC attorney Al Brogan. If the PSC denies that request, the companies can then seek a District Court review, he said. 

“That happens more frequently than you realize,” he added.

BBI’s CEO Steve Boulton told The Age, a newspaper in Melbourne, that he was surprised by the commission’s action.

“It appears as though (the commissioners) believe that the standard that has to be achieved for an acquirer of an asset in Montana is that there should be some benefits that flow through to the consumers,” Boulton said. “The standard in our view, and NorthWestern’s view, is such that there should be no harm to consumers as a result of the acquisition.”

NorthWestern’s stock closed at $32.93 on the NASDAQ exchange Wednesday, down $1.87, or nearly 5.4 percent. BBI had offered $37 a share for NorthWestern.