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Montana power co-op trustee fights $46M claim

Published on NewsOK Modified: April 22, 2013 at 6:27 pm •  Published: April 22, 2013

If U.S. Bankruptcy Judge Ralph Kirscher accepts those values, the cooperative would avoid interest charges, attorney fees and other costs that could add up to as much as $100 million, said Parks.

But if those charges and costs are included, Parks said Southern Montana's members would be on the hook to repay the amounts in coming years.

"The only source of debt payments are the members themselves," Parks said Friday.

Just how much electricity bills could increase is unclear.

On Monday, Kirscher issued an order that allows the trustee to keep confidential key details of the co-op's proposed reorganization plan, such as how much it plans to pay for power under a 10-year deal with Morgan Stanley Capital Group.

Kirscher said the order was necessary to protect proprietary information.

The bankruptcy already has seen one of Southern Montana's members, Yellowstone Valley Electric Cooperative, break away under a proposed settlement.

Lawsuits from two other members that want out of Southern Montana — the City of Great Falls and Beartooth Electric Cooperative — are pending as part of the bankruptcy case.

A hearing on the make-whole payments and the value of Southern Montana's assets is scheduled for July 29 in Missoula before Kirscher.

Disputes over the asset values and other issues could drag out the case for months, possibly into 2014, according to Doug James, an attorney representing Great Falls in the case.

James said the outcome could saddle the city's electricity customers with high rates even though the city did not participate in the decision to build Highwood.

"This is a tragic case and it will be detrimental for consumers and for the Montana economy in that Southern members are going to have to pay for energy costs that potentially will be above market rates," he said.