HELENA, Mont. (AP) — NorthWestern Energy reached a deal Thursday to buy 11 hydroelectric power plants from PPL Montana for $900 million — more than a decade after its predecessor used deregulation to sell the assets.
NorthWestern Corp. and Pennsylvania-based PPL Corp. announced the deal after the stock market closed. NorthWestern touted it as a way to reduce its reliance on the outside market.
The deal would start to put NorthWestern back in control of the electricity its customers use. The former Montana Power Co. used the infamous 1990s-era deregulation laws to split off its power generating assets — a move customers and politicians then criticized for years.
The sale is expected to close in the second half of 2014 and requires regulatory approval from the Public Service Commission. In the late 1990s, the commission approved the sale of the dams to PPL after the Legislature put deregulation into place.
Commissioner Travis Kavulla said the deal will have to be good for customers, whose rates could be affected by the purchase.
"That is a responsibility that I take extremely seriously," Kavulla said. "It will mean asking NorthWestern and PPL hundreds of questions, reading tens of thousands of pages, and thinking long and hard not just about whether this investment is right for customers in the here and now, but whether it's the right decision for Montanans 10 or 20 years down the road."
The agreement does not include PPL Montana's interest in the Colstrip power plant or its J.E. Corette coal-fired facility near Billings, which generate about 600 megawatts of power. And it does not include PPL EnergyPlus, a power marketing and trading operation based in Butte.
In a related transaction, PPL Montana will pay $271 million to terminate a sale-leaseback arrangement for its interest in the Colstrip power plant by the end of the year, meaning PPL expects to net $623 million on the deal.