NorthWestern Energy To Acquire PPL Montana Hydroelectric Facilities For 900 Mln

(RTTNews) - NorthWestern Energy (NWE) Thursday announced agreement with PPL Montana, a wholly-owned subsidiary of PPL Corp. (PPL) to acquire 11 hydroelectric facilities representing 633 MWs of generation, one storage reservoir, and related assets, for a $900 million.

Situated in two separate river basins, covering both sides of the Continental Divide, the assets benefit from low variable operating costs and favorable environmental qualities. The facilities were originally built as part of the integrated system that complements the company's existing set of supply resources.

PPL Montana's hydroelectric facilities include its Thompson Falls Dam on the Clark Fork River; Kerr Dam on the Flathead River; Madison Dam on the Madison River; Hauser, Holter, Black Eagle, Rainbow, Cochrane, Ryan and Morony dams along the Missouri River; and Mystic Lake Dam on West Rosebud Creek.

"The addition of Montana-regulated, clean, sustainable and reliable hydro power will provide supply diversity to our portfolio and will reduce risks associated with variable fuel prices, " said Bob Rowe, NorthWestern's president and CEO.

This transaction is expected to allow NorthWestern to reduce its reliance on third party power purchase agreements and spot market purchases, more closely matching NorthWestern's electric generation resources with forecasted customer demand.

Upon completion, about half of NorthWestern's total energy needs in Montana would be met with hydro and wind generation.

"In joining our portfolio of wind, natural gas and coal assets, these hydroelectric facilities will increase our energy capacity and provide NorthWestern with greater certainty about our energy supply, " added Rowe.

PPL Montana will pay $271 million to terminate a sale-leaseback arrangement for its interest in the Colstrip coal-fired facility. Termination of the lease is expected to be completed by the end of 2013 and is subject to approval of the Federal Energy Regulatory Commission.

Upon completion of the transaction, NorthWestern will be able to provide nearly all of Montana's required power supply during light load periods, while using market purchases or other resources to meet demand during heavier load periods.