Yesterday, Montana’s Public Service Commission approved a request from NorthWestern Energy (NYSE:NWE), the largest electricity distribution company in the state, to purchase an existing coal-fired power plant in exchange for an agreement to operate under a regulated-rate plan that the PSC has promised will lower rates in the long run. Earlier this year, NorthWestern won approval (with the blessing of environmentalists!) for a new gas-fired power plant that it would also operate under state regulation.
Back in the mid-1990s, the state of Montana deregulated its electricpower industry and forced the former Montana Power Company to sell itsgenerating plants. Competition was supposed to lower electricity pricesfor customers. It didn’t quite work out that way, mostly because nopower company was interested in delivering electricity to state withnearly 150,000 square miles of area and fewer than one million people.
NorthWestern shares moved up nearly 8% yesterday, most of the uptickfollowing release of the state’s approval of the power plant buyout.
November 14, 2008