PSC Approves Sale of PPL Merchant Plants to Utility

The Montana PSC has voted to prepare an order approving NorthWestern Energy's request to purchase the Montana hydroelectric facilities of PPL Montana.

The agreement includes PPL Montana's 11 hydroelectric power plants, which have a combined generating capacity of more than 630 megawatts, as well as the company's Hebgen Lake reservoir.

The PSC is expected to issue the final order later this month.

NorthWestern said that with its ownership of the plants, the hydroelectric facilities would be dedicated to serve its Montana customers, with power priced at the cost of production, under the supervision of the Montana Public Service Commission, not priced based on what happens in the western power market.

The purchase price for the hydroelectric generating facilities is $900 million in cash, subject to certain adjustments. PPL Corporation estimates its total net cash proceeds of the sale will be approximately $880 million.

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; Mystic Lake Dam on West Rosebud Creek; and Hauser, Holter, Black Eagle, Rainbow, Cochrane, Ryan and Morony dams along the Missouri River.

The sale does not include PPL Montana's interest in the Colstrip facility or its J.E. Corette coal-fired facility located near Billings. PPL Montana has announced that it intends to mothball the 153-megawatt Corette plant in April 2015. It also does not include the Butte-based marketing and trading operations of PPL Montana's affiliate, PPL EnergyPlus, LLC.