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FOR IMMEDIATE RELEASE: Tuesday, Oct. 10, 2006
CONTACT: Leah Mohr, South Dakota Public Utilities Commission, (605) 773-3201
Public Utilities Commission reaches settlement in federal approval proceeding with NorthWestern Energy and Babcock & Brown Infrastructure
PIERRE, S.D. – The South Dakota Public Utilities Commission reached an agreement today with NorthWestern Energy and Babcock & Brown Infrastructure regarding the approval proceeding before the Federal Energy Regulatory Commission. As part of the agreement, the PUC will not file any further objections to the pending FERC ruling on the merger of the two companies.
In June, Northwestern and BBI filed an application with FERC seeking approval of their intended merger. The PUC filed an intervention with FERC about the matter the same month.
"The PUC became a party in this federal docket to ensure our state's citizens – whether they be ratepayers, investors or employees – are given appropriate protections as FERC considers the merger between NorthWestern and BBI," said PUC Vice Chairman Dusty Johnson. "Since the intervention filing, we have spent a great deal of time negotiating with officials of both companies and have reached an agreement I am confident addresses the needs of South Dakotans. Therefore, the PUC has taken this action to not object if FERC approves the merger," Johnson said.
"One of our top priorities is to ensure NorthWestern's South Dakota customers receive reliable and affordable electricity if the merger takes place," said Commissioner Gary Hanson. "During our negotiations, we considered not only the future of the company, but also its history. The agreement we outlined contains specific commitments the company will make regarding financial safeguards for their customers and investors as well as requirements they must follow in terms of South Dakotans continuing to be part of the company's leadership and personnel," Hanson explained.
According to the commissioners, the agreement includes four key provisions:
- Financial Protections for Ratepayers and Investors: The agreement requires NorthWestern to have financial protections in place to keep utility assets from being used to finance non-utility assets or operations. In addition, NorthWestern will not be able to sell any generation assets without the approval of the PUC.
- Maintaining Reliability: NorthWestern will be required to invest resources to upgrade, replace and maintain its electric and natural gas systems. It will need to maintain reliability and customer service at levels it had prior to a merger taking place.
- South Dakota Leadership: The agreement requires NorthWestern maintain its corporate headquarters in South Dakota and that its board of directors contain at least one South Dakotan until at least 2010.
- South Dakota Staffing: NorthWestern will be required to maintain fully-staffed operational capability in South Dakota, including personnel necessary to provide planning, budgeting, management, operation and maintenance functions. This will ensure day-to-day operational decisions will be made by South Dakotans.
Today's action impacts only the PUC's filed intervention with FERC. It has no bearing on the Petition for Declaratory Ruling and Transaction Approval if Jurisdiction Found filed with the PUC by the companies in June of this year. For more information on that docket, go to www.puc.sd.gov and select "Commission Actions," then "Commission Dockets" and "2006 Gas & Electric Dockets."
MEDIA NOTE: An audio archive of this proceeding is available on the PUC Web site. To access it, go to www.puc.sd.gov, select "Commission Actions" then "2006 meeting archives."