The Montana Public Service Commission (PSC) could decide as early as July 10 whether it will consider a revised merger proposal from Australian investment firm Babcock & Brown Infrastructure and South Dakota-based gas and electric utility NorthWestern Energy. Earlier this week the would-be merger partners filed a revised proposal that has garnered at least lukewarm support from some intervenors in the case (see Daily GPI, June 26).

The PSC, which is the only regulatory body standing in the way of the merger’s completion, earlier rejected the $2.2 billion deal unanimously (see Daily GPI, May 24). A PSC staff attorney told NGI on Wednesday that the PSC, which meets weekly, would likely decide on the revised proposal by its meeting July 24, noting that some commissioners are expected to be absent from the July 17 meeting. Montana administrative procedure calls for a 10-day public comment period on a request for rehearing before the PSC acts on the request.

If the PSC rejects the revised proposal, it likely also will issue an order denying approval of the merger. Commissioners were expected to issue the denial order at this week’s meeting but were obligated to hold back to allow consideration of the revised proposal. If the revised proposal is set for hearing, the process could take months.

Several intervenor groups lent their comments to a press release circulated this week by the merger partners, indicating that the revised terms of the deal have their appeal.

“AARP Montana did not take a position on whether or not this merger should be approved by the commission,” said Montana AARP Director Bob Bartholomew. “However, we did propose conditions to protect the consumer’s interest should the merger be approved. The proposals made by BBI in their request to reopen the record represent a good faith effort to respond to the conditions AARP Montana has raised in this docket, and represent a starting point for further discussion among the parties and consideration by the commission.”

Chuck Magraw, an attorney who represented four public interest intervenors, said the new commitments made by BBI and NorthWestern would “produce real benefits to Montanans and serve as an example of responsible energy policy for other Montana electric and gas utilities to follow.”

In April 2006, NorthWestern and BBI announced a definitive agreement under which BBI would acquire NorthWestern in an all-cash transaction at $37/share (see Daily GPI, April 26, 2006). The transaction followed NorthWestern’s emergence from bankruptcy and a decision in November 2005 to seek strategic alternatives for the company.

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