Montana’s Public Service Commission last Tuesday unanimously agreed to establish criteria it would use to judge future offers to buy Chapter 11-mired NorthWestern Energy, the holding company for the major electric/natural gas utilities in the state. By a 5-0 vote, the commission directed its staff to develop potential criteria for sales offers that may come after NorthWestern emerges from bankruptcy later this year.

However, the utilities and other industry observers question whether the state regulators have the power to make the final determination on any proposed future sales. They contend the state legislature, which so far has refused to take up the issue, or the Montana Supreme Court ultimately will have to make that determination.

According to news media reports in Montana, the PSC staff is looking at potential criteria that would address concerns about NorthWestern, which is based in South Dakota, being an out-of-state owner of the Montana utilities. One PSC staffer told news media that possible criteria would require that the buyer have a “Montana focus,” utility-only focus, investment-grade credit rating, and the financial capability of buying adequate natural gas and electricity supplies.

During NorthWestern’s ongoing bankruptcy proceedings, one of the proposed buyers came from a group of the state’s largest cities that formed an alliance, along with offers from private- and public-sector utilities.

The PSC commissioners reiterated that they want criteria that can be applied to any future proposed sales, acquisitions or mergers of NorthWestern. At this point the Montana regulators have asserted their authority to have the final say over such transactions.

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