A settlement was reached with the South Dakota Public Utilities Commission earlier this month, removing a potential roadblock to FERC approval of the proposed merger of NorthWestern Corp. and Australian-based Babcock & Brown Infrastructure Ltd (BBI). Under the deal, the PUC won’t oppose the Sioux Falls, SD-based utility holding company from being purchased by BBI.

Last month, the South Dakota regulatory panel filed a protest of the proposed merger at the Federal Energy Regulatory Commission (FERC) and at the end of the month withdrew it (see Power Market Today, Sept. 25). FERC is expected to make its decision by the end of this year, NorthWestern said.

NorthWestern CEO Mike Hanson said the PUC settlement agreement provides state regulators with “assurance that we will continue to provide South Dakota customers with the same level of service that they have come to expect from us. This agreement also underscores our expectation, through this transaction, to provide further stability for our employees, customers and communities in South Dakota.”

Noting the deal should further NorthWestern’s continuing good relations with regulators in its headquarters state, BBI CEO Steve Boulton said the agreement “provides NorthWestern’s customers with the necessary assurances that we intend to be a long-term, stable investor.”

The South Dakota PUC formally approved the deal on Monday. Nebraska’s Public Service Commission held an uncontested hearing on the proposed merger Sept. 27 and is expected to issue a final order at the end of this month, NorthWestern said. The Montana Public Service Commission, which has had public spats with NorthWestern in recent years, will not hold a hearing on the proposed merger until March next year, NorthWestern said.

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