News

NorthWestern buffs tarnished image

When NorthWestern Energy emerges from Chapter 11 bankruptcy — that could be anywhere from nine months to two years from now — it will be a "solid, investment-grade utility."

By Leslie McCartney of The Montana Standard

That was the message delivered by NorthWestern’s Chief Operations Officer Mike Hanson as company leaders fan the state to assure ratepayers, employees, retirees and communities of NorthWestern’s commitment to Montana.

In a wide-ranging discussion, Hanson told members of The Montana Standard editorial board Thursday that NorthWestern intends to pay its taxes on time, provide uninterrupted gas and

electrical services to customers and work to rebuild an image shaken by financial difficulties and bankruptcy.

NorthWestern’s bankruptcy is unlike Touch America’s bankruptcy in which Touch America is being sold and shut down.

"We have no interest in selling the utility or any part of it," Hanson said.

He added that unfortunately the media have drawn parallels between NorthWestern and Touch America, which Hanson insists are very different. NorthWestern will remain because it provides an essential service, not one that can just evaporate like Touch America.

The bankruptcy filed by NorthWestern actually has helped improve the company’s finances as

credit restrictions are easing and the company is able to sell subsidiaries that sank the parent company deep into debt.

"We are now able to do in court what we couldn’t do out of court," Hanson said of debt and financial restructuring.

Hanson recounted how the South Dakota-based utility felt "tremendous pressure" to yield significant rewards for its investors. To do that, the company diversified into heating, propane and telecommunications businesses. Those subsidiaries failed to reap profits — and eventually helped sink NorthWestern $2.2 billion in debt. That became a problem after NorthWestern bought the old Montana Power Co.’s distribution and transmission business.

Now the company is starting to dislodge itself from the mess it created.

"Credit terms are starting to return to normal," Hanson said. "And we are actually building cash."

NorthWestern is a "debtor-in-possession." That means that it remains in business but oversight for the company is controlled by a Delaware bankruptcy court. It will submit a financial plan to the court and must ask court permission to conduct business until it emerges from bankruptcy.

Those provisions are one reason why NorthWestern cannot contribute to community causes as it has done historically. Hanson said the company hopes to resume those contributions when it gets approval to do so.

Also, Hanson said that employees’ pay and benefit packages, as well as pensioners’ benefits, remain intact and normal. The one exception is about two dozen pensioners — typically high wage-earners — who were entitled to the benefit restoration plan. That plan is designed to keep their pensions agreeing with the high levels of pay they earned.

No plans for layoffs or reductions in the work force are planned, either, Hanson said.

Hanson acknowledged that the past two years have been unpleasant for NorthWestern.

"This company has learned a very painful lesson," Hanson said. "And a series of events has severely damaged our public image."

He said NorthWestern’s woes have had a tendency to take attention away from the problem of how to encourage long-term stable supply of energy at affordable prices. That is directly linked to the call of deregulation being heeded before the market forces needed to prop up such a system were in place in Montana, he said.

Hanson also reassured the state that NorthWestern has an adequate gas supply and contracts for the winter.

"We have more in storage this year than last year," Hanson said.

Reporter Leslie McCartney may be reached via email at [email protected].

http://www.mtstandard.com/articles/2003/10/24/newsbutte_top/hjjgijhfjbefhj.txt

Posted in:

Sorry, we couldn't find any posts. Please try a different search.

Leave a Comment

You must be logged in to post a comment.