Whose bright idea was this, anyway? Montana cities have created a private, nonprofit corporation to buy and run NorthWestern Energy

SUMMARY: Far from a grass-roots effort, cities’ pitch to launch new utility was borne in distant boardrooms.

Missoula and four other Montana cities have created a private, nonprofit corporation to buy and run NorthWestern Energy, the South Dakota-based utility serving more than 300,000 electricity customers and some 160,000 natural gas customers throughout Montana. The $2 billion leveraged buyout is potentially the largest business deal in the state’s history and could profoundly affect utility rates and service far into the future.

What’s the genesis of this bold plan?
It didn’t originate with the citizens of Montana. It wasn’t something their elected officials dreamed up, either. Nor did it spring from Montana businesses, academia or one of the state’s interest groups or think-tanks. Certainly no editorial writer suggested it.

Actually, this particular plan to buy the utility didn’t originate in Montana. It started in Seattle, in the branch offices of the national management and engineering consulting firm called R.W. Beck. Client Services Director Ronald J. Moe picked up the telephone going on two years ago and called the director of the Montana League of Cities, who sent him to Mayor Mike Kadas. Moe suggested to him that NorthWestern was vulnerable to takeover as it emerged from bankruptcy in late 2004. Kadas was receptive, and from that conversation grew Montana Public Power Inc., the private company created by but, alas, not exactly controlled by Missoula, Helena, Great Falls, Butte and Bozeman. Folks in Montana had in the past fantasized about creating a public utility, but not like this. The idea behind MPPI is to move quickly, tempting a handful of major institutional investors left holding NorthWestern stock as it emerges from bankruptcy, offering to pay a high price for that stock using all borrowed money.

Full Opinion: http://www.missoulian.com/articles/2005/09/30/opinion/opinion6.txt

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Further Stories: Montana cities asked to pony up $25K more apiece for public power bid http://www.matr.net/article-16034.html