Montana PSC Approves $15-billion NW Energy Merger

After a year of consideration, the Montana Public Service Commission is giving its blessing to the multi-billion-dollar merger between Northwestern Energy and Black Hills Corporation.

Approval came Tuesday afternoon following another lengthy commission meeting at the PSC offices in Helena, capping an extensive legal proceeding that saw debate and presentations focusing on the cost for ratepayers, access to future energy for Montana, and local control.

The growing concern over data center development also overshadowed the preceding over the past year, although members of the Commission noted today that individual siting of data centers is outside the jurisdiction of the panel.

RELATED: Data Centers Hot Topic for Merger

Commissioners see potential, but also rate concerns

In moving to approve the merger, Commission Vice-Chair Jennifer Fielder argued that Northwestern "will still be a Montana company" under the merger, which she says will be strengthened by conditions in the deal, the measures known as "ring fencing", which are designed to protect priority for local power.

Fielder admitted she was against the merger at first, but said the analysis during the proceedings showed there will be better service "at a least cost" and proved that this will be a "good deal for the people of Montana."

Concern over rate impacts remains

But Commissioner Randy Pinocci remained critical of the deal, noting that Northwestern had already increased capacity to address earlier problems, including a deal that added potential by acquiring Puget Sound Energy's 370-megawatt share of Colstrip in 2024.

Pinocci argued that it should make it possible for Northwestern to lower customers' power rates now, but said that doesn't seem to be happening. He felt there should have been additional conditions that would have lowered rates and that would have "made the merger good."

How big is the merger

The proposed all-stock merger between NorthWestern Energy and Black Hills Corporation carries a total enterprise value of $15.4 billion. The deal values the combined utility’s equity at roughly $7.8 billion. Under the agreement, NorthWestern shareholders receive 0.98 Black Hills shares per share owned, representing an equity purchase consideration near $4 billion.

What happens now

Montana is the last state to approve the merger.

NorthWestern Energy and Black Hills Corporation will combine under the parent name Bright Horizon Energy Corporation, trading as "HZN." NorthWestern shares convert to Black Hills stock, with NorthWestern's Brian Bird leading the entity. Local utility subsidiaries, customer billing, and daily operations remain unchanged during initial integration.