PSC wrestles better deal out of BBI

The Public Service Commission deserves a pat on the back for looking out for Montanans.

Last month, the state agency had rejected the offer of Babcock & Brown Infrastructure, an Australia-based multinational corporation, to acquire NorthWestern Energy.

BBI certainly looks like a solid player in the energy business, so there was room to question whether or not the PSC had gone too far in rejecting a serious offer for what has been a utility with a somewhat troubled history.

But any questions were answered this week when BBI came back with a second offer that responded to the criticisms of the PSC members. It looks like this new proposal will be substantially better for ratepayers.

Mike Garland, the head of BBI's North American division, was blunt about why the company was coming back with a revised proposal: "The simple answer," he said, "is we blew it."

That is refreshing talk, and the kind of talk that Montanans appreciate.

As NorthWestern's president, Mike Hanson, said: "You have to earn the right to be here (in Montana), and to BBI's credit, they are stepping up to be here."

Details of the proposal are sketchy at this point, but it appears that the revision would create a Montana-based and Montana-run utility. BBI would invest at least $380 million in the utility, spend up to $200 million on making new electricity at regulated rates, and give ratepayers a one-time credit of $20 million.

In addition, BBI promises to own the company for at least 10 years, giving Montanans hope of stability for at least the short-term.

A University of Montana economist has cautioned that this deal could be the best hope for Montana ratepayers. "Other take-over proposals are almost certain" if this one is rejected, said Tom Power. He warned that most other proposals would likely "submerge the Montana NorthWestern operations in a multi-state utility" that would be more difficult to regulate.

We aren't experts on the energy business, but the staff and commissioners of the Public Service Commission are. It looks like we can trust them to analyze this new proposal with the same thoroughness as the last one, in order to protect the interests of all Montanans.