HomeMy WebLinkAboutLeague - NW Energy Settlement P.O. Box 1704 -Helena, Mt 59624 .
406 442~8768 (Phone)
406442-9231(Fax) dlJL 21 2003
Memorandum CITY OF LAUREL
To: Cities and Towns in Energy Supply Program
From: Alee Hansen
Subject: NorthWestern Settlement Offer
Date: July 18, 2003
As the attached letter indicates, NorthWestern Energy will submit an offer to the League
of Cities and Towns and the School Boards Association next week to compensate
members for the additional costs resulting fi.om the ufility's decision to renege on the
remaining four years of an electrical supply contract that was signed in June of 2002.
We have retained attorneys specializing in both utility and bankruptcy law to analyze this
offer and present a recommendation to cities and towns that were under the supply
contract.
We will circulate the NorthWestern offer and the recommendation of our attorneys
sometime the week of July 28th' The intent is to give participants in the program an
oppommity to comment on the terms and conditions of the settlement offer before it is
accepted, rejected or modified.
I have attached the NorthWestern letter and a spreadsheet that estimates the yearly
increase in energy costs resulting form the breach of the contract.
JUL-tO-2003 NED 05:00 PH ~IORTHNESTERN CORP PR× NO. 6059782840 P, 02
- ~-..~.!-. ~..',?i' ['~WJ ....... ' '~' ;3 t:.~., Sj.~i''~'':5~, "i~l(l~ ~_ ~ S'? ~',i 't~I~ Tcq Sicux Fac.:mlle:~Pl')one:~'all$'60 SD 605-97~-290597~-2Q1057104 (i,101
VIA I,'A('31M I I A,'~
July 16,2003
John Alkc., Esq.
l luL. qicS, K¢lluor. Sallivan & Alke ....
40 W. l.a,,vre~ce, Suit,' A
llclcua. MT 59624
Re: I.eague or'Cities anti Montana School ~o:~r~la Association Power Supply Contracts
I )oar John:
As we digcussed this aflcrnoo% I am the NorfltWestem Co~poraiion ¢~o~hWestCrn")
attorney asgigncd to Imnd[e matters on bchatfoFNorthWestem's subsidies,
NorthWcslem Power Markcl[ng, LLC ("NEM'). NorthWestern t'e~cts the
misundecslaading that occurred hctwct a your clients, lhe Moutala League of Cities and
'l'owt~, [,lc. and thc Montana School Poartls Association, It~c., and NEM m'~ing from
Scott Ma~,ie's June 17, 2003 letters to Alee H:lnsun and Lance Melto~l. As 9ou cm~
imagine, we arc sl[[{ trina to streamline tho linc!: of~mmmxieadon between llclena,
Iluitc and Sioux falls, particularly wht.n NoahWc~tem operates with a ~enrralized legM
depadmcnt. UnM~unalely, your clieut5 t~peficnecd a great deal of distress dt~e to out'
inlernal ct~mmulficalion misttlMerstand[ng. We apologize for the problems lhis I~
causal ymtr clicnls.
As I m~ati0ncd in Our call No~hWestCm pla~s to convey m you, For consideration by
youc elicnls, a comprehensive proposal to ¢,FC~ct a~y increases H~at may r~ult from a
dh'cot billiu~ utxdcr thc default supplyvalc~ compared to the contr~t price, Iu light of
Nod hWe~tcm's cum'cut financiM condition, ~¢ helieve d~e proposal will place you~
ciicnls in ;m improved reliabii{ty situation and mu{ntah~ the financial benefit of the
conlraCL~ v.,hH~ NorthWestern continu,:s to implement iis r~st~<c~urjl~g and ~rn~ouud
plan. My E. oal iu to have tl{is proposal to you oa or before July35, 2003. You indicated
that yo, did not {?w ;: problem wiGx this ],reposed time schedule.
JUL-16-2003 NED 05:00 PI1 NORTH~4ESTEPJt CORP FCt× t,lO. 6059782840 P. 03
you :L,,jain for your coopcration and i)aticnce. I look ro]~vard to an amicablc
Sincerely,
Senior Corporate Counsel
Cc: Michael I. l-[;m,qon, l~Esq.
Made Thompson (via facsimile)
Dcnui,'; [.opach, Esq. (via f~simile)
Projected Increase in Rates
Default Rate with
Current Default Requested Increase
City / Town Rate 0.03770 0.04143
Billings 46,160 97,388
Bozeman 21,420 45,192
Butte 57,524 ~ 20,404
Great Falls 44,073 92,985
Havre 15,006 31,659
Helena 23,620 49,575
Missoula 23,093 48,_72_1
Glasgow 5,673 11,968
Deer Lodge 5,151 10,771
--Belgrade 6,315 13,323
Cascade 529 1,115
Conrad 1,450 3,059
Darby 942 1,987
Haleru 1,377 2,905
Malta 2,809 5,926
Manhattan 694 1,463
Plains 954 2,012
Sheridan 1,793 3,782
Superior 1,022 2,156
Three Forks 1,058 2,232
Laurel 11,808 24,912
Livingston 8,415 17,754
Bddger 1,493 3,149
Chinook 2,870 6,O55
East Helena 2,074 4,375
Hardin 2,270 4,789
Harlowton 752. 1,586
Red Lodge 948 2,000
Roundup 2,325 4,905
Total 293,618 618,150