PPL Montana said Wednesday (7/5) that it has signed a seven-year agreement to supply wholesale electricity to NorthWestern Corporation.
Under the terms of the agreement, PPL Montana would provide 325 megawatts of on-peak supply and 175 megawatts of off-peak supply to NorthWestern beginning July 1, 2007, and continuing through June 30, 2010. On-peak supply is Monday through Saturday, 6 a.m. to 10 p.m.
From July 1, 2010, through June 30, 2012, PPL Montana will supply 275 megawatts of on-peak and 150 of off-peak supply. And, from July 1, 2012, through June 30, 2014, PPL Montana will supply 200 megawatts of on-peak and 125 megawatts of off-peak supply.
"We are very pleased that we have been able to reach agreement on this long-term contract, which ensures that a significant portion of the electricity we generate in Montana stays in Montana,” said David Hoffman, PPL Montana’s manager of External Affairs.
No regulatory approvals are necessary for the agreement.
PPL Montana currently has contracts to sell 450 megawatts to NorthWestern. Those contracts expire June 30, 2007.
Hoffman said the price for the supply starts at $44.95 per megawatt-hour in July 2007 and increases to $52.95 per megawatt-hour by the end of the seven-year agreement.
PPL said the terms of the agreement are in line with the assumptions in its long-term earnings forecast of $3.50 per share in 2010.
PPL has 500 employees in Montana who generate and sell electricity. PPL Montana operates coal-fired power plants at Colstrip and Billings, as well as 11 hydroelectric power plants along Rosebud Creek and the Missouri, Madison, Clark Fork and Flathead rivers. It has a combined generating capacity of about 1,200 megawatts and has offices in Billings, Butte and Helena. PPL EnergyPlus operates a trading floor in Butte that markets and sells power in the wholesale and retail energy market. PPL Montana and PPL EnergyPlus are subsidiaries of PPL Corporation (NYSE: PPL).
Statements made in this press release, including statements with respect to future earnings and energy supply, are "forward-looking statements" within the meaning of the federal securities laws. Although PPL Corporation believes that the expectations and assumptions reflected in these forward-looking statements are reasonable, these statements involve a number of risks and uncertainties, and actual results may differ materially from the results discussed in the statements. The following are among the important factors that could cause actual results to differ materially from the forward-looking statements: market demand and prices for energy, capacity and fuel; market prices for crude oil and the potential impact on synthetic fuel operations, synthetic fuel purchases from third parties and the phase-out of synthetic fuel tax credits; weather conditions affecting generation production, customer energy usage and operating costs; competition in retail and wholesale power markets; liquidity of wholesale power markets; the effect of any business or industry restructuring; the profitability and liquidity of PPL Corporation and its subsidiaries, including access to capital markets and credit facilities; new accounting requirements or new interpretations or applications of existing requirements; operation and availability of generation facilities and operating costs; transmission and distribution system conditions and operating costs; current and future environmental conditions and requirements and the related costs of compliance, including environmental capital expenditures and emission allowance and other expenses; significant delays in the planned installation of pollution control equipment at PPL Corporation’s coal-fired generating units in Pennsylvania due to weather conditions, contractor performance or other reasons; development of new projects, markets and technologies; performance of new ventures; asset acquisitions and dispositions; political, regulatory or economic conditions in states, regions or countries where PPL Corporation or its subsidiaries conduct business; any impact of hurricanes or other severe weather on PPL Corporation’s business, including any impact on fuel prices; receipt of necessary governmental permits, approvals and rate relief; new state, federal or foreign legislation, including new tax legislation; state, federal and foreign regulatory developments, including any adverse decisions regarding the market-based rate authority of PPL Montana, LLC or PPL Corporation’s other generation subsidiaries; any impact of state, federal or foreign investigations applicable to PPL Corporation and its subsidiaries and the energy industry; capital markets conditions, including changes in interest rates, and decisions regarding capital structure; stock price performance of PPL Corporation; the market prices of equity securities and the impact on pension costs and resultant cash funding requirements for defined benefit pension plans; securities and credit ratings; foreign currency exchange rates; the outcome of litigation against PPL Corporation and its subsidiaries; potential effects of threatened or actual terrorism or war or other hostilities; and commitments and liabilities of PPL Corporation and its subsidiaries. Any such forward-looking statements should be considered in light of such important factors and in conjunction with PPL Corporation's Form 10-K and other reports on file with the Securities and Exchange Commission.