By BOB ANEZ/Associated Press Writer
HELENA - The air conditioners will stay on and the furnaces will remain lit as NorthWestern Energy struggles to solve its financial problems, the utility's president assured Gov. Judy Martz on Thursday.
Mike Hanson said the company, which supplies electricity and natural gas to more than 300,000 Montana customers, is searching for help to shore up its slumping credit. While he insisted NorthWestern is not looking for a ''government bailout,'' he acknowledged the state could be a source of financial support.
Martz said Montana has no money available and state government ''shouldn't be in the utility business.''
But she said the meeting with Hanson reassured her that the company is doing what it can to improve its shaky finances, avoid bankruptcy and ensure continued service to Montanans.
''I feel way more optimistic,'' she said after the nearly 90-minute meeting at the Capitol.
Martz said she was particularly pleased to hear NorthWestern is already stockpiling gas for the winter and does not consider selling its utility operations as an option for dealing with its financial troubles.
Martz asked for the unusual meeting amid growing concerns about the solvency of the utility's parent company, NorthWestern Corp.
House Appropriations Chairman Dave Lewis, a Helena Republican and former executive director for the state Board of Investments, has suggested the state could help out by guaranteeing electric and gas wholesalers that NorthWestern will be able to pay its bills.
Hanson said the company needs to improve its cash flow and credit standing. The latter problem has made it difficult for NorthWestern to enter into long-term, lower-priced contracts for electricty and gas because sellers fear they won't get their money, he said.
Last year, the company had 54 days to pay for its gas purchases; today its poor credit requires prepayment and that has siphoned $50 million from the utility, Hanson said.
NorthWestern's financial problems have caused its stock price to plummet from $23 to $2 in the past 18 months, forced suspension of shareholder dividends and prompted an informal investigation by the Securities and Exchange Commission.
Hanson said the heart of the problem is too much debt - $2.2 billion, to be exact. To come up with money to reduce the debt, NorthWestern Corp. is trying to sell some related operations.
The list includes two troubled subsidiaries that provide heating, plumbing, air conditioning and communications services, and a proposed gas-fired power plant at Great Falls. The goal is to focus on utility operations, Hanson said.
He acknowledged bankruptcy would be a possibility in 2005 when much of its loans come due, unless the company can refinance the red ink by then.
Despite the financial troubles, NorthWestern continues to line up gas supplies for the winter demand and plans on spending $53 million on various construction projects in Montana this year, Hanson said.
''We're working hard to turn our company around,'' he told Martz.
He said the NorthWestern affiliate that recently breached its contract to supply Montana cities and schools with electricity at a discount rate plans to offer those customers a financial hand. The lost contract will force those customers to buy more expensive power.
Hanson said NorthWestern Energy Marketing has money to pay, for up to two years, the difference between the rate it charged the local governments and the new rates they will have to pay.
Martz said her administration, after reviewing the information Hanson provided, may announce next week a plan to help NorthWestern deal with its problems. She would not be more specific, saying the company may be doing all that can be done.
