NorthWestern will delay property tax payments to save money

HELENA - NorthWestern Energy says it will delay paying two-thirds of its remaining 2002 Montana property taxes in a cost-cutting move to help it get through the traditionally lean summer.

The announcement Wednesday came a week after NorthWestern, citing growing energy costs, said it would seek a 45 percent increase in natural gas rates for customers.

The second half of NorthWestern's $48 million property tax bill was due to local governments at the end of May, but the company only paid $8.1 million on time.

It has agreed to spread out the remaining $16 million in payments over the next five months.

Spokeswoman Claudia Rapkoch said NorthWestern expects to make the remaining payments as scheduled along with interest and a 2 percent late-payment penalty.

NorthWestern owes Hill County $443,505, County Treasurer Carrie Dickson said today. In a letter Dickson received this morning, NorthWestern said it plans to make payment in July, she said. The payment will include the 2 percent penalty and a small amount of interest, she said.

Rapkoch said it was the first time in recent memory the company had resorted to such a move to cushion its cash reserves.

She said several factors, including severe weather and rising energy costs, led to the decision.

''There's a growing lag time between the money that we're spending and our ability to recover it, and that's eating away at our cash reserves as well,'' Rapkoch said.

Rapkoch said NorthWestern Corporation, the utility's parent company, has been looking for many different ways to cut spending.

''Additionally, we have spent $21 million more in energy purchases this year than what we have recovered in rates so far. We are taking this step to conserve cash and ensure we are in a position to deal with unforeseen circumstances,'' NorthWestern Corporation Chief Executive Officer Gary Drook said in a statement Wednesday.

''Cash management has been a very significant goal for us this year. We have taken a number of steps ... to keep a real close eye on cash,'' Rapkoch said.

NorthWestern Energy consulted with local government and school groups before announcing the decision, officials said.

Gordon Morris, Montana Association of Counties executive director, applauded NorthWestern's decision.

Morris said the move was a responsible way for the cash-conscious utility to make sure it met obligations to local schools and governments that depend on the property tax payments.

''They're making every effort to make those tax payments, as opposed to just going delinquent,'' Morris said.

Morris said the situation was unusual, but his organization was pleased that NorthWestern approached local groups to discuss options for paying its tax bill.

Havre Daily News reporter Patrick Winderl contributed to this story.