NorthWestern Energy today announced that it and three other ownership partners in the Colstrip Transmission System (CTS) have agreed to proceed with a study of potential upgrades to the existing 500-kilovolt (kV) system in Montana. NorthWestern Energy, Puget Sound Energy , PacifiCorp, and Portland General Electric will work together to identify and evaluate one or more potential system upgrades that may accommodate the transmission of wind and other renewable generation.

The Colstrip Transmission System (CTS) consists primarily of twin 500-kV lines that carry electricity from the companies' jointly owned Colstrip power plants in eastern Montana to Townsend, Mont., where the CTS lines interconnect with the Bonneville Power Administration (BPA) transmission system. The CTS and BPA transmission lines ultimately deliver Colstrip power to the customers of Puget Sound Energy, PacifiCorp, Avista and Portland General Electric. As part of the study agreement, the companies will begin discussions with BPA about a corresponding upgrade of its Montana Intertie between Townsend and Garrison, Mont., and points west.

"The Colstrip Transmission System was originally built almost 30 years ago to carry power from the coal-fired Colstrip plants. But times have changed, and it's the growth and development of renewable energy that is the basis for the agreement," said David Gates, vice president, Wholesale Operations, NorthWestern Energy.

"This agreement is the logical next step in the development of this upgrade project," Gates said. "Montana's superior wind power potential combined with renewable portfolio standards in Washington and Oregon have spurred the renewed interest by the other owners to consider options for moving more of this new generation from Montana to the Northwest."

"Montana's great promise for wind power could significantly enhance the geographic diversity of wind resources in the Pacific Northwest, but only if we have the ability to move the power to where our customers live and work," said Sue McLain, senior vice president of Operations for Puget Sound Energy.

"Renewable energy resource areas can only reach their full potential when accessed by robust transmission capacity," said John Cupparo, PacifiCorp's vice president of transmission. "That's true for Montana and for other areas of the West where renewable resources are developing alongside traditional sources of power generation."

"Utilities in the Pacific Northwest are going to need more transmission capacity to handle growing loads and to integrate new renewables into the grid -- which will also be essential for us to make progress in reducing greenhouse gas emissions," said Joe McArthur, Portland General Electric's vice president for transmission and customer service. "This project is one of several major efforts region wide that show promise of helping us meet that need."

The four utilities have agreed to share the cost to conduct a thorough and independent review of the power-transmission alternatives and potential ownership structures. The ownership structure of any upgrade option will be determined once projects are identified and agreed to by participating utilities.

About NorthWestern Energy

NorthWestern Energy is one of the largest providers of electricity and natural gas in the Upper Midwest and Northwest, serving approximately 650,000 customers in Montana, South Dakota and Nebraska. For more information about NorthWestern Energy, visit our Web site at http://www.northwesternenergy.com/.

About Puget Sound Energy

Washington state's oldest and largest energy utility, with a 6,000-square-mile service territory stretching across 11 counties, Puget Sound Energy (PSE) serves more than 1 million electric customers and 737,000 natural gas customers. PSE meets the energy needs of its growing customer base through incremental, cost-effective energy conservation, low-cost procurement of sustainable energy resources, and far-sighted investment in the energy-delivery infrastructure. For more information, visit http://www.pse.com/.

About Portland General Electric Company

Portland General Electric, headquartered in Portland, Ore., is a vertically integrated electric utility that serves approximately 813,000 residential, commercial and industrial customers in Oregon. Visit our Web site at http://www.portlandgeneral.com/.

About PacifiCorp

About 1.7 million customers in six Western states look to PacifiCorp for safe, reliable electrical service. Operating as Pacific Power and Rocky Mountain Power, PacifiCorp is one of the lowest-cost electricity producers in the United States with a generation capacity of about 10,400 megawatts of electric energy. For more information, visit http://www.pacificorp.com/.

NorthWestern Corporation

CONTACT:
Media: Claudia Rapkoch, +1-866-622-8081, claudia.rapkoch@northwestern.com, or
Investors: Dan Rausch, +1-605-978-2902, daniel.rausch@northwestern.com, both of NorthWestern Energy

Web site: http://www.northwesternenergy.com/
http://www.pse.com/
http://www.portlandgeneral.com/
http://www.pacificorp.com/

---