July 2, 2008

Montana Public Service Commission Approves Stipulated Agreement Between NorthWestern Energy and the Montana Consumer Counsel

SIOUX FALLS, S.D., July 2 /PRNewswire-FirstCall/ -- NorthWestern Energy today announced that the Montana Public Service Commission (MPSC) has formally approved a stipulated agreement with the Montana Consumer Counsel (MCC) to settle its pending electricity and natural gas rate cases. The agreement resulted in a rate increase of about 2 percent, which has been in effect on an interim basis since January 1, 2008.

Last December, NorthWestern announced the proposed settlement with the MCC that included a $10 million annual increase in electric delivery rates, and an increase in natural gas delivery rates of $5 million annually. As part of the agreement, NorthWestern will provide 21 megawatts of unit contingent power from Colstrip Unit 4 at $19/MWh below the Mid-C index price for a period of 78 months. NorthWestern will also make capital investments in 2008 and 2009 to improve and upgrade the existing electric transmission and distribution system. The Company will recover this investment in rates overtime but will not earn a rate of return on $38.8 million of the total investment. Under the terms of the agreement, NorthWestern will file another rate case in 2009.

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/.

NorthWestern Energy

CONTACT: Claudia Rapkoch, 1-866-622-8081,[email protected], or Investor Relations, Dan Rausch,+1-605-978-2902, [email protected], both of NorthWestern Energy

Web site: http://www.northwesternenergy.com/