Blog: NORTHWESTERN CORP : Entry into a Material Definitive Agreement, Regulation FD Disclosure, Other Events, Financial Statements and Exhibits (form 8-K) –

Item 1.01 Entry into a Material Definitive Agreement.

On January 16, 2023, NorthWestern Corporation d/b/a NorthWestern Energy
(Nasdaq: NWE) (the "Company") entered into a definitive agreement (the
"Agreement") with Avista Corporation ("Avista"), to acquire Avista's 15 percent
interest in each of Units 3 and 4 at the Colstrip Generating Station, a
coal-fired, base-load electric generation facility located in Colstrip, Montana.
Under the Agreement, the Company will acquire Avista's interests in Units 3 and
4, including all associated real property, equipment, common real property and
common equipment and facilities and all rights incidental thereto (collectively,
"Avista's Interest").

The proposed acquisition would increase the Company’s existing ownership
interest in Colstrip as follows:

                                          Current Colstrip Ownership
                                                  (Megawatts)                                                  Post-Closing Colstrip Ownership (Megawatts)
                                           Unit 3                          Unit 4                                    Unit 3                                    Unit 4
Avista                                  111 (15%)                       111 (15%)                                         0                                         0
NorthWestern                                    0                       222 (30%)                                 111 (15%)                                 333 (45%)
Other Owners                                  629                             407                                       629                                       407
COLSTRIP TOTAL                                740                             740                                       740                                       740

The Company does not operate Colstrip, and the Agreement does not affect
operational control of Colstrip.

The Agreement provides that the purchase price will be $0 and that the Company
will acquire Avista's Interest effective December 31, 2025, subject to
satisfaction of the closing conditions contained in the Agreement. Under the
terms of the Agreement, the Company will be responsible for operational costs
starting January 1, 2026; while Avista will retain responsibility for its
pre-closing share of environmental and pension liabilities attributed to events
or conditions existing prior to the closing of the transaction and for any
future decommissioning and demolition costs associated with the existing
facilities that comprise Avista's Interest.

The Agreement contains customary representations and warranties, covenants, and
indemnification obligations, and the Agreement is subject to customary
conditions and approvals, including approval from the Federal Energy Regulatory
Commission. If Avista seeks approval from the Idaho Public Utilities Commission
and/or the Washington Utilities and Transportation Commission and/or if
NorthWestern seeks approval from the Montana Public Service Commission, the
Agreement also would be subject to obtaining approval from such regulatory
authority which reasonably meets in all material respects the request of the
party who requested such approval. Closing also is conditioned on the Company's
ability to enter into a new coal supply agreement for Colstrip by December 31,
2024. Such coal supply agreement must provide a sufficient amount of coal to
Colstrip to permit the generation of electric power by the maximum permitted
capacity of the interest in Colstrip then held by the Company during the period
from January 1, 2026 through, December 31, 2030.

Either party may terminate the Agreement if any requested regulatory approval is
denied or if the closing has not occurred by December 31, 2025 or if any law or
order would delay or impair closing. Additionally, the Company may terminate the
Agreement if there is (a) a newly discovered, uncured material adverse effect,
(b) a change in law that would materially impair the ability of


Colstrip Units 3 and 4 to operate, or (c) damage to Units 3 and 4 that triggers
a vote to close the plant under the Colstrip ownership and operation agreement
(the "O&O Agreement"). The Agreement may be subject to the exercise by other
Colstrip owners of a right of first refusal set forth in the O&O Agreement.
Should any other owners exercise such rights, the Company intends to exercise
its right of first refusal under the O&O Agreement to the fullest extent
permitted, and Avista has agreed that it will not exercise its right of first

The foregoing description is not complete and is qualified by reference to the
full text of the Agreement, a copy of which is attached to this Current Report
on Form 8-K as Exhibit 2.1 and is incorporated by reference in this Item 1.01 as
though fully set forth herein.

The Agreement has been attached as an exhibit to this Current Report on Form 8-K
to provide investors and security holders with information regarding its terms.
The Agreement is not intended to provide any other factual information about
Colstrip or the Company. The representations, warranties, covenants and
agreements contained in the Agreement were made only for the purpose of the
Agreement and as of specified dates, were solely for the benefit of the parties
to the Agreement, and may be subject to limitations agreed upon by the parties.
The representations and warranties may have been made for the purposes of
allocating contractual risk between the parties instead of establishing these
matters as facts, and may be subject to standards of materiality applicable to
the parties that differ from those applicable to investors. Investors and
security holders are not third-party beneficiaries under the Agreement and
should not rely on the representations, warranties, covenants, and agreements or
any descriptions thereof as characterizations of the actual state of facts or
condition of Colstrip or the Company. Moreover, the assertions embodied in the
representations and warranties contained in the Agreement are qualified by
information in disclosure schedules that the parties have exchanged.
Accordingly, investors and security holders should not rely on the
representations and warranties as characterizations of the actual state of facts
of Colstrip or the Company or its businesses. Information concerning the subject
matter of the representations and warranties may change after the date of the
Agreement, which subsequent information may or may not be fully reflected in the
Company's public disclosures.

Item 7.01 Regulation FD Disclosure.

The Company has summarized certain aspects of its proposed acquisition of
Avista's Interest in a slide presentation, dated January 16, 2023. A copy of the
presentation is being furnished pursuant to Regulation FD as Exhibit 99.1 to
this Current Report on Form 8-K and is incorporated herein by reference. The
information in the presentation will not be deemed to be "filed" for the
purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or
otherwise subject to the liability of that section. Furthermore, the
presentation will not be deemed to be incorporated by reference into the
Company's filings under the Securities Act of 1933, as amended, or under the
Securities Exchange Act of 1934, as amended, except as set forth with respect
thereto in any such filing.

Item 8.01 Other Events.

On January 16, 2023, the Company issued a press release announcing its proposed
acquisition of Avista's Interest. The press release is furnished as Exhibit 99.2
hereto and is incorporated herein by reference.


Item 9.01 Financial Statements and Exhibits.

Exhibit No.                   Description of Document
  2.1*                        Colstrip Units 3&4 Interests Abandonment and Acquisition Agreement,
                              dated as of January 16, 2023
  99.1*                       Acquisition Slide Presentation, dated January 16, 2023
  99.2*                       Press Release, dated January 16, 2023

* filed herewith

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