U.S. Bankruptcy Judge Ralph Kirscher approved an interim plan Tuesday to allow Southern Montana Electric Generation and Transmission Cooperative to keep using cash collateral to pay its bills and continue operations.

The plan is the fifth interim agreement between Southern and its secured noteholders since the Billings-based wholesale power supplier filed in October to reorganize its finances amid a cash shortfall of about $21.4 million.

A hearing to approve a final plan is scheduled for April 17, which is Southern’s next regular bankruptcy hearing.

The interim agreement had been “thoroughly vetted” by the parties, said John Parks, a Denver attorney for Southern’s trustee, during a 10-minute hearing.

Southern has an “immediate and critical need” to use the cash collateral for its operations, the agreement said. Without it, Southern wouldn’t have enough liquidity to operate, and the co-op and its creditors would “suffer immediate and irreparable harm,” the agreement said. The agreement includes a budget.

The interim agreement is between Southern and Prudential Insurance Co. of America and other noteholders, which loaned Southern $85 million to build the first phase of the Highwood Generating Station.

Highwood is a 40-megawatt natural gas plant near Great Falls.

The plant, which is restricted to running only at times of peak demand, was completed shortly before the bankruptcy and has not run commercially.

Southern supplies power mostly to its members, which include five rural co-ops in central and southeastern Montana and to the city of Great Falls.

Southern also reached an agreement this week with NorthWestern Energy, an unsecured creditor, to increase a deposit from $750,000 to $1.25 million and to continue to paying invoices as they come due.

The deposit is to provide NorthWestern with assurance that Southern will pay its bills for electricity and gas transmission services.

Meanwhile, Lee Freeman, Southern’s court-appointed trustee, has said Southern is saving money by buying electricity for its members on the open market at about half the price it had been paying under a contract with PPL Energy Plus, its largest unsecured creditor.