A federal bankruptcy judge gave tentative approval on Friday to the reorganization plan of Southern Montana Electric Generation and Transmission Cooperative, a wholesale power provider, to its rural co-op members.
U.S. Bankruptcy Judge Ralph Kirscher told parties in the long and complex case that he would confirm Southern’s reorganization plan pending receipt of a proposed order and other supplemental plan documents and agreements, court records said.
Gary Ryder, a Hysham attorney who represents the Mid-Yellowstone Electric Co-op, which is a member of Southern, said there were no substantive objections and no one testified during Friday’s hearing.
Recent settlement talks had resolved objections of most of the parties, he said.
“It was nice to get it over,” Ryder said of case.
Southern’s bankruptcy attorney, Malcolm Goodrich of Billings, could not be reached for comment on Friday.
A confirmation hearing initially set for June 2 was continued to give settlement negotiations a chance.
Southern reached a settlement in March with the noteholders who funded the construction of its gas power plant, the Highwood Generating Station, near Great Falls. The agreement calls for Southern’s four member co-ops to stay together, with customer power rates held at current levels, and for it to repay the noteholders $22 million of the $85 million it borrowed for the seldom-used gas plant.
Billings-based Southern serves more than 13,000 customers in central and Eastern Montana. The wholesaler filed for bankruptcy in October 2011 after it contracted for more power than it could use at increasing rates. Southern ended up having to sell excess power at a loss into a depressed market.
In addition to Mid-Yellowstone, Southern’s other members are the Beartooth, Tongue River and Fergus co-ops.