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Southern Montana Electric Generation and Transmission Cooperative will continue receiving power to supply its members under agreements presented Tuesday in bankruptcy court.

Appearing before U.S. Bankruptcy Judge Ralph Kirscher in Billings, John Parks, an attorney for Southern’s trustee, said the wholesale co-op had reached pacts with PPL, the Western Area Power Administration and NorthWestern Energy to continue receiving power until at least Jan. 25.

The judge was expected to issue orders on the agreements.

This is the second round of interim agreements reached between Southern, a Billings-based wholesale co-op, and its power suppliers.

Southern also reached a second interim pact with its note holders, including Prudential Insurance, to keep using cash collateral to pay its bills and continue operations. Prudential is Southern’s biggest secured creditor, having loaned the co-op $85 million to build the first phase of the Highwood Generating Station, a 40-megawatt gas-fired power plant near Great Falls.

The judge will consider final orders on the agreements at a hearing Jan. 24.

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Under the agreement with PPL, which is Southern’s main power supplier and its biggest unsecured creditor, the co-op will buy the power it needs rather than the amount it had contracted to receive.

The agreement will help Southern save money by not having to buy more electricity than it can use, said Lee Freeman, Southern’s trustee.

Southern filed for bankruptcy Oct. 21. The co-op supplies power to its five member rural co-ops and to the city of Great Falls.

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Contact Clair Johnson at cjohnson@billingsgazette.com or 657-1282.

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