NorthWestern Corporation Announces the Outcome of Elections Regarding Surplus Distribution from the Creditors' Reserve

SIOUX FALLS, S.D., Aug. 28 /PRNewswire-FirstCall/ -- NorthWestern Corporation d/b/a NorthWestern Energy (NYSE: NWE) ("NorthWestern") today announced the outcome of elections made by eligible holders of former unsecured notes and allowed unsecured claims (the "Participating Creditors") related to a surplus distribution from a reserve for disputed claims (the "Creditors' Reserve") established under the Company's 2004 Chapter 11 Plan of Reorganization. The Creditors' Reserve holds shares of NorthWestern's stock and the associated cash dividends and interest (together, the "Stock and Accruals"). By Order of the U.S. Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"), Participating Creditors were to receive their pro rata share of the surplus distribution from the Creditors' Reserve exclusively in cash unless they elected to receive their share of the surplus distribution in Stock and Accruals.

The election period to receive Stock and Accruals, rather than all cash, expired on August 22, 2008. Participating Creditors elected to receive a total of approximately 1.2 million shares of NorthWestern stock held in the Creditors' Reserve. Pursuant to the Bankruptcy Court's Order, entered July 29, 2008, the cash payment to Participating Creditors who did not make the election will be funded by NorthWestern's purchase of the approximately 1.1 million shares remaining in the Creditors' Reserve, which NorthWestern will purchase for the price of $24.32 per share (which equals the volume-weighted average of NorthWestern's closing stock price for the 20-day period ending on August 12, 2008).

NorthWestern contemplates that the surplus distribution will be completed in late August or September 2008. This distribution will fully distribute all shares and associated dividends and interest from the Creditors' Reserve.

In July 2008, NorthWestern purchased 782,059 shares which partially funded the previously announced settlement agreement by and among, inter alia, NorthWestern, Magten Asset Management, Law Debenture Trust Company ofNew York and the Plan Committee that resolved the litigation related to claims of holders of quarterly income preferred securities in NorthWestern's Chapter 11 bankruptcy case.

NorthWestern plans to complete the previously announced 3.1 million share buy back program by open market purchases for approximately 1.2 million shares. The Company expects to complete the remaining portion of the share buy back program by December 31, 2008. The actual number and timing of share purchases will be subject to market conditions, restrictions related to price, volume, timing, and applicable Securities and Exchange Commission rules.

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 inMontana,South Dakota andNebraska. More information on NorthWestern Energy is available on the Company's Web site at http://www.northwesternenergy.com.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often address our expected future business and financial performance, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," or "will." These statements are based upon our current expectations and speak only as of the date hereof. Our actual future business and financial performance may differ materially and adversely from those expressed in any forward-looking statements as a result of various factors and uncertainties, including, but not limited to:

-- potential additional adverse federal, state, or local legislation or regulation or adverse determinations by regulators could have a material adverse effect on our liquidity, results of operations and financial condition;

-- unanticipated changes in availability of trade credit, usage, commodity prices, fuel supply costs or availability due to higher demand, shortages, weather conditions, transportation problems or other developments;

-- unscheduled generation outages or forced reductions in output, maintenance or repairs; and

-- adverse changes in general economic and competitive conditions in our service territories,

Our Annual Report on Form 10-K, recent and forthcoming Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K and other Securities and Exchange Commission filings discuss some of the important risk factors that may affect our business, results of operations and financial condition. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

SOURCE NorthWestern Corporation

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