Bankrupt co-op manager says gas plant not to blame – CBS News

The former general manager of a bankrupt Montana electric cooperative said Friday that unfavorable contracts, missed payments and lost customers were to blame for its financial problems —...

The former general manager of a bankrupt Montana electric cooperative said Friday that unfavorable contracts, missed payments and lost customers were to blame for its financial problems — not a new but seldom-used $85 million power plant.

Attorneys for creditors of Southern Montana Electric Generation and Transmission Cooperative questioned general manager Tim Gregori under oath for five hours Friday. They were trying to determine what led Southern to amass $21 million in debt before filing for Chapter 11 bankruptcy protection last month.

Billings-based Southern provides wholesale electricity to five rural electric co-ops and the city of Great Falls. It recently built a 40-megawatt gas-fired power plant near Great Falls and had plans before the bankruptcy to expand the plant to 120 megawatts.

Creditors’ attorney John Crist, representing the Yellowstone Valley Electric Cooperative, said Southern’s problems stem largely from the new gas plant, the Highwood Generating Station. The plant has so far has been seldom used in part because of its high operating costs, even as Gregori said Friday that Southern is losing $2 million a month under a contract to purchase power from PPL Montana.

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