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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) March 24, 1995
THE MONTANA POWER COMPANY
(Exact name of registrant as specified in its charter)
Montana 1-4566 81-0170530
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
40 East Broadway, Butte, Montana 59701
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code (406) 723-5421
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Item 5. Other Events
The dispute between Western Energy Company (Western), a
subsidiary of The Montana Power Company (Company), and Puget
Sound Power & Light Company (Puget) regarding the coal supply
agreement for Colstrip Units 1 and 2 between Puget and the
Company's Utility Division, as co-owners of the units, and
Western, as coal supplier has been resolved through arbitration.
See Annual Report on Form 10-K for 1994, Note 2, Consolidated
Financial Statements.
On March 24, 1995, the Company received the arbitration
decision. Excluding production taxes and royalties, the contract
price was reduced approximately $1.20 per ton. As a result, the
Company's consolidated pre-tax income will decrease approximately
$6.5 million on coal sold to Puget since July 1991. The Company
doesn't expect a significant cash flow impact to result from the
arbitration decision, because Puget paid amounts less than
invoiced amounts for coal delivered after April 1992. Western
will refund approximately $9.5 million, plus interest, on coal
sold to the Company's Utility Division since July 1991. This
refund will not affect consolidated income. On an annual basis,
the redetermined contract price is estimated to result in a pre-
tax reduction of consolidated income of approximately $3.5
million per year.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
THE MONTANA POWER COMPANY
(Registrant)
By /s/ J. P. Pederson
J. P. Pederson
Vice President and Chief
Financial Officer
Dated: March 28, 1995
