UNITED STATES
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) April 10, 1996
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
Item 5. Other Events - Attached news release from Montana Power
Company dated April 10, 1996
PRELIMINARY ARBITRATION DECISION ON COAL-SUPPLY CONTRACT
BUTTE, MT -- A preliminary arbitration decision on the coal-
supply agreement for Colstrip Units 3 and 4, involving the four
non-operating owners of the 700-megawatt plants in southeastern
Montana and coal supplier Western Energy Co., a mining subsidiary
of The Montana Power Company (NYSE: MTP), was announced early this
week by the arbitrator.
Robert J. Sheran, a retired judge, said both parties have a
brief period to file exceptions to his preliminary decision; that
decision, with any amendment Sheran may make, is to become final
May 6.
Western Energy had anticipated receiving a final decision at
this time, rather than a preliminary decision. Although the
Company does not anticipate any material adverse changes in Judge
Sheran's decision, Western Energy deems it prudent to limit
dissemination of specific details until the final decision.
Western Energy can disclose that the preliminary decision is
generally favorable to positions Western Energy advanced at the
hearing, will have no adverse impact on Western's earnings, and
requires Western to cooperate in establishing an external,
interest-bearing reclamation account.
During arbitration hearings on the item that could have been
most costly in the proceeding, Sheran issued a summary judgment
that buyers were not entitled to any credits for transportation
costs.
The four non-operating owners who pursued the arbitration are
Puget Sound Power & Light, Portland General Electric, Pacificorp,
and Washington Water Power. Montana Power, which also owns a
portion of the plants and operates them, was not a party to the
arbitration.
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______________________________
J. P. Pederson
Vice President and Chief
Financial Officer
Dated: April 10, 1996
