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CITY OF FORSYTH, ROSEBUD COUNTY, MONT. $90.205 POLLUTION CONTROL REVENUE REFUNDING BONDS SERIES 1993A RATED 'BBB+' BY DUFF AND PHELPS

 CHICAGO, May 24 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of `BBB+' (Triple-B-Plus) to the City of Forsyth, Rosebud County, Mont.'s $90.205 million offering of pollution control revenue refunding bonds (The Montana Power Company Colstrip Project). Proceeds will be loaned to The Montana Power Company (Montana Power) and used to redeem outstanding pollution control revenue bonds. The bonds will be payable solely from payments under the loan agreement with Montana Power and secured by a like amount of Montana Power's first mortgage bonds.
 Montana Power has low-cost hydro-electric and thermal production facilities. The capital structure as reported is relatively conservative, although leverage is higher and coverages are lower, when adjusted for the Colstrip Unit 4 lease obligation. The service territory economy is relatively stable with low unemployment and steady business growth.
 Expenditures will increase for relicensing and refurbishing of several hydro-electric facilities for which licenses expire in 1994. Peaking capacity needs will be met through upgrading of these facilities, short- and long-term purchase power contracts, and demand- side management. Montana Power has minimal exposure under clean air legislation; its five coal-fired plants are in compliance with phase I of the act. Some expenditures will be required to meet nitrogen oxide emission standards.
 A substantial portion of Montana Power's earnings is derived from non-regulated businesses. Subsidiary Entech is engaged in the mining and sale of coal, and exploration and production of oil and natural gas. The Independent Power Group subsidiary is involved in wholesale power sales and the development, operation, and maintenance of independent power projects. Non-utility operations, while providing opportunities for increased profitability, do carry a greater element of uncertainty. Debt for non-regulated activities is non-recourse to Montana Power Company.
 -0- 5/24/93
 /CONTACT: William A. Abrams of Duff & Phelps Credit Rating Co., 312-368-3112/


CO: ST: Montana IN: SU: RTG

SM -- NY081 -- 1823 05/24/93 15:56 EDT
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Publication:PR Newswire
Date:May 24, 1993
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