From Both Sides Now: Bob Rowe on Retiring

Bob Rowe is the retired CEO of NorthWestern Energy, and also former Montana Public Service Commission Chair. Former National Association of Regulator Utility Commissioners President Paul Kjellander, also former Idaho Public Utility Commission President, is Senior Advisor at Public Utilities Fortnightly.

This article was originally published with permission to reprint by Fortnightly Magazine - February 2023.

Public Utilities Fortnightly is a forum for key stakeholders to contribute to the conversations surrounding regulatory policies and issues that impact the energy industry. It includes about 250 utilities, industry organizations, utility regulatory bodies, other governmental agencies, vendors, professional firms and advocacy groups.

Bob retired as CEO of NorthWestern Energy at the end of 2022. He led the energy company during a 14-year period, an amazing length of time for any CEO. Bob sat down for a chat with Paul.Here is a snippet of their conversation. To read the full article, visit Fortnightly.com (February 2023 Magazine).

Paul Kjellander: Your history with NorthWestern Energy involves deregulation, bankruptcy and being a commissioner at the Montana Public Service Commission.

Bob Rowe: I started with the Montana Commission in ’93.

Montana Power was successfully diversified into a range of adjacent businesses. Unfortunately, rather than managing risks, they doubled down on telecommunications investment and, at the same time, decided to support complete restructuring at the supply level.

That led to divestiture of the entire generating fleet in one sale and redeploying the proceeds in telecommunications, which was potentially the highest growth of their competitive businesses, but also the riskiest. At the Commission, we were challenged with managing through that, focused on customer protection, creating rules, and trying to engage in the western market.

The challenge was that the state and Montana Power made a betthe-farm choice on divestiture rather than a more gradual approach to market opening.

Dealing with supply restructuring was challenge enough, but as Montana Power transitioned into being a telco, which ended up in a liquidation bankruptcy, Northwestern Public Service came in, committed to the utility operation, and acquired the distribution system. I, at the time, was delighted to have a company come in that wanted to be in the utility business.

Ultimately, NorthWestern had its own challenges as a result of its aggressive diversification out of the regulated utility business that led them to doing the right thing, going into a reorganization bankruptcy in order to shed all of the nonregulated businesses. I helped lead the State of Montana’s participation in that bankruptcy, with a focus on what kind of company we wanted to serve the State of Montana.

The people in the utility operation were always committed to providing good utility service, and that was key.

Paul: You took the reins of NorthWestern Energy 14 years ago, when it was a troubled utility. What were the biggest issues you had to resolve?

Bob: There are the soft issues and there are hard issues. On the soft side, I spent a lot of time inside the company and outside asking questions, listening to people.

My focus was on rebuilding trust with employees, whether they were originally with Montana Power Company or Northwestern Public Service, and especially with the senior management team, many of whom are still serving today. Rebuilding trust outside the company involved working with customers, policymakers and community leaders.

In the financial area, we needed to move our credit ratings up and to improve the nature of equity ownership.

There was a lot of work to do on the financial side. I want to highlight Brian Bird who was then CFO, and is now CEO. He joined the company during the bankruptcy, to help lead the company out of bankruptcy.

Paul: With the Montana service territory, you had to end deregulation, not something that had been done before. You had to acquire generation and turn it back into a vertically integrated utility.

Bob: There was important legislation in Montana before I joined NorthWestern that allowed for approval of generation additions, either construction or purchase, and that was a key to restoring the ability to serve Montana.

On the generation side, the only nonutility asset that NorthWestern owned by the time they managed to exit everything else through bankruptcy was 222 megawatts in Colstrip Unit 4 that had never been in rate base in Montana. Ultimately, the Montana Commission decided to put that portion of Colstrip Unit 4 into rate base. That was the first generation asset we owned in Montana, dedicated to serving our customers.

We next built a gas plant intended to keep the system stable, integrating all the wind that was coming on to the system. That was a key addition in 2011.

Then, we acquired the hydro system of 11 dams that had been sold by Montana Power to PPL. That is the crown jewel of our Montana supply portfolio.

Paul: Your board of directors renamed one of the company’s dams the Rowe Dam at Mystic Lake. What’s next for you?

Bob: I was beyond shocked that happened. Our board chair made the joke that he’s used to saying, “damn Rowe,” not “Rowe Dam.”

In terms of what’s next, I love this industry and I believe in its mission, so I want to stay involved. I don’t know in what capacity. Both my wife, Melanie, and I are involved in a number of nonprofits, and we’re going to be putting a lot of time into that.

What I’m going to miss is the day-to-day working with people on things that matter. That was why I was eager to join NorthWestern to begin with, working with good people in a part of the country I love on things that matter.