8-K

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): August 2, 2006

NorthWestern Corporation

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation)		0-692 (Commission File Number)	46-0172280 (IRS Employer Identification No.)
125 South Dakota Avenue Sioux Falls, South Dakota (Address of principal executive offices)			57104 (Zip Code)
	(605) 978-2908 (Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD Disclosure.

On August 2, 2006, NorthWestern Corporation (the “Company”) issued a press release reporting that its stockholders had adopted the merger agreement between the Company and Babcock & Brown Infrastructure Limited (“BBI”), re-elected seven board members to a one-year term, ratified the Company’s independent registered public accounting firm, and approved the proposal to adjourn the meeting in order to solicit additional proxies in the event that insufficient votes were received to adopt the merger proposal. The proposal to adjourn the meeting was not acted upon.

The Company announced that the Board of Directors (the “Board”) approved a regular quarterly dividend of 31 cents per share of common stock. The dividend is payable on September 30, 2006, to common stockholders of record as of September 15, 2006.

The Company also announced that the Board had adopted a policy for majority voting in noncontested elections of nominated directors. The policy provides that to be elected, in a noncontested election, a director nominee must receive a majority of the votes cast such that the number of votes "for" the nominee exceeds the summation of the number of votes "against" and “withheld” related to the nominee. If the incumbent director fails to be elected, he or she will promptly tender his or her resignation following certification of the shareholder vote. A plurality vote standard will be retained for the election of directors only in the event of a contested election. The policy of majority voting shall take effect for the next shareholder vote.

A copy of the press release is being furnished pursuant to Regulation FD as Exhibit 99.1 to this Current Re port on Form 8-K and is herein incorporated by reference.

As discussed therein, the press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and, as such, may involve known and unknown risks, uncertainties and assumptions. These forward-looking statements relate to the Company’s current expectations and are subject to the limitations and qualifications set forth in the press release as well as in the Company’s other documents filed with the SEC, including, without limitation, that actual events and/or results may differ materially from those projected in such forward-looking statements.

During the annual meeting, Michael J. Hanson, President and chief executive officer of the Company made a presentation to stockholders and other attendees which discussed the operations of the business and provided an update on the merger with BBI. A copy of the slide presentation that Mr. Hanson used in making his remarks is being furnished pursuant to Regulation FD at Exhibit 99.2 to this Current Report on Form 8-K and is herein incorporated by reference.

The information in this Current Report on Form 8-K provided under Item 7.01 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information provided under Item 7.01 in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

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Item 9.01 Financial Statements and Exhibits.

EXHIBIT NO.	DESCRIPTION OF DOCUMENT
99.1*	Press Release dated August 2, 2006
99.2*	Slide Presentation dated August 2, 2006

* filed herewith

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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 hereunto duly authorized.

	NORTHWESTERN CORPORATION
By:	________________________________________
	Thomas J. Knapp
	Vice President, General Counsel and Corporate Secretary

Date: August 3, 2006

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Index to Exhibits

EXHIBIT NO.	DESCRIPTION OF DOCUMENT
99.1*	Press Release dated August 2, 2006
99.2*	Slide Presentation dated August 2, 2006

* filed herewith

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EX-99.1

		NorthWestern Corporation d/b/a NorthWestern Energy 125 S. Dakota Avenue Sioux Falls, SD 57104-6403 www.northwesternenergy.com
News Release FOR IMMEDIATE RELEASE		NASDAQ-GS: NWEC
Media Contact: Claudia Rapkoch (866) 622-8081 claudia.rapkoch@northwestern.com	Investor Relations Contact: Dan Rausch (605) 978-2902 daniel.rausch@northwestern.com

NorthWestern Corporation's Stockholders Vote to Adopt Merger Agreement

Seven Directors Re-elected to Board

Board Approves Common Stock Dividend of 31 Cents Per Share

SIOUX FALLS, S.D. - Aug. 2, 2006 - NorthWestern Corporation d/b/a NorthWestern Energy (NASDAQ-GS: NWEC) today reported that, at its 2006 Annual Meeting of Stockholders held today in Sioux Falls, S.D, NorthWestern's stockholders approved the adoption of the merger agreement providing for the acquisition of NorthWestern by Babcock & Brown Infrastructure Limited (BBI). Under the terms of the merger agreement, NorthWestern stockholders will be entitled to receive $37 per share in cash. The transaction is expected to be completed by mid 2007, subject to the satisfaction or waiver of closing conditions.

"The stockholders' approval of the merger agreement is the first of several steps for NorthWestern and BBI to complete the transaction. The transaction with BBI presented the best result for our stockholders, customers, employees and the communities we serve. This approval by our stockholders clearly demonstrates the recognition of the benefits of this merger." said Mike Hanson, President and CEO. "We look forward to continuing our approval process with the various regulatory authorities." In addition, NorthWestern's stockholders re-elected E. Linn Draper, Jr., Stephen P. Adik, Jon S. Fossel, Michael J. Hanson, Julia L. Johnson, Philip L. Maslowe and D. Louis Peoples to a one-year term on the Board. Stockholders also ratified Deloitte & Touche, LLP as the company's independent registered public accounting firm for the year ending Dec. 31, 2006.

Board Approves Dividend of 31 Cents Per Share

NorthWestern's Board today announced that it approved a quarterly common stock dividend of 31 cents per share. The dividend is payable on Sept. 30, 2006, to common stockholders of record as of Sept. 15, 2006.

Board Adopts New Policy on Electing Board Members

NorthWestern's Board also announced today that it has adopted a policy for majority voting in noncontested elections of nominated directors. The policy provides that to be elected, in a noncontested election, a director nominee must receive a majority of the votes cast such that the number of votes "for" the nominee exceeds the summation of the number of votes "against" and "withheld" related to the nominee. If the incumbent director fails to be elected, he or she will promptly tender his or her resignation following certification of the shareholder vote.

A plurality vote standard will be retained for the election of directors only in the event of a contested election. The policy of majority voting shall take effect for the next shareholder vote.

– More –

NorthWestern Shareholders Vote to Adopt Merger Agreement

August 2, 2006

Page 2

About NorthWestern Energy

NorthWestern Energy is one of the largest providers of electricity and natural gas in the Upper Midwest and Northwest, serving more than 628,500 customers in Montana, South Dakota and Nebraska. More information on NorthWestern Energy is available on the Company's Web site at www.northwesternenergy.com.

Special Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often address our expected future business and financial performance, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," or "will." These statements are based upon our current expectations and speak only as of the date hereof. Our actual future business and financial performance may differ materially and adversely from those expressed in any forward-looking statements as a result of various factors and uncertainties, including, but not limited to:

• the effect of the definitive agreement to sell NorthWestern to Babcock & Brown Infrastructure Limited (BBI), including the consummation of the transaction or the termination of the definitive agreement due to a number of factors, including the failure to obtain regulatory approvals or to satisfy other customary closing conditions;

• our ability to avoid or mitigate adverse rulings or judgments against us in our pending litigation;

• unanticipated changes in availability of trade credit, usage, commodity prices, fuel supply costs or availability due to higher demand, shortages, weather conditions, transportation problems or other developments, may reduce revenues or may increase operating costs, each of which would adversely affect our liquidity;

• unscheduled generation outages or forced reductions in output, maintenance or repairs which may reduce revenues and increase cost of sales or may require additional capital expenditures or other increased operating costs;

• adverse changes in general economic and competitive conditions in our service territories; and

• potential additional adverse federal, state, or local legislation or regulation or adverse determinations by regulators could have a material adverse effect on our liquidity, results of operations and financial condition.

Our Annual Report on Form 10-K, recent and forthcoming Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K and other Securities and Exchange Commission filings discuss some of the important risk factors that may affect our business, results of operations and financial condition. We undertake no obligation to revise or publicly update any forward-looking statements for any reason.

# # #

EX-99.2

Annual Meeting of Stockholders

August 2, 2006

Forward-Looking Statement

During the course of this presentation today,
we will be discussing certain subjects including
those pertaining to our strategy, and our
discussions may contain forward-looking
information. Although our expectations and
beliefs are based on reasonable assumptions,
actual results may differ materially. These
factors that may affect our results are listed in
certain of our press releases and disclosed in
the company’s public filings with the SEC.

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Agenda

1.

Overview and Update

2.

Financial Summary

3.

Proposed Merger with BBI

a)

Description of Merger

b)

Approvals Required

c)

Timeline

4.

Comments/Questions

3

Overview and Update

NorthWestern Energy’s Goals

Provide
high quality
reliable
service

Provide
energy at
reasonable
prices

We have streamlined our operations to
better focus on our energy business

Provide
attractive
return to our
owners

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Regulated Operations (85%*)

NorthWestern Energy

628,500 customers in Montana, South Dakota and Nebraska

Electric Operations (73%**)

Montana

316,000 customers in 187 communities

7,000 miles of transmission lines

20,300 miles of distribution lines

South Dakota

59,000 customers in 110 communities

3,200 miles of T&D lines

Owns 310 net MW of power generation

Gas Operations (27%**)

Montana

170,000 customers in 105 communities

3,700 miles of underground distribution
pipelines

2,000 miles of transmission pipelines

16.3 Bcf of gas storage

South Dakota/Nebraska

83,500 customers in 59 communities in
SD and 4 communities in NE

2,100 miles of distribution gas mains

Business Overview

Unregulated Operations (15%*)

Electric - Primarily consists of a lease of 30% of Colstrip Unit 4, a 740 MW coal-fired plant in MT

Natural Gas - Gas supply and distribution services to high volume customers in SD/NE

* = % of 2005 consolidated gross margin

** = % of 2005 regulated operations gross margin

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NorthWestern Energy

Utility Service Territory

Electric transmission lines

Natural gas distribution lines

Supplier-owned electric or natural gas lines

Electric generating plant

Natural gas storage fields

Natural gas compressor stations

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Source:  Company reports and SEC filings.                      

Customer and Volume Statistics

Electric Customers (000)

Electric Volume in MWh (000)

Natural Gas Customers (000)

Gas Volume in Therms Sales (MM MMBtu)

CAGR

’02 to ’05 = 1.6%

CAGR

’02 to ’05 = 3.7%

CAGR

’02 to ’05 = 1.6%

CAGR

’02 to ’05 = -1.0%

Gas customer
growth but offset
byconservation
and warm weather

Electric customer
and volume
growth has been
strong over the
last 3 yrs

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Highlights Since Last
Stockholder Meeting

Operational Achievements

Procured electric supply contract for Montana

7 yr agreement at a substantial price discount to current market rates

Comparing to estimated forward pricing curves, the contract starts
about $22 below market rates and ends about $8 above market rates
with March 2012 being the crossover point

Allows flexibility to pursue more permanent electric supply options

1st quartile for Customer Average Interruption Duration Index

Nationwide survey by PA Consulting for 2004

Using IEEE criteria

Timely response to winter storm in South Dakota

More than 1,000 route miles of electric lines were flattened by
the storm

All electric customers lost service at some point of storm

Initial restoration done sooner than expected and without accident
or injury

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Highlights Since Last
Stockholder Meeting

Customer Service Achievements

Received ServiceOne™ Award for second consecutive year

Conducted community weatherization events to prepare
customers for higher winter gas  prices

Established the Challenge Grant of $1 million for customers

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Highlights Since Last
Stockholder Meeting

Financial Achievements

Completed divestiture of non-core assets

Received $49 million from Netexit bankruptcy settlement

Paid down $94 million of debt to achieve debt to cap ratio of  
just under 50%

Debt Refinancings

Amended the secured $250 million credit facility to be an
unsecured $200 million facility and reduced the interest rate

Refinanced $170 million in Pollution Control Bonds lowering the
interest rate more than 1% annually

Improved Credit Ratings

Achieved investment grade credit ratings with two of the three
agencies that rate our secured debt

Increased shareholder dividend from an annual rate of
$1.00/share to an annual rate $1.24/share

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Highlights Since Last
Stockholder Meeting

Resolution of Significant Litigation

All bankruptcy claims resolved except Magten matters

Settled stockholder securities class action and derivative cases

Received $9 million for settlement of NorthWestern v. PPL
Montana breach of contract lawsuit and bankruptcy claims

Provided for PPLM to withdraw and release all of its claims in the
NorthWestern bankruptcy and federal court litigation

Ruling that entitled Company to $9.5 million payment

Relates to 2002 insurance coverage dispute

Proceeds expected in 3rd qtr. 2006

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Highlights Since Last
Stockholder Meeting

Regulatory Achievements

Utility

MPSC approval of the 2005 MT Electric and Natural Gas Default
Supply Costs Trackers

Completed review by the MPSC of the 2005 Electric and Natural Gas
Default Supply Procurement Plans

NWE/BBI Sales Transaction

Filed applications for approval of merger with BBI for FERC, MT,
SD, NE and CFIUS

CFIUS approval on July 31, 2006

HSR and FCC to be filed in next few months

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Financial Highlights

Source:  Company reports and SEC filings.

Note:   Full year 2004 results show combined results for NWEC’s predecessor company from January 1, 2004 to October 31, 2004 and for
NWEC from November 1, 2004 to December 31, 2004.

   (1)    Before reorganization expenses and impairment charge.

   (2)    Excludes cash used in acquisitions.

   (3)    2002 other capital expenditures include $10 million related to Montana’s utility acquisition stipulation, $20 million related to the buyout

           of the automatic meter reading lease and $28 million related to MFM.  

   (4)    Cash flow from continuing operations (excludes change in restricted cash).

Financial Highlights

EBITDA⁽¹⁾

Interest Expense

Cash Flow from Operations⁽⁴⁾

Capital Expenditures⁽²⁾

($ in millions)

($ in millions)

($ in millions)

($ in millions)

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Stronger Balance Sheet

Debt Ratings

Debt to total capitalization ratio is down to 48.7%
(from 50.2% at 12/31/05)

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Proposed Transaction

Proposed Transaction Summary

$37/share

Cash to shareholders

Buyer is Babcock &
Brown Infrastructure

* Enterprise value of $2.2 billion

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Best Value and Risk Profile for
NorthWestern Stockholders

Fairness opinions from widely
recognized firms Credit Suisse
and Blackstone

Positive outcome
for stockholders

Offer does not
increase NWEC debt
and includes
adequate protection
for stockholders

All-cash price a
15.3% premium to
our closing share
price prior to
announcing merger

Best value for stockholders
of proposals received during
the process

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Who is Babcock and Brown Infrastructure?

Listing: ASX: BBI (on Australian Stock Exchange)

Total Assets: $4,500 million

2005 Revenue: $745 million

Headquarters: Sydney, New South Wales, Australia

Website: www.bbinfrastructure.com

BBI is a long-term, conservative, utility asset owner
with a proven track record of owning energy
distribution, transmission and other regulated assets.

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Why BBI?

Access to
Capital

Stability

In addition to providing the highest
shareholder value, BBI is the type of owner
who will support NorthWestern’s
commitment to service excellence and
community growth in the future.

Access to
Expertise

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Approvals Required

Stockholder approval

Federal Energy Regulatory
Commission (FERC)

Montana Public Service
Commission (MPSC)

South Dakota Public Utilities
Commission (SDPUC)

Nebraska Public Service
Commission (NPSC)

Clearance under Hart-Scott-
Rodino Act (HSR)

Federal Communications
Commission (FCC)

Committee on Foreign
Investment in U.S. (CFIUS)

We have filed, or will be filing in the

near future, in all required jurisdictions

to gain merger approval

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Approval Steps for
Regulatory Commissions

File regulatory
applications

Procedural
Schedules and
Data Exchange

Hearings

Regulatory
approval

The procedural schedules have
suggested timelines to effect
approval mid-2007

45 days

120 - 180 days

75 - 90 days

Approval  240 - 315 days
after announcement

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Comments/Questions