NorthWestern boss leaves company in good shape

Time and altitude both provide perspective.

And at the end of 2022, from 5,600 feet, in Bob Rowe’s office on the 5^th floor of the NorthWestern Energy building in Butte, it’s easy to see that Rowe, Montana and NorthWestern were a perfect fit.

But it wasn’t always so obvious.

Rowe, 67, is retiring Dec. 31 after a 14-year run as CEO of NorthWestern, during which he took the utility from the shadow of bankruptcy to stability, doubled its stock price, acquired the dams and hydroelectric assets that were at the heart of the old Montana Power, greatly expanded and upgraded the utility’s transmission and distribution infrastructure, fostered a safety-first, employee- and customer-focused culture, and built the copper-trimmed 5-story edifice in Uptown Butte that serves as its Montana headquarters.

Rowe’s Mining City forebears would be proud.

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Rowe’s father’s career took him and his wife from Butte to New Jersey, where Rowe was born, and then to Oregon, where Rowe spent much of his youth.

The family “made our pilgrimages” to Butte, he said, and some of his favorite childhood memories include visits to “the places you’d expect” — Gamer’s, Luigi’s and Lydia’s.

Rowe’s maternal grandfather worked in the Anselmo mine until his 70s and his other grandfather “had a hardscrabble farm near Whitehall,” and came into Butte during the winters to work as a night watchman at Hennessy’s Department Store. Three of Rowe's four grandparents rest now at Mount Moriah Cemetery.

Bob Rowe would get his bachelor’s from Lewis & Clark College and a law degree from the University of Oregon before returning to Montana in 1980 as a VISTA volunteer.

Working in the Billings Legal Services office, his work consisted largely of civil matters like child custody, divorce, and helping clients access low-income assistance programs – including energy help and free home weatherization.

Which gave him his first peek into an aspect of the energy business he never forgot.

Rowe's VISTA service brought him much more. Another VISTA volunteer, Melanie Reynolds, was working in Browning on the Blackfeet reservation. Both came to Helena for a conference, and with his characteristic quiet precision, Rowe recalls, "On March 13, 1981, we went to lunch at the Windbag." The couple would marry in 1984. 

The legal-services work cemented Rowe’s desire to do public-service work, and in 1992 he ran for a seat on the Public Service Commission, representing what was then District 5, including Missoula, Sanders, Mineral, Lake, Flathead and Lincoln counties. At the time, telecom was perhaps PSC’s most pressing issue and among the most exciting, with technology bringing new possibilities, and Rowe became one of the nation's leading experts on rural telecommunications. He did that in part by traveling his district and talking to Montanans.

“The commission was a great place to work,” Rowe says. “I enjoyed getting to meet people in small communities and understanding their problems.” He said that in a lot of places in his district, “You literally couldn’t call from one town to the next. Lincoln County had just terrible phone service. They had lots of party lines. It was an unsafe system that didn’t work for consumers.”

Hand in glove was the trend of utility supply deregulation, which would come to Montana in brutally destructive fashion with the collapse of the old Montana Power.

When the Power’s CEO and deregulation advocates in the 1997 Legislature pushed the issue in Montana, Rowe was a “no” vote on the commission.

“There was a tremendous interest in opening supply markets to competition. Montana Power considered owning regulated generation risky. But there was not any kind of an organized market in the Western United States, no way to identify and manage risks. I opposed the deregulation because it was simply too risky,” he said flatly. “It was a bet-the-farm action … a big bet without adequate risk management.

“That played out in spades.”

When the supply deregulation of Montana Power passed, Rowe worked to implement the legislation as fairly to customers as possible.

“But the benefits were all short-term,” he said, adding that the theory of profit from deregulation “was true for a couple of years, until it wasn’t true.”

Eventually, Montana Power would sell all of its generation, including the vaunted system of Montana hydroelectric generation that had served it so well for so long, and its coal-fired power plants. MPC customers received a credit on their bills for the profit on the generators' sale.

The Power also sold its delivery system — its natural gas pipes and electric wires — to a smallish regional utility called the NorthWestern Corp.

As Montana Power descended into ruin, NorthWestern, too, struggled – for very different reasons. The utility went into bankruptcy for reasons unrelated to its purchase of Montana Power’s delivery systems, but rather related to financial troubles with its other holdings in the turbulent utility landscape.

Rowe and the PSC worked with then-Montana Gov. Judy Martz and others to make sure the state was involved in helping NorthWestern through its financial reorganization. The state hired a law firm and a consulting firm, both ultimately paid for by the utility.

Liberty Consultants’ Infrastructure Audit highlighted the need for investment in electric and gas infrastructure, and also praised the good work of NorthWestern and Montana Power employees despite the turmoil and uncertainty. The audit would become a key blueprint for NorthWestern’s future. 

Rowe steadily built a reputation on the Public Service Commission as a knowledgeable, level-headed advocate for consumers. He was reelected to two more terms without opposition. He would become president of the National Association of Regulatory Utility Commissioners in 1999, and chair its telecommunications committee.

When term limits pushed him off the PSC at the end of 2004, he was the commission’s chairman. He won praise for his service during one of the most tumultuous periods in the PSC’s history from a wide variety of utility experts, consumer advocates — and the state’s biggest political names, Sens. Max Baucus, like Rowe a Democrat, and Republican Conrad Burns.

Burns told Lee Newspapers’ Chuck Johnson that Rowe “was probably as good a (utility commission) guy as we’ve had for a long time. I’ve never seen a guy as immersed in issues … he’s a very capable guy with a good heart.”

Baucus said, “I’ve never met anybody working in our state who had so much the consumers’ best interests at heart, both in energy and especially in telecommunications. He is so respected nationally. He was both brilliant and savvy fundamentally because he knew the subject so well, and he was fighting for consumers.”

At the time, Rowe said, “I knew when I was elected I was going to love this job. I had as good a sense as anyone what was going to be involved. I didn’t fully appreciate how challenging and how exciting it would be, and the opportunities to get things done.”

When he left the commission, Rowe formed a consulting firm on energy and telecommunications matters with two partners. He was careful not to do work within the state at first, being mindful of potential conflicts from his PSC tenure.

But in 2008, as NorthWestern sought to chart a course for recovery, the utility asked Rowe and his partners to help with some customer-focused strategic planning, including attending a Butte board meeting, and shortly afterward Rowe got a call asking him to return and meet alone with the board. He was asked to join the board and become NorthWestern’s CEO.

It wasn’t a move Rowe expected, and he felt loyalty to his consulting partners. But ultimately the opportunity was too good to pass up, and in August of 2008 the soft-spoken, people-focused and largely self-taught utility expert took the reins at Northwestern Energy.

NorthWestern, like many public companies coming out of bankruptcy, had shareholders that were hedge funds with short-term investment goals.

“We needed to attract a different kind of investor,” Rowe said — more long-term, institutional shareholders like insurance companies, retirement funds and the like — that would give the company the breathing room it needed to pursue the infrastructure and generation investments it needed.

Perhaps most importantly, Rowe faced the issue of rebuilding trust — trust in the company’s service from its customers and internal trust from its employees in the direction and management of the utility.

Both were huge tasks with few shortcuts. And Rowe approached them much as he had done his work on the PSC — by personally engaging people. He and his executive team identified the culture they wanted to build.

“We wanted to be financially sound, operationally excellent, utility-focused, customer-focused and community-focused,” Rowe said.

His “number one job” was “listening to stakeholders inside and outside the company,” Rowe said.

He praises the executive team NorthWestern built, singling out his successor, Brian Bird, who joined the company as chief financial officer before Rowe came, helping to re-constitute the company coming out of bankruptcy.

“He was a key partner in all that,” Rowe said. “He loved the company like I do and he worked to get it back on its feet.”

As the company stabilized, Rowe and NorthWestern continued to focus on critical infrastructure development. The company worked hard to expand and modernize its delivery systems to provide better service and deploy technological advancements “at the speed of value,” Rowe said.

But the utility also desperately needed more power generation — particularly more non-carbon-producing generation. A key to that, Rowe thought, was the old Montana Power system of Montana dams and hydro generation stations. They had been purchased by Pennsylvania Power and Light. While it was logical for NorthWestern to pursue them, it would not be easy, with limited resources and with all utilities, including PPL, putting particular value on non-carbon generation.

Because Rowe and NorthWestern had existing business relationships with PPL, including at Colstrip, it was easier to enter into confidential negotiations.

Today, Rowe clearly views the acquisition of the dams one of NorthWestern's vital achievements during his tenure — one basically achieved “under the cover of darkness,” he says with a smile. “The dams would have been very desirable for other companies if they had known PPL would have contemplated a sale.” A senior team at NorthWestern worked for months on valuation, negotiations, due diligence and presenting the proposal to the Public Service Commission in a contested case review before the deal closed. Afterward, Rowe said, a highlight was welcoming the hydro employees into the NorthWestern family.

Rowe believes the company gained tremendous value in the deal. On Nov. 14, 2014, NWE announced that it had completed the purchase of 10 hydroelectric power plants with a total generating capacity of 439 megawatts for $870 million.

Included were the Thompson Falls Dam on the Clark Fork River; Madison Dam, on the Madison River; Mystic Lake Dam on West Rosebud Creek; and Hauser, Holter, Black Eagle, Rainbow, Cochrane, Ryan and Morony dams on the Missouri River.

Rowe said at the time, “The dams that are so much a part of Montana’s environment and heritage are now dedicated to serve our Montana customers, at prices based on the cost of providing service, not on the western power market.

“Fifty years from now, as these assets are paid down, our children and grandchildren will appreciate the farsighted leadership of Montana PSC Chairman (Bill) Gallagher and his colleagues,” he added.

While that half-century has not passed, eight years later the deal does look better than ever. The dams are the linchpin in the utility’s addition of more than 741 megawatts of carbon-free generation over the last decade — enough to serve more than 343,000 homes a year.

For Rowe, the purchase served to reinforce the company’s traditional values. He also felt there was an opportunity to modernize the system to maximize production. And, he said, owning the dams represents “a stewardship opportunity,” to take care of one of the state’s greatest industrial assets. 

The purchase “took a lot of work from a lot of people. Many deserve credit,” Rowe said this month. But Rowe’s role was certainly highlighted on Dec. 15 when the NorthWestern board of directors voted to rename Mystic Lake Dam “Rowe Dam at Mystic Lake” in honor of Rowe’s “dedicated service.”

“Bob has been an extraordinary leader and his valuable contributions to the company, the communities we serve and the energy industry will be remembered always and will provide benefits for years to come,” Bird said in announcing the honor, specifically mentioning the dam acquisitions. “Today 59% of the energy NorthWestern Energy serves our Montana customers with is from carbon-free — hydro, wind and solar — generation.”

Building a new Montana headquarters building, while great for the employees who work there, had a bigger purpose. It was about presence, and continuity in the community. The imposing five-story building at Park and Main streets in the exact center of Uptown Butte is a gathering place. It includes space for community events, and even the big staircase inside is designed to bring employees together, Rowe said.

He praised the partnership of the Butte-Silver Bow county government in the project. When the building was completed in 2016, B-SB built a nearby parking garage that would help NorthWestern employees be safe, particularly in the winter.

The headquarters building was perhaps the biggest outward manifestation of the company’s focus on safety and caring for employees and providing top service to customers.

Rebuilding trust externally was a challenge, Rowe said, “because people in Montana have long memories” and the dismantling of Montana Power still rankles.

Internally, Rowe focused on making sure employees have the right facilities, equipment and tools to do the job, from some 160 workplace buildings to a thousand-plus-vehicle fleet and the tools people use.

“In the early days many of those things were not in very good shape,” he says. “Things like equipment maintenance cycles have a big effect on morale. It goes back to internal trust.”

When it surveys its own culture, Rowe said, the company finds that “caring shows up a lot. It’s one of our dominant characteristics, along with safety, results and learning.”

The efforts, both internal and external, paid off in a big way over the past two years when COVID-19 blew up the way the company worked.

“We had a customer care pandemic crisis action plan that we developed during SARS,” Rowe said. “We needed it.”

Rowe had been thrilled when NorthWestern's Montana offices were opened for walk-in customers. Montana Power had closed them. But when the pandemic hit, suddenly customer care providers couldn’t interact face to face with customers. Crews in the field couldn’t congregate to discuss issues. Little things became big things – like trying to work with a mask and safety glasses in subzero weather.

Vice President Bobbie Schroeppel led the COVID response team, with key members from all parts of the company, Rowe said.

“We installed technology to allow our customer service people to work remotely,” Rowe said. The company even had its energy traders working at home, which required getting waivers to federal regulations.

“I’m so proud of what our employees did looking after one another and helping customers,” he said. The company has bounced back strongly, making some 405 hires since the pandemic protocol was initiated, or 23 percent of the work force.

Rowe leaves the company in very good order. While its $3.5 billion market capitalization makes it one of the country's smaller utilities, measured by its service territory it is one of the largest. It has some 743,000 customers and 1,530 employees — 1,225 of them in Montana. It serves 318 communities in Montana and South Dakota with electrical service and 180 communities in Montana, South Dakota and Nebraska with natural gas service. 

"This company has great people,” Rowe says, and it’s clear that the people are what he will miss most. He plans a busy retirement — “I like to work,” he says — and he plays key roles with several nonprofits, including his service on the University of Montana Foundation Board and positions on the Yellowstone Forever board Jack Creek Preserve board, the electric industry's Global Executive Leadership Network, and the advisory council to the Public Utility Research Center at the University of Florida.

While he certainly didn’t expect to become NorthWestern’s CEO and the longest-serving company leader in the entire sector, from the perspective of time and place Bob Rowe is happy with the career he has had.

 “Looking back now, it all makes sense,” he said. “One thing just leads to another.”

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