BILLINGS, Mont.---PP&L Global, a subsidiary of PP&L Resources (NYSE: PPL) of Allentown, Pa., and the Montana Power Company (NYSE: MTP) today (12/17) signed the final agreement to transfer to PP&L Montana LLC, an indirect subsidiary of PP&L Global, 11 hydroelectric power plants, one storage reservoir and interests in four coal-fired power plants and other related assets, totaling 1,315 megawatts. Other assets, in part, included inventories associated with the power plants. The purchase price is $757 million. It is the largest acquisition ever for a PP&L Resources company.

Roger L. Petersen, PP&L Montana's president and chief executive officer, and Robert P. Gannon, president of Montana Power, were on hand for a signing ceremony held today in Billings.

Petersen said, "We are enthusiastic about serving the people and businesses of the Northwest with competitive, reliable supplies of electricity, just as PP&L companies have done in Pennsylvania for nearly eight decades and have been doing in recent years in Latin America, Europe and England."

Gannon said the completion of the sale ends 87 years of Montana Power's involvement in the regulated generation business. The company will continue to focus on the telecommunications activities of its Touch America subsidiary and on the energy delivery activities of Montana Power. He praised the exceptional work of generation employees, who have operated the plants over the years; of the many continuing employees, who have worked to make the closing a success; and all other employees, who have maintained a positive attitude through a long transition process.

Gannon said, "The extensive experience of the PP&L Resources family of companies in the operation of power plants will serve the people of Montana well. The PP&L name is associated with a strong heritage of community involvement and environmental commitment, and PP&L Montana will be a welcome addition to community life and the business climate in our state."

"We are pleased to welcome the employees of Montana Power who are joining PP&L Montana and the broader PP&L Resources family of companies," said William F. Hecht, chairman, president and chief executive officer of PP&L Resources.

With this acquisition, PP&L Montana becomes one of the largest companies in Montana, with 538 employees. Petersen said there will be no layoffs as a result of the acquisition. Montana Power's generation employees will continue operating the assets as employees of PP&L Montana.

PP&L also has acquired the electricity marketing operation of Montana Power. Petersen said the energy marketing operation will become part of PP&L EnergyPlus Co., LLC, PP&L's marketing company. PP&L's energy marketing operation will remain in Butte, located 240 miles west of the corporate office in Billings, and will sell electricity in both the wholesale and retail markets in Montana and throughout the Northwest.

With this acquisition, PP&L Global now has investments and commitments totaling more than $3.1 billion. The company, formed in 1995 by PP&L Resources, is acquiring or developing power plants in Maine, Arizona, Connecticut and eastern Pennsylvania. It also has ownership interests in electric distribution companies in the United Kingdom, Chile and El Salvador, as well as investments in Argentina, Peru, Spain, Portugal, Bolivia and Brazil.

This purchase, combined with other projects under development, increases PP&L Resources' total domestic generating capacity to about 12,000 megawatts. PP&L Resources plans to increase its U.S. generating capacity to about 20,000 megawatts within the next five years.

Petersen said PP&L Montana will strive to be an important part of the business community throughout the state, "not just in the cities where we have operations. We are looking forward to establishing ourselves as one of the premier corporate citizens in Montana."

"This acquisition provides PP&L Resources with a solid, strategic entry into an entirely new region of the country, consistent with its objective of becoming a major supplier of electricity in key markets throughout the United States," said Hecht.

As for the newly acquired hydroelectric plants, Petersen said, "We have no plans to change the operation of the hydroelectric plants. People who use the rivers where the facilities are located should see the same strong commitment with respect to river management, environmental sensitivity and recreational uses."

The transfer of operating licenses covers the following hydroelectric power plants: Black Eagle, Cochrane, Kerr, Hauser, Holter, Madison, Morony, Mystic, Rainbow, Ryan and Thompson Falls. The purchase also includes Montana Power's investments in the coal-fired Colstrip Generation Station and in the coal-fired Corette plant and the Hebgen storage reservoir.

PP&L Montana also is in the process of acquiring about 1,000 megawatts of additional generating assets in Colstrip, Mont., owned by Puget Sound Energy of Bellevue, Wash. and Portland General Electric of Portland, Ore. Pending the closing of these transactions, Montana Power could receive up to an additional $150 million for added value resulting from Montana Power's generating assets being combined with those of Puget Sound and Portland.

Montana Power's 241.5-megawatt leased interest in Colstrip Unit 4 was not included in the final agreement. Unit 4's long-term contracts will continue to be managed by Montana Power, but PP&L Montana hopes to reach an agreement in the future with Montana Power regarding this asset.

"We will use the proceeds from the generation sale for additional investments in Touch America's plans for a 23,000-mile fiber-optic network, as well as for developing its wireless communications licenses from the Pacific Northwest to the Upper Midwest and as far south as Colorado," Gannon said. "We also have the opportunity to repurchase a portion of the company's outstanding common stock, to reduce corporate indebtedness and to evaluate and invest in activities related to our other businesses."

PP&L Global, located in Fairfax, Va., is PP&L Resources' second-largest subsidiary. The largest, PP&L, Inc., generates electricity; provides electric delivery services to 1.3 million customers in eastern and central Pennsylvania; and trades or markets wholesale energy in the United States and Canada.

Other PP&L Resources' subsidiaries are: PP&L EnergyPlus Co., LLC, which sells competitively priced energy and energy services to newly deregulated markets; Penn Fuel Gas, Inc., which sells and distributes natural gas and propane in Pennsylvania and Maryland; and PP&L Spectrum, Inc., Burns Mechanical, Inc., H.T. Lyons, Inc., McCarl's Inc., McClure Company and Western Mass. Holdings, Inc., which provide energy-management and mechanical contracting and engineering services to businesses.

See our Internet home page, at www.pplresources.com, for recent news releases and other information about PP&L Resources.

The Montana Power Company was formed in 1912 through the merger of four small regional electric companies. Through an evolutionary expansion into related businesses, the company now operates or invests in businesses in North America, Europe and Asia, supplying energy — non-regulated electricity, natural gas, oil and coal — and providing energy and telecommunications services.

The company's utility business in the western two-thirds of Montana is transmission and distribution of electricity and natural gas, serving 285,000 electric customers and 148,000 natural gas customers. Its nonutility businesses are primarily natural gas exploration, production and marketing; coal mining; and an independent power group, which develops, owns and operates nonutility electric generation facilities under the name Continental Energy Services.

Montana Power's growth business is focused around Touch America, its telecommunications subsidiary, presently with a 12,000-mile fiber system in the United States and with plans to have a 18,000-mile continental fiber footprint by 2000 and a 23,000-mile network by 2001.

For additional information about Montana Power and its activities visit the company's Web site at www.mtpower.com

Certain statements contained in this news release, including statements with respect to future generating capacity, are "forward-looking statements" within the meaning of the federal securities laws. Although PP&L Resources, Inc. believes that the expectations reflected in such statements are reasonable, there can be no assurance that the expected results will be achieved. For additional information concerning certain assumptions, risks and uncertainties involved in the forward-looking statements contained herein, please refer to PP&L Resources, Inc.'s reports on file with the SEC.