As filed with the Securities and Exchange Commission on January 31, 2005.
                           Registration No. 333 -____

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM S-8
                             REGISTRATION STATEMENT
                                      under
                           The Securities Act of 1933

                            NORTHWESTERN CORPORATION

                                      d/b/a

                              NORTHWESTERN ENERGY
                           [NORTHWESTERN ENERGY LOGO]
               (Exact name of issuer as specified in its charter)

        Delaware                                         46-0172280
(State of Incorporation)                    (IRS Employer Identification Number)

                              125 S. Dakota Avenue
                         Sioux Falls, South Dakota 57104
                    (Address of Principal Executive Offices)

  NorthWestern Corporation 2004 Special Recognition Grant Restricted Stock Plan
                            (Full title of the Plan)

                                 Thomas J. Knapp
                                 General Counsel
                            NorthWestern Corporation
                              125 S. Dakota Avenue
                         Sioux Falls, South Dakota 57104
                                 (605) 978-2930
            (Name, address and telephone number of agent for service)

<TABLE>
<CAPTION>

                                  CALCULATION OF REGISTRATION FEE
<S>                          <C>                  <C>                <C>                 <C>
  Title of securities       Amount to be       Proposed maximum      Proposed max.      Amount of
    to be registered         registered       offering price per       aggregate      registration
 Shares of Common Stock      228,320 (1)            share           offering price         fee
                                                  $28.09 (2)         $6,413,508.80       $754.87
</TABLE>

(1) Represents shares of common stock reserved for grants under the NorthWestern
Corporation  2004 Special  Recognition  Grant Restricted Stock Plan which may be
issued  under that plan  subject  to a grant  agreement  evidencing  an award of
restricted stock to NorthWestern Corporation employees.


                                       1

<PAGE>


(2)  Estimated  solely  for the  purpose of  calculating  the  registration  fee
pursuant to Rule 457(h),  based on the average high and low prices of the common
stock as quoted on the National  Association  of  Securities  Dealers  Automated
Quotation  (NASDAQ)  National  Market on January 24, 2005,  which is within five
business days prior to the date of filing of this Registration Statement.


                                       2

<PAGE>


                                     PART I

              INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS


                                Explanatory Note

        NorthWestern Corporation ("NorthWestern") has prepared this Registration
Statement in accordance  with the  requirements of Form S-8 under the Securities
Act of 1933, as amended (the  "Securities  Act").  This  Registration  Statement
registers  228,320 shares of the Company's common stock which may be issued from
time to time to participants  under the  NorthWestern  Corporation  2004 Special
Recognition  Grant  Restricted  Stock  Plan  ("Plan").  The Plan was  created in
connection with NorthWestern's  emergence from Chapter 11 Bankruptcy on November
1, 2004.

        Further,  this  Registration  Statement  is intended to register  common
shares for re-offer  and/or resale by the  individuals  listed under the Selling
Securityholder section of this re-offer prospectus ("Selling  Securityholders").
All of the common shares  registered hereby may be issued under the Plan, which,
if issued to the Selling Securityholders,  shall constitute "control securities"
within the meaning of Instruction C of the General Instructions to Form S-8.

        This Registration  Statement contains two parts. The first part contains
a  re-offer  prospectus  prepared  in  accordance  with  Part I of Form  S-3 (in
accordance  with  Instruction  C of  the  General  Instructions  to  Form  S-8),
including a re-offer  prospectus that may be used for  re-offerings and re-sales
of common shares acquired by the Selling  Securityholders  listed on pages 20-21
of   this   Registration    Statement/re-offer    prospectus.    These   Selling
Securityholders  are  affiliates of  NorthWestern  as defined in Rule 405 of the
Securities   Act.  The  second  part  contains   information   required  in  the
Registration Statement pursuant to Part II of Form S-8.

        The documents  incorporated by reference in this Registration  Statement
pursuant to Item 3 of Part II of this Form S-8,  taken  together,  constitute  a
prospectus that meets the requirements of Section 10(a) of the Securities Act.


                                       3

<PAGE>


                              NORTHWESTERN ENERGY
                           [NORTHWESTERN ENERGY LOGO]


                               RE-OFFER PROSPECTUS


                            NorthWestern Corporation
                         228,320 Shares of Common Stock
        We are NorthWestern  Corporation  ("NorthWestern"  or the "Company"),  a
Delaware  Corporation with its principal  offices in Sioux Falls,  South Dakota.
The shares of our common stock which are the subject of this re-offer prospectus
may be offered and sold to the public by the selling security holders  ("Selling
Securityholders")  identified in this document,  each of whom is deemed to be an
"affiliate"  under Securities and Exchange  Commission Rule 144. These shares of
common stock ("Shares") will be issued to the Selling  Securityholders  pursuant
to the NorthWestern  Corporation 2004 Special Recognition Grant Restricted Stock
Plan ("Plan").  The Selling  Securityholders  may sell their Shares  directly or
indirectly in one or more  transactions on any stock exchange or stock market on
which the  Shares  may be listed at the time of sale,  in  privately  negotiated
transactions,  or through a combination of methods.  These sales may be at fixed
or negotiated  prices,  at market  prices  prevailing at the time of sale, or at
prices related to such prevailing market prices.

        NorthWestern's Shares are listed on the NASDAQ exchange under the symbol
NWEC.  On January 24,  2005,  the last  reported  sale price for  NorthWestern's
shares was $28.00 per share.

        This  re-offer   prospectus   has  been  prepared  for  the  purpose  of
registering the Shares which are the subject of this re-offer  prospectus  under
the  Securities  Act,  and  thereby  to allow for  future  sales by the  Selling
Securityholders to the public. The Selling  Shareholders may sell Shares through
agents,  brokers,  dealers or  directly  to the  public.  Brokers or dealers may
receive  compensation in the form of commissions,  discounts or concessions from
the Selling  Securityholders  and/or  purchasers of the Shares (or both),  which
compensation  may be in excess of typical  commissions.  In connection with such
sales, the Selling Securityholders and any participating broker or dealer may be
deemed to be  "underwriters"  within the  meaning  of the  Securities  Act,  and
commission  and  proceeds  from  the  sale of the  Shares  may be  deemed  to be
underwriting  discounts and commissions  under the Securities Act.  NorthWestern
will receive no portion of the  proceeds  form the sale of Shares by the Selling
Securityholders.

        This investment  involves  significant risks.  Please see "Risk Factors"
beginning on page 10 of this Registration Statement/re-offer prospectus.

        Neither the  Securities  and Exchange  Commission  ("SEC") nor any state
securities  commission  has  approved  or  disapproved  of these  securities  or
determined  whether  this  re-offer  prospectus  is truthful and  complete.  Any
representation to the contrary is a criminal offense.  This re-offer  prospectus
does not  constitute  and offer to sell our Shares in any state with  respect to
any person to whom it is unlawful to make such an offer in such state.

        The date of this re-offer prospectus is January 26, 2005.


                                       4

<PAGE>


        You should rely only on the  information  contained or  incorporated  by
reference in this re-offer  prospectus.  We have not authorized any other person
to provide you with  information  different from or additional to that contained
or  incorporated  by  reference  in  this  re-offer   prospectus.   The  Selling
Securityholders  are offering to sell common shares only in jurisdictions  where
offers and sales are permitted. You should assume that the information appearing
in this re-offer  prospectus and the documents  incorporated by reference herein
and  therein is  accurate  only as of its  respective  date or as of other dates
which are  specified in these  documents.  Our  business,  financial  condition,
results of operations and prospects may have changed since these dates.


Additional Information

        We have filed with the SEC a  registration  statement  on Form S-8 under
the Securities Act to register the common shares offered  hereby.  This re-offer
prospectus is part of the registration statement.  This re-offer prospectus does
not contain all the information contained in the registration  statement because
we have omitted certain parts of the  registration  statement in accordance with
the rules and  regulations  of the SEC.  Statements  contained in this  re-offer
prospectus regarding the contents of any contract or any other document to which
reference is made are not  necessarily  complete,  and, in each instance where a
copy of such  contract  or other  document  has been  filed as an exhibit to the
registration  statement,  reference is made to the copy so filed, each statement
is qualified in all respects by such reference.

        For further  information,  we refer you to the  registration  statement,
which you may read and copy at the public reference facilities maintained by the
Commission at Judiciary  Plaza, 450 Fifth Street,  N.W., Room 1024,  Washington,
D.C. 20549 and at the Commission's  Regional Offices at Citicorp Center,  500 W.
Madison Street, Suite 1400, Chicago, Illinois 60661-2511.  You may obtain copies
for a fee from the Public  Reference  Section of the Commission at its principal
office in  Washington,  D.C. You may call the Commission at  1-800-SEC-0330  for
further information about the public reference rooms. The Commission maintains a
Web site that  contains  reports,  proxy and  information  statements  and other
information regarding NorthWestern.  You may access the Commission's Web site at
http://www.sec.gov.


Incorporation of Certain Documents by Reference

        The Commission  allows us to  "incorporate by reference" the information
we file with them, which means that we can disclose important information to you
by referring you to those documents.  The information  incorporated by reference
is considered to be part of this re-offer  prospectus,  and information  that we
file later with the  Commission  will  automatically  update and supersede  this
information.  We  incorporate  by reference the  documents  listed below and any
future filings we will make with the Commission  under Section 13(a),  13(c), 14
or 15(d) of the Securities Exchange Act of 1934:


        (i)     NorthWestern's  Annual  Report on Form 10-K for the fiscal  year
                ended  December  31,  2003,  as filed  with the SEC on March 15,
                2004;

        (ii)    The  Registrant's  Quarterly Report on Form 10-Q for the quarter
                ended  March 31,  2004 (as filed with the  Commission  on May 7,
                2004);

        (iii)   The  Registrant's  Quarterly Report on Form 10-Q for the quarter
                ended June 30, 2004 (as filed with the  Commission  on August 6,
                2004);


                                       5

<PAGE>


        (iv)    The  Registrant's  Quarterly Report on Form 10-Q for the quarter
                ended  September  30,  2004 (as  filed  with the  Commission  on
                November 8, 2004);

        (v)     The  description  of  NorthWestern's  common stock  contained in
                NorthWestern's  Registration  Statement on Form 8-A12G, as filed
                with the SEC on November 2, 2004,  and any  amendment  or report
                filed for the purpose of updating such description; and

        (vi)    The  Company's  Current  Reports  on  Forms  8-K  subsequent  to
                December 31, 2003, and up to and including the date of filing of
                this Registration Statement.

        You may request a copy of these  filings (not  including the exhibits to
such documents unless the exhibits are specifically incorporated by reference in
the information contained in this re-offer  prospectus),  at no cost, by writing
or telephoning us at the following address:

        NorthWestern Corporation
        Attn: Thomas J. Knapp, Esq., General Counsel
        125 S. Dakota Avenue
        Sioux Falls, South Dakota  57104
        Telephone: (605) 978-2908.

        Any documents  subsequently  filed by NorthWestern under Sections 13(a),
13(c), 14 or 15(d) of the Securities  Exchange Act of 1934,  prior to the filing
of a post effective  amendment  that indicates that all securities  offered have
been sold or which  deregisters all securities then remaining  unsold,  shall be
deemed to be  incorporated  herein by reference in this  Registration  Statement
from that date filed.


The Company(1)

        NorthWestern Corporation,  doing business as NorthWestern Energy, is one
of the largest providers of electricity and natural gas in the Upper Midwest and
Northwest,  serving approximately 608,000 customers in Montana, South Dakota and
Nebraska as of September 30, 2004. We have generated and distributed electricity
in South Dakota and  distributed  natural gas in South Dakota and Nebraska since
1923. In addition, on February 15, 2002, we acquired electricity and natural gas
transmission and distribution  assets and natural gas storage assets in Montana.
We had consolidated operating income from continuing operations of $78.7 million
for the year ended  December  31, 2003,  compared  with  consolidated  operating
income from  continuing  operations of $75.0 million for the year ended December
31, 2002. Our  consolidated  revenues and gross margin for the nine months ended
September 30, 2004 were $818.5  million and $348.8  million,  respectively.  Our
utility  operations  are  regulated  primarily  by the  Montana  Public  Service
Commission,  or MPSC, the Nebraska Public Service Commission, or NPSC, the South
Dakota Public Utilities Commission,  or SDPUC, and the Federal Energy Regulatory
Commission, or FERC. We operate our business in three reporting segments:

        o       electric utility operations;
        o       natural gas utility operations; and


__________________________________
(1) Adapted from most recent 10-Q and 10-K


                                       6

<PAGE>


        o       all other, which primarily  consists of our other  miscellaneous
                service activities that are not included in the other identified
                segments,  together  with the  unallocated  corporate  costs and
                investments, and any eliminating amounts.

Electric Operations


        Montana

        Our Montana electric utility business consists of an extensive  electric
transmission  and  distribution  network.  Our Montana service  territory covers
approximately 107,600 square miles, representing  approximately 73% of Montana's
land area, as of December 31, 2003,  and includes  approximately  786,000 people
according to the 2000 census. As of December 31, 2003, we delivered  electricity
to  approximately  305,000  customers in 191 communities  and their  surrounding
rural  areas in Montana,  including  Yellowstone  National  Park.  By  category,
residential, commercial and industrial, wholesale, and other sales accounted for
approximately   28%,  36%,  12%,  and  24%  of  our  Montana  electric  revenue,
respectively, for the year ended December 31, 2003. We also transmit electricity
for  non-regulated  entities owning generation  facilities,  other utilities and
power marketers serving the Montana electricity market. We do not currently face
material  competition in the transmission and distribution of electricity within
our Montana  service  territory.  Under Montana law, we are obligated to provide
default supply  electric  service in Montana to customers who have not chosen or
are not  allowed  to  choose  an  alternative  electricity  supplier.  We own no
material generation assets in Montana.  Accordingly,  we purchase  substantially
all of our Montana  capacity  and energy  requirements  for default  supply from
third parties.  Those purchases are recovered through a monthly electricity cost
tracking process which is reviewed and adjusted by the MPSC.


        South Dakota

        Our South  Dakota  electric  utility  business  operates  as a regulated
vertically integrated generation, transmission and distribution utility. We have
the exclusive right to serve an assigned  service area in South Dakota comprised
of 25  counties  with a  combined  population  of  approximately  99,500  people
according to the 2000 census. We provided retail electricity to more than 57,600
customers  in 108  communities  in South  Dakota as of  December  31,  2003.  By
category,  residential,  commercial and industrial,  wholesale,  and other sales
accounted for  approximately  38%,  50%, 9% and 3% of our South Dakota  electric
utility revenue,  respectively, for the year ended December 31, 2003. Currently,
we serve these customers  principally from generation  capacity obtained through
our undivided  interests in three jointly owned electric  generation  plants and
other  peaking  facilities  that provide us with 312  megawatts of  demonstrated
capacity.  Direct  competition  does not presently exist within our South Dakota
service territory for the supply and delivery of electricity.


Natural Gas Operations


        Montana

        Our  Montana  natural  gas  business  distributed  natural gas to nearly
163,000 customers located in 109 Montana communities as of December 31, 2003. We
also served several  smaller  distribution  companies  that provided  service to
approximately  28,000  customers  as of December  31,  2003.  At that date,  our
natural  gas  distribution  system  consisted  of  approximately  3,500 miles of
underground distribution pipelines. We also transmit natural gas in Montana from
production  receipt  points and storage  facilities to  distribution  points and
other nonaffiliated  transmission  systems. In the year ended December 31, 2003,
we transported  natural gas volumes of


                                       7

<PAGE>


approximately   55  billion  cubic  feet,  with  peak  capacity  in  Montana  of
approximately  300  million  cubic feet per day. As of December  31,  2003,  the
natural gas  transmission  system consisted of more than 2,000 miles of pipeline
and served more than 130 city gate stations.  We currently own and operate three
working natural gas storage fields in Montana with aggregate storage capacity of
approximately 16.2 billion cubic feet, of which 9 billion cubic feet is reserved
for our regulated utility  business,  and maximum aggregate working gas capacity
of approximately 185 million cubic feet per day.

        Montana's  Natural Gas Utility  Restructuring  and Customer  Choice Act,
which was passed in 1997,  provides  that a natural gas utility may  voluntarily
offer its  customers  their  choice of natural gas  suppliers  and provide  open
access  in  Montana.   Although  we  have  opened  access  to  our  Montana  gas
transmission and distribution  systems and gas supply choice is available to all
of our natural gas  customers  in Montana,  we  currently  do not face  material
competition in the  transmission  and distribution of natural gas in our Montana
service  areas.  We also  provide  default  supply  natural  gas  service  under
cost-based  rates to customers in our Montana service  territories that have not
chosen other suppliers.


        South Dakota and Nebraska

        Our South Dakota and Nebraska natural gas business  provided natural gas
to  approximately  82,000  customers  in 59 South  Dakota  communities  and four
Nebraska communities as of December 31, 2003.

        At that date, we had approximately 2,100 miles of distribution gas mains
in South  Dakota  and  Nebraska.  We also  transport  natural  gas for other gas
suppliers  and  marketers in South Dakota and  Nebraska,  and in South Dakota we
provide  natural  gas  sales to a number  of large  volume  customers  delivered
through the distribution system of an unaffiliated  natural gas utility company.
In addition,  competition  currently  exists for commodity sales to large volume
customers  and for  delivery  in the form of  system  bypass,  alternative  fuel
sources such as propane and fuel oil, and, in some cases,  duplicate  providers.
We do  not  face  material  competition  from  alternative  natural  gas  supply
companies in the communities in which we serve in South Dakota and Nebraska.


Strategy

        We are focused on creating  value for our  investors,  customers and the
communities we serve by becoming the premier  regulated  energy delivery company
in the northwest quadrant of the U.S. To achieve this, we intend to focus on the
following strategies:

        o Maximize the value of our regulated utility business. For more than 80
years, we have provided  customers with reliable,  cost-competitive  energy with
industry-leading customer service. Today, we are a focused utility business with
an  experienced  management  team and a  motivated  workforce.  We will  work to
further improve our reliability and customer service levels,  thereby  enhancing
our relationship with customers and regulators.  We believe that ongoing service
improvement and increasing levels of customer  satisfaction will build value for
all our stakeholders.

        o Pursue stable cash flow and earnings  growth.  Our financial plans and
fiscal  policies  have been  designed  to be  consistent  with the  conservative
business profile of a regulated utility.  In the near-term,  we expect that cash
flow and  earnings  will be linked to organic  growth  derived from our existing
transmission  and  distribution  network.  Over the  next  five  years,  we have
targeted our gross margin to grow by 1.2%  annually and due to annual  projected
cost reductions,  we have targeted  operating income to grow by 3% annually.  In
the longer term, we may use free cash flow to expand


                                       8

<PAGE>


our existing infrastructure or to pursue other regulated electric or natural gas
utility acquisitions.  We intend to pursue growth activities with the purpose of
enhancing our core regulated utility operations.

        o Regain an investment grade rating.  After  consummation of our plan of
reorganization  and  completion  of our exit  financing,  we expect that we will
exhibit credit  characteristics  closely resembling those of an investment grade
regulated  electric and gas utility.  We intend to manage our free cash flow and
operations  in order to further  reduce debt and improve our balance  sheet,  as
well as associated  credit  metrics,  with the goal of regaining our  investment
grade ratings as quickly as possible.

        o Restore  our  credibility  in the  financial  markets.  In addition to
working to stabilize  cash flow and regain an investment  grade  rating,  we are
taking steps to build our  credibility in the financial  markets.  First, we are
concentrating  our efforts on meeting our operating plan and financial  targets.
Second, we intend to pay dividends on our common stock once we have demonstrated
the financial ability to do so. Finally,  we will continue to develop strong and
sustainable internal controls that emphasize accuracy and transparency.

        o Continue to improve our relationship with regulators. We will continue
to work diligently to improve the consistency and  predictability  of regulatory
decisions  affecting our company. To that end, we are pursuing the resolution of
all major  pending  regulatory  proceedings  and the  establishment  of rules in
Montana  to  guide  the  procurement  of  natural  gas and  electricity  for our
customers  in the future.  Additionally,  we will  continue to work closely with
regulatory  authorities to keep them apprised of  developments  and  proactively
address any potential concerns.

        o Retain and motivate our  employees.  We believe that our employees are
critical  to our  ability to execute on our  strategy  of  maintaining  our high
standards  for the  reliable  delivery of  electricity  and natural  gas. We are
working to retain our  experienced  employees by developing  programs to enhance
job  satisfaction  and a  compensation  program to attract,  motivate and retain
employees that perform critical functions.


Competitive Strengths

        We believe  that we are  well-positioned  to  strengthen  our  business,
improve our balance  sheet and credit  ratings,  and increase our  profitability
because of the following:

        o We are focused on our  regulated gas and electric  businesses.  We are
focused  on  operating  our  electric  and  gas  transmission  and  distribution
operations,  the vast majority of which are  regulated.  Since filing for relief
under the provisions of Chapter 11 of the Bankruptcy  Code in September 2003, we
have sold substantially all of our major non-core businesses, including Netexit,
formerly  Expanets,  and Blue Dot.  Before  our  bankruptcy  proceeding,  we had
divested  ourselves of the CornerStone  propane business.  Our management has no
plans to reinvest our utility cash flow into unregulated businesses that are not
utility  related,  and we are limited in our ability to do so by our recent MPSC
settlement.  As  a  result,  we  expect  our  regulated  businesses  to  provide
substantially all of our consolidated operating income.

        o We have  significantly  improved our balance sheet and cash flow. Upon
the consummation of our plan of reorganization,  our overall debt was reduced by
more  than  $1.3  billion   after  giving  pro  forma  effect  to  the  plan  of
reorganization  and our recently  announced debt  offering,  with no significant
debt  maturities  until December  2006. By divesting our non-core  subsidiaries,
reducing  interest  expense and improving the terms of our  commercial  dealings
with vendors, we also have


                                       9

<PAGE>


significantly  improved our operating cash flow related to continuing operations
from an outflow of $103.3 million for the nine months ended  September 30, 2003,
to an inflow of $160.1 million for the nine months ended  September 30, 2004. We
believe that our improved  debt  maturity  profile and cash flow will provide us
with  increased  operating and financial  flexibility to execute on our business
plan and increase future profits.  We will strive to regain our investment grade
debt rating as we further improve our balance sheet.

        o We own and operate  reliable  electricity and natural gas distribution
and supply  businesses.  Our Montana and South Dakota  utility  operations  have
strong  reliability  averages relative to the industry sector as a whole. In the
year ended December 31, 2003, our average  customer outages in Montana and South
Dakota  lasted 87.29  minutes and 63.32  minutes,  respectively,  compared to an
industrywide  average  of  100.85  minutes,  as  reported  by the  Institute  of
Electrical  and  Electronics  Engineers in their 2003  Distribution  Reliability
Benchmarking  study.  Also,  in the year ended  December 31,  2003,  our average
system  interruption in Montana and South Dakota lasted 103.96 minutes and 52.96
minutes, respectively, compared to an industrywide average of 135.00 minutes, as
reported in the benchmarking study.

        o Our Montana and South Dakota utility  operations are cost competitive.
Our  Montana and South  Dakota  utility  operations  are cost  competitive.  Our
Montana and South Dakota monthly bundled  electric rates as of January 2004 were
$59.90 and $67.54 per  megawatt  hour,  respectively,  compared to the  national
average  of  $67.29  per  megawatt  hour,  as  reported  by our  industry  trade
organization,  the Edison  Electric  Institute  in their  January 2004 Bills and
Average Rates Report. Our Montana and South Dakota natural gas rates as of April
2004 were $8.48 and $8.41, respectively, per dekatherm, compared to the national
average of $10.54 per dekatherm,  as reported by the United States Department of
Energy in its April 2004 U.S. Natural Gas Sector Report.

        o We have an  experienced  management  team  who  has  demonstrated  its
ability to achieve our strategy and a new board of directors  whose members have
substantial  experience in the utility  business.  Our current senior management
team  has  implemented  a  business  plan  that we  believe  will  enable  us to
successfully  emerge from  bankruptcy  and  continue  to improve  our  long-term
financial  viability.  Our  senior  management  team  is  supported  by a  solid
foundation  of key  management  employees  with  substantial  experience  in the
operation of a regulated utility business.  In addition,  on August 10, 2004, we
announced the  appointment of a new  seven-member  board of directors  effective
upon our  emergence  from  bankruptcy.  Our new board  includes six  independent
members, many of whom have substantial utility experience and expertise.

        On September  14, 2003,  we filed a voluntary  petition for relief under
the  provisions  of Chapter 11 of the Federal  Bankruptcy  in the United  States
Bankruptcy  Court for the  District  of  Delaware.  During  our  bankruptcy,  we
retained  control of our assets and were authorized to operate our business as a
debtor-in-possession  while being subject to the  jurisdiction of the bankruptcy
court. NorthWestern emerged from bankruptcy on November 1, 2004.

        NorthWestern  was  incorporated  in  Delaware  in  1923.  Our  principal
executive offices are located at 125 S. Dakota Avenue, Sioux Falls, South Dakota
57104. Our telephone  number is (605) 978-2908.  We maintain an Internet site at
http://www.northwesternenergy.com  which contains information  concerning us and
our  subsidiaries.  The  information  contained  on  our  Internet  site  is not
incorporated by reference in this prospectus and should not be considered a part
of this prospectus.


                                       10

<PAGE>


Risk Factors

        You should carefully  consider the risk factors described below, as well
as all other  information  available to you,  before making an investment in our
Shares or other securities.  The risks and uncertainties described below are not
the only ones facing us.  Additional risks and uncertainties not presently known
or that we currently  believe to be less  significant may also adversely  affect
us.


Bankruptcy-Related Risks

        Parties  objecting to  confirmation  of our plan of  reorganization  may
appeal the order confirming our plan of reorganization.

        On October 22, 2004,  Magten  Asset  Management  Corporation  ("Magten")
filed a motion  with the  Bankruptcy  Court  seeking a stay of the  confirmation
order pending  resolution of their appeal of such order,  which notice of appeal
was filed on October 25, 2004. On October 25, 2004, the Bankruptcy  Court denied
Magten's motion for a stay. Thereafter,  Magten requested that the United States
District Court for the District of Delaware  impose a stay of the  effectiveness
of the confirmation  order pending resolution of Magten's appeal. On October 29,
2004, the Delaware  District Court denied Magten's motion for a stay. The appeal
has now been  docketed with the District  Court but a briefing  schedule has not
been issued.  Although we will vigorously  defend against the appeal,  we cannot
currently   predict  the  impact  or  resolution  of  Magten's   appeal  of  the
confirmation order.

        Our Chapter 11  proceedings  and  subsequent  emergence  may result in a
negative  public  perception of us that may adversely  affect our  relationships
with customers and suppliers, as well as our business, results of operations and
financial condition.

        Despite  the  fact  that we have  successfully  consummated  our plan of
reorganization  and executed our exit financing on November 1, 2004, our Chapter
11  proceedings  have  negatively  impacted  us and  our  future  prospects  are
uncertain. The uncertainty regarding our future prospects may hinder our ongoing
business  activities and ability to operate,  fund and execute our business plan
by:  (i)  impairing  relations  with  existing  and  potential  customers;  (ii)
negatively  impacting  our  ability  to  attract,   retain  and  compensate  key
executives and associates and to retain employees generally;  (iii) limiting our
ability  to  obtain  trade  credit;   and  (iv)  impairing  present  and  future
relationships with vendors and service providers.

        We have  incurred,  and expect to continue to incur,  significant  costs
associated  with the  Chapter 11  proceedings,  which may  adversely  affect our
results of operations and cash flows.

        We have incurred and will continue to incur significant costs associated
with the  Chapter 11  proceedings.  The amount of these  costs,  which are being
expensed as incurred,  are expected to have a significant  adverse effect on our
results of operations and cash flows.  Although our plan of  reorganization  has
been successfully consummated and we have emerged from bankruptcy,  we expect to
continue to incur  significant  costs in connection with the consummation of our
plan of  reorganization.  These  expenses  are also  expected to have an adverse
effect on our results of operations and cash flows.

        We will be  subject  to  claims  made  after  the date that we filed for
bankruptcy  and  other  claims  that  were  not  discharged  in  the  bankruptcy
proceeding,  which  could  have a  material  adverse  effect on our  results  of
operations and profitability.


                                       11

<PAGE>


        Although most claims made against us prior to the date of the bankruptcy
filing were satisfied and discharged in accordance with the terms of our plan of
reorganization or in connection with settlement agreements that were approved by
the  Bankruptcy  Court  prior to  consummation  of our  plan of  reorganization,
certain claims that were not  discharged or settled may have a material  adverse
effect on our results of  operations  and  profitability.  In  addition,  claims
arising  after  the date of our  bankruptcy  filing  which  were  not  otherwise
discharged pursuant to Section 1141 of the Bankruptcy Code may not be discharged
in the bankruptcy proceeding.

        Claims made against us prior to the date of the bankruptcy  filing might
not be discharged  if the claimant had no notice of the  bankruptcy  filing.  In
addition, in other bankruptcy cases, states have challenged whether their claims
could be  discharged  in a federal  bankruptcy  proceeding if they never made an
appearance  in the case.  This  issue has not been  finally  settled by the U.S.
Supreme Court.

        Upon  consummation  of our  plan of  reorganization,  we  established  a
reserve of  approximately  4.4  million  shares of common  stock from the shares
allocated to holders of our trade vendor claims in excess of $20,000 and holders
of senior  unsecured  notes.  The  shares  held in this  reserve  may be used to
resolve various outstanding  unliquidated  litigation,  as these claims were not
discharged  upon  consummation  of our plan of  reorganization.  If these claims
ultimately exceed the reserve,  then such claimants could request the bankruptcy
court to amend our plan of  reorganization to allow for payment of the claims in
excess of the reserve.

        Certain of our prepetition  creditors received NorthWestern common stock
pursuant to our plan of reorganization and have the ability to influence certain
aspects of our business operations.

        Under our plan of  reorganization,  holders of certain  claims  received
distributions  of shares of our common stock.  Harbert  Management  Corporation,
which we refer to as Harbert  Management,  is affiliated with funds which, based
on the most recent information made available to us, collectively  received more
than 10% of our new common stock.  Harbert  Management could acquire  additional
claims or shares,  or divest  claims or shares in the  future.  Our  prepetition
senior unsecured noteholders, trade vendors with claims in excess of $20,000 and
holders of our trust  preferred  securities and our quarterly  income  preferred
securities received, collectively, 9% of our new common stock. Certain employees
will  receive  228,320  shares as part of an emergence  restricted  stock grant.
Other than  Harbert  Management,  however,  we are not aware of any other entity
that owns or controls 10% or more of our common stock distributed upon emergence
pursuant to our plan of reorganization.

        If any holders of a significant number of the shares of our common stock
were to act as a group,  such  holders  could be in a position  to  control  the
outcome of actions requiring stockholder  approval,  such as an amendment to our
certificate of incorporation,  the authorization of additional shares of capital
stock, and any merger, consolidation, or sale of all or substantially all of our
assets, and could prevent or cause a change of control of NorthWestern.


Risks Relating to Our Business

        We are one of several  defendants in the McGreevey  litigation,  a class
action  lawsuit   brought  in  connection   with  the  sale  of  generating  and
energy-related  assets by The Montana Power Company.  If we do not  successfully
resolve this lawsuit, the insurance coverage does not pay for any damages we are
found liable for, or our indemnification  claims against Touch America Holdings,


                                       12

<PAGE>


Inc.  cannot be enforced and  reimbursed,  then our business  will be harmed and
there will be a material adverse impact on our financial condition.

        We are one of several  defendants  in a class  action  lawsuit  entitled
McGreevey,  et al. v. The Montana Power Company,  et al., now pending in federal
court in Montana. The lawsuit, which was filed by the former shareholders of The
Montana  Power  Company  (many of whom  became  shareholders  of  Touch  America
Holdings,  Inc. as a result of a corporate  reorganization  of The Montana Power
Company),  claims that the disposition of various  generating and energy-related
assets by The Montana  Power  Company was void  because of the failure to obtain
shareholder approval for the transactions. Plaintiffs thus seek to reverse those
transactions,  or  receive  fair  value for their  stock as of late  2001,  when
plaintiffs claim shareholder  approval should have been sought.  NorthWestern is
named as a defendant due to the fact that we purchased the Montana  Power,  LLC,
which the plaintiffs claim is a successor to The Montana Power Company.  On July
10, 2004, we and the other insureds under the applicable  directors and officers
liability  insurance  policies along with the plaintiffs in the McGreevey  case,
plaintiffs in the In Re Touch America Holdings,  Inc. Securities  Litigation and
the Touch America Creditors Committee reached a tentative settlement as a result
of mediation.  Among the terms of the tentative settlement, we, our wholly owned
subsidiary  Clark Fork,  and other  parties will be released  from all claims in
this case,  the  plaintiffs in McGreevey  will dismiss their claims  against the
third party purchasers of the generation assets and non-regulated  energy assets
of Montana Power Company,  including PPL Montana,  and a settlement  fund in the
amount of $67 million (all of which will be  contributed  by the former  Montana
Power  Company  directors and officers  liability  insurance  carriers)  will be
established.  The settlement is subject to the occurrence of several conditions,
including  approval of the proposed  settlement by the  Bankruptcy  Court in our
bankruptcy  proceeding  and approval of the proposed  settlement  by the federal
District Court for the District of Montana, where the class actions are pending.
Plaintiffs in the McGreevey class action have filed a motion for approval of the
settlement;  no hearing  date has been set. If the  proposed  settlement  is not
consummated,  then we intend to  vigorously  defend  against this  lawsuit.  The
Bankruptcy  Court has entered an order permitting the plaintiffs in McGreevey to
file a fraudulent  conveyance action against us if we are not able to consummate
the  settlement.  The  Bankruptcy  Court has scheduled a hearing on February 10,
2005,  to approve  the  settlement.  We cannot  currently  predict the impact or
resolution of this  litigation or reasonably  estimate a range of possible loss,
which could be  material,  and the  resolution  of these  lawsuits  may harm our
business and have a material adverse impact on our financial condition.

        We  are a  defendant  in  litigation  related  to our  quarterly  income
preferred  securities,  which  litigation  is related to the transfer of certain
assets to  NorthWestern  from our  subsidiary,  Clark Fork.  Certain current and
former  officers of Clark Fork are  defendants in a lawsuit  related to the same
transfer of assets.  Our business  could be harmed and there could be a material
adverse impact on our financial condition if we do not successfully  resolve the
lawsuit.

        Certain  creditors and  parties-in-interest  have initiated legal action
against us related to the transfer of the assets and liabilities  comprising our
Montana utility operations from Clark Fork to NorthWestern, and seek the removal
of such assets from our estate or the imposition of a constructive trust for the
benefit of such creditors.  This litigation could adversely affect our business,
results of  operations,  our  financial  condition  and our  ability to continue
normal operations.

        We are the subject of a formal  investigation by the SEC relating to the
restatement of our 2002 quarterly financial  statements and other accounting and
financial  reporting matters. If the investigation was to result in a regulatory
proceeding or action against us, then our business and financial condition could
be harmed.


                                       13

<PAGE>


        In December  2003,  the SEC notified  NorthWestern  that it had issued a
formal order of private investigation and subsequently subpoenaed documents from
NorthWestern and affiliated  companies  NorthWestern  Communications  Solutions,
Expanets  and Blue  Dot.  This  development  followed  the  SEC's  requests  for
information  made in  connection  with the  previously  disclosed  SEC  informal
inquiry into  questions  regarding the  restatements  and other  accounting  and
financial reporting matters.  Since December 2003, we have periodically received
and  continue  to  receive  subpoenas  from  the SEC  requesting  documents  and
testimony from employees  regarding these matters.  The SEC  investigation  will
continue,  and any claims alleging violations of federal securities laws made by
the SEC were not extinguished pursuant to our plan of reorganization.

        In  addition,   certain  of  our  directors  and  several  employees  of
NorthWestern   and  our   subsidiary   affiliates   have  been   interviewed  by
representatives of the Federal Bureau of Investigation  (FBI) concerning certain
of the allegations made in the class action securities and derivative litigation
matters.  We have not been advised that  NorthWestern  is the subject of any FBI
investigation. We understand that the FBI and the Internal Revenue Service (IRS)
have  contacted  former  employees of ours or our  subsidiaries.  As of the date
hereof,  we are not aware of any other  governmental  inquiry  or  investigation
related to these matters.

        We are cooperating with the SEC's  investigation and intend to cooperate
with the FBI if we are contacted in connection with any investigation. We cannot
predict whether or not any other  governmental  inquiry or investigation will be
commenced. We cannot predict when the SEC investigation will be completed or its
outcome. If the SEC determines that we have violated federal securities laws and
institutes  civil  enforcement  proceedings  against us, we may face  sanctions,
including,  but not limited to, monetary penalties and injunctive relief and any
monetary  liability  incurred by us may be material to our financial position or
results of operations.

        We are subject to certain regulations in the State of Montana regarding,
among other things,  the source of our power  supplies and the recovery of costs
from our customers  associated with  purchasing our power supplies.  If the MPSC
disallows  the recovery of the costs  incurred in entering  into default  supply
portfolio contracts while we are required to act as the "default supplier," then
we may not be able to fully  recover  the costs  incurred in  procuring  default
supply  contracts,  which could  adversely  affect our net income and  financial
condition.

        Our  electric and natural gas default  supply costs are being  recovered
through an annual  cost  tracking  process  pursuant to which rates are based on
estimated  electricity  and natural gas loads and supply  costs for the upcoming
tracking  period and are  annually  reviewed  and  adjusted  by the MPSC for any
differences in the previous tracking year's estimates to actual information. The
MPSC could,  in any particular  year,  disallow the recovery of a portion of the
electricity or natural gas default supply costs if it makes a determination that
we acted imprudently with respect to the open market purchase strategies or that
the approved  supply  contracts  were not prudently  administered.  A failure to
recover  such  costs  could  adversely  affect  our  net  income  and  financial
condition.

        We are subject to  extensive  governmental  regulations  that affect our
industry  and our  operations.  Existing  and changed  regulations  and possible
deregulation  have  the  potential  to  impose   significant   costs,   increase
competition  and change rates which could have a material  adverse effect on our
net income and financial condition.

        Our operations and the operations of our subsidiary entities are subject
to extensive  federal,  state and local laws and regulations  concerning  taxes,
service areas, tariffs, rates, issuances of securities, employment, occupational
health and safety, protection of the environment and other


                                       14

<PAGE>


matters.  In addition,  we are required to obtain and comply with a wide variety
of licenses,  permits and other approvals in order to operate our facilities. In
the course of complying with these requirements, we may incur significant costs.
If we fail to comply  with these  requirements,  we could be subject to civil or
criminal  liability and the imposition of liens or fines. In addition,  existing
regulations  may  be  revised  or  reinterpreted,  new  laws,  regulations,  and
interpretations  thereof  may  be  adopted  or  become  applicable  to us or our
facilities  and future  changes in laws and  regulations  may have a detrimental
effect on our business.

        Our utility businesses are regulated by certain state commissions.  As a
result,  these  commissions  have the ability to review the regulated  utility's
books and records.  This ability to review our books and records could result in
prospective negative adjustments to our rates.

        The United  States  electric  utility  and natural  gas  industries  are
currently experiencing  increasing competitive pressures as a result of consumer
demands, technological advances,  deregulation,  greater availability of natural
gas-fired  generation  and other  factors.  Competition  for various  aspects of
electric and natural gas  services is being  introduced  throughout  the country
that will open these  markets  to new  providers  of some or all of  traditional
electric  utility and natural gas services.  Competition  is likely to result in
the  further  unbundling  of electric  utility  and natural gas  services as has
occurred in Montana for electricity  and Montana,  South Dakota and Nebraska for
natural  gas.   Separate  markets  may  emerge  for  generation,   transmission,
distribution,  meter reading,  billing and other services  currently provided by
electric  utility and natural gas providers as a bundled  service.  As a result,
significant  additional  competitors  could  become  active  in the  generation,
transmission and distribution segments of our industry.

        Proposals have been  introduced in Congress to repeal the Public Utility
Holding  Company Act of 1935,  or PUHCA.  To the extent  regulatory  barriers to
entry are eliminated, competitive pressures increase, or the pricing and sale of
transmission  or  distribution  services  or  electricity  or fuel  assume  more
characteristics  of a commodity  business,  we could face increased  competition
adverse to our business. There is no assurance that the introduction of new laws
or other future regulatory  developments will not have a material adverse effect
on our  business,  results of operations  or financial  condition.  If we cannot
comply with all applicable regulations, our business, results of operations, and
financial condition could be adversely affected.

        Under  our  plan  of  reorganization,   funds  affiliated  with  Harbert
Management  collectively received more than 10% of our new common stock. Harbert
Management  or any other entity that owns 10% or more of our voting  securities,
may be  deemed  to be a  holding  company  under  PUHCA and we would be deemed a
subsidiary of a holding  company unless such 10% holder were able to qualify for
an exemption from  registration.  Unless such  exemption is available,  such 10%
holder and we and our  subsidiaries  would  become  subject  to a  comprehensive
regulatory  scheme imposed by the SEC in order to protect  customers,  investors
and the public  interest.  Although the SEC does not regulate  rates and charges
under PUHCA,  it does regulate the structure,  financing,  lines of business and
internal  transactions  of public  utility  holding  companies  and their system
companies.  In order to obtain  financing,  acquire  additional  public  utility
assets or stock, or engage in other significant transactions, we would generally
be required to obtain approval from the SEC under PUHCA.

        We will not be able to  fully  recover  transition  costs,  which  could
adversely affect our net income and financial condition.


                                       15

<PAGE>


        Montana law required the MPSC to determine the value of net  unmitigable
transition  costs  associated  with the  transformation  of the  former  utility
business of The Montana  Power  Company  from a vertically  integrated  electric
service company to a utility  providing only default supply and transmission and
distribution  services.  The  MPSC  was  also  obligated  to  set a  competitive
transition charge, or CTC, to be included in distribution rates to collect those
net  transition  costs.  The  majority  of  these  transition  costs  relate  to
out-of-market power purchase contracts,  which run through 2032, that the former
owner of our Montana  transmission  and  distribution  business  was required to
enter into with certain  "qualifying  facilities" (QF) as established  under the
Public  Utility  Regulatory  Policies  Act of 1978.  Based on results of an MPSC
order and a FERC determination,  we will not be able to fully recover all of the
transition  costs.  As of September 30, 2004, we estimated  that we will fail to
collect  approximately  $146.6  million on a net  present  value  basis over the
remaining terms of the QF power supply  contracts.  While the CTC is designed to
adjust and  compensate  for future  changes  in sales  volumes or other  factors
affecting  actual  cost  recoveries,  the CTC runs  through  the year 2029,  and
therefore,  we cannot predict with  certainty the actual  recovery of transition
costs.  Changes in the recovery of transition  costs could adversely  affect our
net income and financial  condition by increasing  the current under  collection
amount.

        We may not be able to continue as a going concern  unless we can achieve
profitability within the near future.

        The  financial  statements  in our  Quarterly  Report on Form 10-Q as of
September  30,  2004,  have  been  prepared  on a  going  concern  basis,  which
contemplates continuity of operations,  realization of assets and liquidation of
liabilities  in the ordinary  course of business.  As a result of the bankruptcy
filing and related  events,  there is no assurance that the carrying  amounts of
assets will be realized or that  liabilities  will be  liquidated or settled for
the amounts recorded. In addition, as noted in the unaudited pro forma financial
statements  included herein,  the  implementation  of our plan of reorganization
could change the amounts  reported in the  financial  statements.  Our liquidity
generally depends on cash provided by operating activities and access to the new
credit  facility.  Our ability to continue as a going  concern and the continued
appropriateness  of using the going concern  basis for our financial  statements
are  dependent  upon,  among  other  things,  (i) our ability to comply with the
covenants of the new credit facility, (ii) our ability to maintain adequate cash
on hand,  (iii) our ability to continue to generate cash from  operations,  (iv)
our ability to attract,  motivate and retain key executives  and employees,  and
(v) our ability to achieve profitability following such consummation.

        Our actual fresh-start reporting adjustments may vary significantly from
the fresh-start  reporting adjustments used to calculate the pro forma financial
data that is included in our most recent Quarterly Report on Form 10-Q.

        We adopted  fresh-start  reporting upon the  consummation of our plan of
reorganization. Under fresh-start reporting, our confirmed enterprise value will
be allocated to our assets based on their  respective  fair values in conformity
with the purchase  method of accounting for business  combinations.  Any portion
not attributed to specific  tangible or identified  intangible assets will be an
indefinite-lived intangible asset referred to as "reorganization value in excess
of value of  identifiable  assets" and reported as goodwill.  Any excess of fair
value  of  assets  and  liabilities  over  confirmed  enterprise  value  will be
allocated as a pro rata reduction of the amounts that otherwise  would have been
assigned to all of the assets  except  financial  assets other than  investments
accounted for by the equity method,  assets to be disposed of by sale,  deferred
tax assets,  prepaid assets relating to pension or other postretirement  benefit
plans and any other current assets.


                                       16

<PAGE>


        We have prepared unaudited pro forma  consolidated  financial data which
give effect to  fresh-start  reporting  adjustments,  as  reflected  in Note 17,
"Reorganization  Proforma Reporting," to our 10-Q, filed November 8, 2004. These
statements  have been prepared by us based on the  assumptions  described in the
footnotes to the pro forma financial  information contained in Note 17. However,
we will obtain  actuarial  valuations and reduce certain tax attributes based on
our  cancellation of indebtedness  income as of our emergence date,  November 1,
2004.  As a result,  we expect there may be  adjustments  in carrying  values of
certain assets and liabilities and such adjustments may be material.

        Our  electric  and  natural  gas  distribution  systems  are  subject to
municipal condemnation.

        The  government  of each  of the  municipalities  in  which  we  provide
electric or natural gas service has the right to condemn our  facilities in that
community  and to  establish a municipal  utility  distribution  system to serve
customers  by use of such  facilities,  subject to the approval of the voters of
the  community  and the payment to  NorthWestern  of fair  market  value for our
facilities,  including  compensation for the cancellation of our service rights.
If we  lose  a  material  portion  of  our  distribution  systems  to  municipal
condemnation,  our net income and financial condition could be harmed because we
may not be able to replace or repurchase  income  generating  assets in a timely
manner, if at all.

        Our  revenues  and results of  operations  are subject to risks that are
beyond our control,  including  but not limited to future  terrorist  attacks or
related acts of war.

        The cost of repairing  damage to our facilities  due to storms,  natural
disasters,  wars,  terrorist acts and other  catastrophic  events,  in excess of
reserves  established  for such repairs or insurance  recoveries,  may adversely
impact our results of operations, financial condition and cash flows. Generation
and  transmission  facilities,  in general,  have been  identified  as potential
terrorist  targets.  The  occurrence or risk of  occurrence of future  terrorist
activity  may impact our results of  operations,  financial  condition  and cash
flows in unpredictable  ways. These actions could also result in adverse changes
in the  insurance  markets  and  disruptions  of  power  and fuel  markets.  The
availability of insurance covering risks we and our competitors typically insure
against may decrease. In addition,  the insurance we are able to obtain may have
higher  deductibles,  higher  premiums and more  restrictive  policy  terms.  In
addition,  our electric  transmission  and  distribution,  electric  generation,
natural gas distribution and pipeline and gathering facilities could be directly
or indirectly harmed by future terrorist activity.

        The  occurrence  or risk of occurrence  of future  terrorist  attacks or
related acts of war could also  adversely  affect the United States  economy.  A
lower  level  of  economic   activity  could  result  in  a  decline  in  energy
consumption, which could adversely affect our revenues and margins and limit our
future  growth  prospects.  Also,  these risks could  cause  instability  in the
financial markets and adversely affect our ability to access capital or the cost
we pay for such capital.

        Seasonal and  quarterly  fluctuations  of our business  could  adversely
affect our results of operations and financial condition.

        Our electric and gas utility  business is seasonal and weather  patterns
can  have  a  material  impact  on  their  financial  performance.   Demand  for
electricity  is often  greater in the summer and winter months  associated  with
cooling and heating.  Because  natural gas is heavily used for  residential  and
commercial  heating,  the demand for this product  depends  heavily upon weather
patterns  throughout our market areas,  and a significant  amount of natural gas
revenues are recognized in the


                                       17

<PAGE>


first and  fourth  quarters  related to the  heating  season.  Accordingly,  our
operations  have  historically  generated  less revenues and income when weather
conditions are milder in the winter and cooler in the summer.  In the event that
we experience  unusually mild winters or cool summers in the future, our results
of operations and financial condition could be adversely affected.  In addition,
exceptionally  hot summer  weather or unusually  cold winter  weather  could add
significantly  to  working  capital  needs  to fund  higher  than  normal  power
purchases to meet customer demand for electricity and natural gas.

        Changes in commodity  prices and availability of supply may increase our
cost of producing and distributing  electricity and distributing  natural gas or
decrease  the  amount we receive  from  selling  electricity  and  natural  gas,
adversely affecting our financial performance and condition.

        Our  wholesale  costs for  electricity  and  natural  gas are  recovered
through  various  pass-through  mechanisms  in each of the states we serve.  The
rates  are   established   based  upon  projected   market  prices  or  contract
obligations.  As these variables change, we adjust our rates through our monthly
tracker.  To the  extent  our  adjusted  rate  is  deemed  inappropriate  by the
applicable state regulatory commission,  we could under-recover our costs, which
would adversely impact our results of operations.  While the tracker  mechanisms
are designed to allow a timely  recovery of costs, a rapid increase in commodity
costs may create a temporary, material under recovery situation. As a result, we
may not be able to immediately  pass on to our retail  customers rapid increases
in our energy supply costs, which could reduce our liquidity.

        We do  not  own  any  natural  gas  reserves  and do  not  own  electric
generation  assets to  service  our  Montana  operations.  As a  result,  we are
required  to procure  our  entire  natural  gas  supply  and all of our  Montana
electricity supply pursuant to contracts with third-party suppliers. In light of
this reliance on third-party  suppliers,  we are exposed to certain risks in the
event a third-party supplier is unable to satisfy its contractual obligation. If
this  occurred,  we might be  required to purchase  gas and  electricity  supply
requirements in the energy markets, which may not be on commercially  reasonable
terms, if at all. If prices were higher in the energy  markets,  it could result
in a temporary material under-recovery that would reduce our liquidity.

        Our utility business is subject to extensive  environmental  regulations
and potential environmental liabilities, which could result in significant costs
and liabilities.

        Our utility  business  is subject to  extensive  regulations  imposed by
federal,  state and  local  government  authorities  in the  ordinary  course of
operations with regard to the environment,  including environmental  regulations
relating to air and water quality,  solid waste disposal and other environmental
considerations.   We  believe  that  we  are  in  substantial   compliance  with
environmental  regulatory  requirements  and that  maintaining  compliance  with
current  requirements  will not  materially  affect our  financial  position  or
results  of  operations.  However,  possible  future  developments,  such as the
promulgation of more stringent  environmental  laws and regulations,  and future
enforcement  proceedings  that may be taken by environmental  authorities  could
affect the costs and the manner in which we conduct our business and could cause
us to make substantial  additional capital  expenditures.  There is no assurance
that we would be able to recover  these  increased  costs from our  customers or
that our business,  financial  condition and results of operations  would not be
materially adversely affected.

        Many of these  environmental  laws and  regulations  create  permit  and
license requirements and provide for substantial civil and criminal fines which,
if imposed,  could result in material  costs or  liabilities.  We cannot predict
with certainty the occurrence of a private tort allegation or


                                       18

<PAGE>


government claim for damages associated with specific environmental  conditions.
We may be required  to make  significant  expenditures  in  connection  with the
investigation  and  remediation of alleged or actual spills,  personal injury or
property damage claims, and the repair and upgrade of our facilities in order to
meet future requirements and obligations under environmental laws.

        Environmental  laws and  regulations  require us to incur certain costs,
which  could be  substantial,  to operate  existing  facilities,  construct  and
operate new facilities,  and mitigate or remove the effect of past operations on
the environment.  Governmental regulations establishing environmental protection
standards are continually evolving, and, therefore,  the character,  scope, cost
and availability of the measures we may be required to take to ensure compliance
with evolving laws or regulations cannot be predicted. Our range of exposure for
environmental  remediation obligations is estimated to be $45.3 million to $84.1
million. We had an environmental reserve of $45.3 million at September 30, 2004.
This reserve was established in anticipation of future remediation activities at
our  various  environmental  sites  and does not  factor in any  exposure  to us
arising from private tort  actions or  government  claims for damages  allegedly
associated  with  specific   environmental   conditions.   These   environmental
liabilities   will  continue  and  any  claims  with  respect  to  environmental
liabilities will not be extinguished pursuant to our plan of reorganization.  To
the extent that our  environmental  liabilities are greater than our reserves or
we are  unsuccessful  in recovering  anticipated  insurance  proceeds  under the
relevant  policies,  our results of operations and financial  condition could be
adversely affected.

        We  have  experienced   increased   interest  costs  and  other  adverse
consequences  as a result of our loss of  investment  grade  credit  ratings and
expect that our  non-investment  grade status will continue to adversely  affect
our cash flows.

        Our credit  ratings have been  downgraded  to  non-investment  grade and
could be  downgraded  further.  Our current  non-investment  grade  ratings have
increased our borrowing  costs,  both by increasing the actual interest rates we
will be  required  to pay  under  the new  credit  facility  and any debt in the
capital markets that we are able to issue. In addition, we have been required to
either prepay or post significant  amounts of collateral in the form of cash and
letters of credit to support our operations.  In addition,  our stated intention
to  resume  the  payment  of  quarterly  dividends  on  our  common  stock  upon
demonstrating the financial ability to do so may delay our ability to achieve an
investment grade rating for our debt securities. While we are working to resolve
many of the concerns cited by the credit rating  agencies,  we cannot assure you
that our credit ratings will improve in the foreseeable future.

        We have  recently  experienced  net  losses  and losses may occur in the
future.

        We  reported  a net loss of $17.4  million  for the  nine  months  ended
September 30, 2004, and have incurred  losses in prior  periods.  Our results of
operations will continue to be affected by events and conditions both within and
beyond our control,  including competition,  economic,  financial,  business and
other  conditions.  Therefore,  we cannot  assure you that we will not incur net
losses in the future.

        Our ability to access the capital markets is dependent on our ability to
obtain  certain  regulatory  approvals and the  covenants  contained in our debt
instruments.

        We  may  need  to  continue  to  support  working  capital  and  capital
expenditures, and to refinance maturing debt, through external financing. Often,
we must obtain federal and certain state regulatory approvals in order to borrow
money or to issue  securities and therefore will be dependent


                                       19

<PAGE>


on the federal and state  regulatory  authorities to issue favorable orders in a
timely manner to permit us to finance our operations.  We cannot assure you that
these  regulatory  entities  will issue such  orders or that such orders will be
issued on a timely basis. In addition, our new credit facility and the indenture
governing the notes restrict us from incurring additional indebtedness.

        We are subject to risks associated with a changing economic  environment
that could adversely affect our access to funding for our operations.

        Events   such  as  the   bankruptcy   of   several   large   energy  and
telecommunications  companies have adversely  affected the availability and cost
of capital for our business.  Such  economic  environment,  if sustained,  could
constrain the capital  available to our industry and would adversely  affect our
access to funding for our operations.

        If we are unable to  successfully  sell our noncore  assets or wind-down
operations of certain subsidiaries,  then the amount of proceeds we receive from
such sales could be significantly less than anticipated and adversely affect our
liquidity.

        As part of our efforts to restructure our business, we are attempting to
divest our  Montana  First  Megawatts  (MMI)  generation  project in Montana and
wind-down  operations  of  Netexit  and Blue Dot.  If the sales  prices for such
assets are less than anticipated,  or we encounter unexpected liabilities,  such
as costs  relating to the  wind-down of  operations,  including  termination  of
benefit  plans and payment of other  liabilities,  then our  liquidity  could be
adversely  affected.  Further,  we  cannot  assure  you  that we will be able to
consummate  such asset sales or that any asset sales will be at or greater  than
the current net book value of such assets.

        Our subsidiary,  Netexit, sold substantially all of its assets to Avaya,
Inc. In order to  wind-down  its affairs in an orderly  manner,  Netexit and its
subsidiaries  filed  for  bankruptcy  protection  on May 4,  2004.  Pending  the
resolution  of open  claims to Netexit  creditors,  the  proceeds  from the sale
remain at Netexit and  distributions  to NorthWestern  will be delayed until the
bankruptcy  proceedings are resolved. If we encounter unexpected claims or costs
relating  to  its   wind-down  of   operations,   our  ability  to  receive  any
distributions from Netexit and our liquidity could be adversely affected.

        Certain  subsidiaries may be subject to potential rescission rights held
by their minority shareholders.

        In connection  with  acquisitions  in prior years,  Netexit and Blue Dot
issued  shares of their capital  stock as part of the  consideration  offered to
owners of  various  companies  that they  acquired.  None of these  shares  were
registered  under the  Securities  Act in the belief that the  issuance of these
shares was exempt from the  registration  requirements of the Securities Act. It
is possible that the exemptions from  registration on which Netexit and Blue Dot
relied  were not  available,  and that  these  shares  may have  been  issued in
violation of the  Securities  Act. As a result,  the persons who received  these
shares  upon the sale of their  companies  to  Netexit  or Blue Dot may have the
right to seek  recovery  from Netexit or Blue Dot for damages as  prescribed  by
applicable securities laws.

        Our actual financial results may vary significantly from the projections
filed with the Bankruptcy Court.

        In  connection  with our plan of  reorganization,  we were  required  to
prepare projected  financial  information to demonstrate to the Bankruptcy Court
the  feasibility  of our plan of  reorganization  and our  ability  to  continue
operations upon our emergence from bankruptcy. The

                                       20

<PAGE>


projections  were  initially  filed with the  Bankruptcy  Court on May 17, 2004.
These  projections  are not  incorporated  by  reference.  At the time they were
prepared,   the  projections  reflected  numerous  assumptions   concerning  our
anticipated  future  performance  and with respect to prevailing and anticipated
market and economic  conditions that were and remain beyond our control and that
may not materialize.  Projections are inherently subject to uncertainties and to
a wide variety of significant  business,  economic and  competitive  risks.  Our
actual  results will vary from those  contemplated  by the  projections  and the
variations may be material.

        Our  pension  and other  post-retirement  benefit  costs are  subject to
fluctuation based on the performance of the financial markets.

        Our pension and other post-retirement  benefit plan assets are primarily
made up of equity and fixed income  investments.  Fluctuations  in actual equity
market  returns  as well as  changes  in  general  interest  rates may result in
increased or decreased pension and other post-retirement benefit costs in future
periods.  Likewise,  changes in assumptions regarding current discount rates and
expected rates of return on plan assets could also increase or decrease recorded
pension and other post-retirement benefit costs.


Use of Proceeds

               The Selling Securityholders will receive all of the proceeds from
sales of the shares,  and we will not receive any proceeds  from the sale of the
shares.


Selling Securityholders

               The Shares covered by this prospectus are being offered by or for
the accounts of the Selling Securityholders.  The table below sets forth (i) the
name of each such person who is known to us at this time, (ii) the nature of any
position,   office,   or  other   material   relationship   which  the   Selling
Securityholder has had within the past three years with the registrant or any of
its  predecessors  or  affiliates,  (iii) the amount of  securities of the class
owned by such security  holder prior to the offering,  and (iv) the amount to be
offered for the security holder's account.


--------------------- ------------------------------- -------- -----------------
                                                                  Amount which
                                                                    Selling
                                                                 Securityholder
                                                      Shares        may sell
                                                      owned        hereunder
  Name of Selling                                     before    (whether or not
   Securityholder     Relationship with NorthWestern   sale    currently vested)
--------------------- ------------------------------- -------- -----------------
Gary Drook                CEO & President, Director      0           102,960
------------------------- ------------------------------------ -----------------
Mike Hanson               COO                            0            35,720
------------------------- ------------------------------------ -----------------
Brian Bird                CFO                            0            21,440
------------------------- ------------------------------------ -----------------
Roger Schrum              VP-HR & Communications         0            10,800
------------------------- ------------------------------------ -----------------
Patrick Corcoran          VP-Regulatory Affairs          0             3,600
------------------------- ------------------------------------ -----------------
Alan Dietrich             VP-Corporate Secretary         0             3,450
------------------------- ------------------------------------ -----------------
Dave Gates                VP-Transmission Ops            0             3,550
------------------------- ------------------------------------ -----------------
Tom Knapp                 VP-Deputy Gen. Counsel         0             5,300
------------------------- ------------------------------------ -----------------
Curt Pohl                 VP-Distribution Ops            0             4,440
------------------------- ------------------------------------ -----------------
Bobbi Schroeppel          VP-Customer Care               0             3,450
------------------------- ------------------------------------ -----------------
Bart Thielbar             VP-Info Technology             0             4,440
------------------------- ------------------------------------ -----------------


                                       21

<PAGE>


------------------------- ------------------------------------ -----------------
Greg Trandem              VP-Support Services            0             4,370
------------------------- ------------------------------------ -----------------
George Boyles             Former Internal Audit &        0               800
                          Controls Officer
------------------------- ------------------------------------ -----------------
Paul Evans                Treasurer                      0             1,000
------------------------- ------------------------------------ -----------------
Kendall Kliewer           Controller                     0             1,600
------------------------- ------------------------------------ -----------------
Michael Nieman            Internal Audit & Controls      0             1,250
                          Officer
------------------------- ------------------------------------ -----------------
Chris Fonss               Dir-Tax                        0             1,570
------------------------- ------------------------------------ -----------------
Rick Burt                 Div Mgr                        0               550
------------------------- ------------------------------------ -----------------
John Carmody              Dir Dist Eng                   0               475
------------------------- ------------------------------------ -----------------
Mike Cashell              Dir Trans Mktg                 0               500
------------------------- ------------------------------------ -----------------
Jim Krusemark             Div Mgr                        0               550
------------------------- ------------------------------------ -----------------
Steve Lehner              Dir Dist Mgmt                  0               475
------------------------- ------------------------------------ -----------------
Bill Rhoads               GM, Dist Ops MT                0               550
------------------------- ------------------------------------ -----------------
Mike Schmit               Div Mgr                        0               550
------------------------- ------------------------------------ -----------------
Randy Sullivan            Div Mgr                        0               560
------------------------- ------------------------------------ -----------------
Mike Sydow                GM, Dist Ops SD/NE             0               725
------------------------- ------------------------------------ -----------------
John Waterman             Dir Gas Trans/Stor             0               560
------------------------- ------------------------------------ -----------------
Daniel Widhalm            Dir Elec Trans                 0               550
------------------------- ------------------------------------ -----------------
Ted Williams              Dir Trans Ops                  0               525
------------------------- ------------------------------------ -----------------
Len LeVeaux               Div Mgr                        0               445
------------------------- ------------------------------------ -----------------
Jason Merkel              Div Mgr                        0               445
------------------------- ------------------------------------ -----------------
Dennis Wagner             GM, Gen Trans Ops              0               515
------------------------- ------------------------------------ -----------------
Reed McKee                Dir Dist Systems               0               485
------------------------- ------------------------------------ -----------------
Michael Young             Sr. Atty                       0             1,900
------------------------- ------------------------------------ -----------------
Sally Neal                Dir Info Development           0               350
------------------------- ------------------------------------ -----------------
Donna Haeder              Dir Risk Mgmt                  0               360
------------------------- ------------------------------------ -----------------
Frank Spangler            Mgr Call Center                0               350
------------------------- ------------------------------------ -----------------
Rick Edwards              Mgr Cust & Sup Rel             0               350
------------------------- ------------------------------------ -----------------
Dan Daly                  Mgr Rev Collections            0               350
------------------------- ------------------------------------ -----------------
Katherine Curran          Mgr Sys Infra & Support        0               350
------------------------- ------------------------------------ -----------------
Margaret Lowney           Dir Comp/Payroll               0               500
------------------------- ------------------------------------ -----------------
Jana Quam                 Dir HR                         0               715
------------------------- ------------------------------------ -----------------
Claudia Rapkoch           Dir Comm                       0               350
------------------------- ------------------------------------ -----------------
Linda Wittrock            Dir Comm Affairs               0               350
------------------------- ------------------------------------ -----------------
Michael O'Neill           Dir Labor Relations            0               475
------------------------- ------------------------------------ -----------------
Tammy Lydic               Mgr Investor Communications    0               250
------------------------- ------------------------------------ -----------------
Barry O'Leary             Dir Safety/Health              0               500
------------------------- ------------------------------------ -----------------
Tom Loberg                Dir Process Improv             0               535
------------------------- ------------------------------------ -----------------
Bleau LaFave              Dir Support Services           0               515
------------------------- ------------------------------------ -----------------
Greg Gleason              Dir IT Infrastructure          0               490
------------------------- ------------------------------------ -----------------
Rick Van Vleet            Coordinator Lic./Leasing       0               325
------------------------- ------------------------------------ -----------------
Vernon Hogge              Dir. Telecom                   0               300
------------------------- ------------------------------------ -----------------


Plan of Distribution

        We are registering the shares on behalf of the Selling  Securityholders.
As  used  in  this  prospectus,  "Selling  Securityholders"  includes  permitted
transferees or other successors-in-interest selling shares received from a named
Selling  Securityholder  as a gift or other non-sale  related transfer after the
date of this prospectus.  We will pay all costs, expenses and fees in connection
with the  registration  of the shares  offered by this  prospectus.  The Selling
Securityholders will pay brokerage  commissions and similar selling expenses, if
any, attributable to the sale of shares. The


                                       22

<PAGE>


Selling  Securityholders  may sell shares from time to time in one or more types
of   transactions   on  any  available   securities   exchange,   in  negotiated
transactions,  through put or call options transactions  relating to the shares,
through  short  sales of shares or a  combination  of such  methods of sale,  at
market  prices  prevailing at the time of sale or at  negotiated  prices.  These
transactions   may  or  may  not  involve   brokers  or  dealers.   The  Selling
Securityholders  have  not  entered  into  any  agreements,   understandings  or
arrangements with any underwriters or  broker-dealers  regarding the sale of his
or her shares, and no underwriter or coordinating broker is acting in connection
with the proposed sale of shares by any Selling Securityholder.

        The Selling  Securityholders  may effect these  transactions  by selling
shares directly to purchasers or to or through broker-dealers,  which may act as
agents or principals.  These broker-dealers may receive compensation in the form
of discounts, concessions or commissions from the Selling Securityholders and/or
the  purchasers  of shares for whom the  broker-dealers  may act as agents or to
whom they sell as  principal,  or both (which  compensation  as to a  particular
broker-dealer might be in excess of customary commissions).

        The  Selling   Securityholders   and  any  broker-dealers  that  act  in
connection with the sale of shares might be deemed to be  "underwriters"  within
the meaning of Section 2(11) of the Securities Act of 1933, and any  commissions
received by these broker-dealers and any profit on the resale of the shares sold
by them while acting as principals might be deemed to be underwriting  discounts
or commissions under the Securities Act. The Selling  Securityholders  may agree
to  indemnify  any  agent,   dealer  or  broker-dealer   that   participates  in
transactions   involving  sales  of  the  shares  against  certain  liabilities,
including liabilities arising under the Securities Act.

        Because a Selling  Securityholder  may be deemed to be an  "underwriter"
within  the  meaning  of  Section  2(11)  of the  Securities  Act,  the  Selling
Securityholders  will be subject to the prospectus delivery  requirements of the
Securities  Act.  We  have  informed  the  Selling   Securityholders   that  the
anti-manipulative  provisions of Regulation M under the Securities  Exchange Act
of 1934 may apply to their sale of Shares in the market.

        The  Selling  Securityholders  also may  resell  all or a portion of the
shares  in open  market  transactions  in  reliance  upon  Rule  144  under  the
Securities  Act,  provided  the Selling  Securityholders  meet the  criteria and
conform to the  requirements of that Rule. This may occur without  reliance upon
this re-offer prospectus.

        The  Selling  Securityholders  might not sell all of the Shares  offered
hereby.  In  addition,  there may be  certain  contractual  restrictions  on the
ability  of  Selling  Securityholders  to  sell  any  or all  of  their  Shares.
NorthWestern has notified the Selling  Securityholders  of the need to deliver a
copy of this re-offer prospectus in connection with any sale of the Shares.


Legal Matters

        Certain  legal  matters have been passed upon for us by Paul,  Hastings,
Janofsky & Walker LLP,  Washington,  D.C. The validity of the Restricted  Shares
has been  passed  upon for us by Thomas  J.  Knapp,  Esq.,  in his  capacity  as
NorthWestern's General Counsel.


Experts

        The financial  statements and the related financial  statement  schedule
incorporated in this prospectus by reference from  NorthWestern's  Annual Report
on Form 10-K for the year ended December 31, 2003, have been audited by Deloitte
& Touche LLP, an independent registered public


                                       23

<PAGE>


accounting  firm, as stated in their  report,  which is  incorporated  herein by
reference   (which  report   expresses  an  unqualified   opinion  and  includes
explanatory  paragraphs relating to the bankruptcy proceedings described in Note
1, the going concern  uncertainty  described in Note 3, the change in methods of
accounting for asset retirement  obligations and company  obligated  mandatorily
redeemable  preferred  securities in 2003 described in Note 4, and the change in
the  method of  accounting  for  goodwill  and other  intangible  assets in 2002
described in Note 6) and has been so incorporated in reliance upon the report of
such firm given upon their authority as experts in accounting and auditing.

                      DEALER PROSPECTUS DELIVERY OBLIGATION

        Until April 28,  2005,  all dealers  that effect  transactions  in these
securities,  whether or not  participating in this offering,  may be required to
deliver a prospectus.  This is in addition to the dealer's obligation to deliver
a  prospectus  when  acting as  underwriters  and with  respect to their  unsold
allotments or subscriptions.


                                       24

<PAGE>


                                     PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT


Item 3.  Incorporation by Reference

        (i)     NorthWestern's  Annual  Report on Form 10-K for the fiscal  year
                ended  December  31,  2003,  as filed  with the SEC on March 15,
                2004;

        (ii)    The  Registrant's  Quarterly Report on Form 10-Q for the quarter
                ended  March 31,  2004 (as filed with the  Commission  on May 7,
                2004);

        (iii)   The  Registrant's  Quarterly Report on Form 10-Q for the quarter
                ended June 30, 2004 (as filed with the  Commission  on August 6,
                2004);

        (iv)    The  Registrant's  Quarterly Report on Form 10-Q for the quarter
                ended  September  30,  2004 (as  filed  with the  Commission  on
                November 8, 2004);

        (v)     The  description  of  NorthWestern's  common stock  contained in
                NorthWestern's  Registration  Statement on Form 8-A12G, as filed
                with the SEC on November 2, 2004,  and any  amendment  or report
                filed for the purpose of updating such description; and

        (vi)    The  Company's  Current  Reports  on  Forms  8-K  subsequent  to
                December 31, 2003, and up to and including the date of filing of
                this Registration Statement.

        You may contact us to request copies of these filings as follows:

        NorthWestern Corporation
        Attn: Thomas J. Knapp, Esq., General Counsel
        125 S. Dakota Avenue
        Sioux Falls, South Dakota  57104
        Telephone: (605) 978-2908.

        Any statement  contained herein or in a document  incorporated or deemed
incorporated  by reference  herein or therein  shall be deemed to be modified or
superceded for the purposes of this Registration  Statement to the extent that a
statement contained herein or therein modifies or supercedes such statement. Any
such  statement  shall not be deemed to  constitute a part of this  Registration
Statement or Prospectus except to the extent so modified or replaced.


Item 4. Description of Securities

This item is not applicable


Item 5.  Interests of Named Experts and Counsel

This item is not applicable.


Item 6. Indemnification of Directors and Officers

        The Articles of Incorporation and the By-Laws of the Registrant  provide
for indemnification by the Registrant of each of its directors and officers (and
of those  appointed by the Registrant to


                                       25

<PAGE>


serve as  directors  or  officers  of other  entities),  to the  fullest  extent
permitted by Delaware  law, for  liability  (including,  for example,  liability
arising under the Securities Act of 1933) of such director or officer arising by
reason of his or her status as a director  or officer of the  Registrant  (or of
such other entity,  as the case may be),  provided that he or she has acted in a
good faith and reasonable  belief that he or she acted in the Registrant's  best
interests.  The Registrant will also advance expenses prior to final disposition
of an action,  suit or  proceeding  upon the  receipt of an  undertaking  by the
director  or  officer to repay such  amount if such  director  or officer is not
entitled to indemnification.

        The  directors and officers of the  Registrant  are covered by insurance
policies indemnifying against certain liabilities, including certain liabilities
arising under the  Securities  Act of 1933, as amended (the  "Securities  Act"),
which might be incurred by them in such capacities and against which they cannot
be indemnified by the Registrant.


Item 7. Exemption from Registration Claimed

        On November 1, 2004, the  Registrant  emerged from Chapter 11 bankruptcy
protection. The Registrant issued 228,320 shares in the form of restricted stock
pursuant to the Plan in recognition of the services of certain key  NorthWestern
personnel.  If any of these  grants  of  restricted  stock  are  forfeited,  the
forfeited  shares  shall not be  available  to be  granted  under the Plan.  The
issuance  of shares of Common  Stock  under the Plan was made in  reliance  upon
Section 1145 of the  Bankruptcy  Code,  which  exempts the original  issuance of
securities under a plan of reorganization from registration under the Securities
Act and applicable state law.


Item 8. Exhibits

Exhibit
No.             Description
---             -----------

3.1             NorthWestern   Corporation   2004  Special   Recognition   Grant
                Restricted Stock Plan.*

3.2             Amended   and   Restated   Certificate   of   Incorporation   of
                NorthWestern Corporation, dated October 15, 2004.*

3.3             Amended  and  Restated  Bylaws of  NorthWestern  Corporation,  a
                Delaware Corporation, dated October 15, 2004.*

4.1             Specimen Share Certificate.*

5.1             Opinion of NorthWestern Corporation's General Counsel (Thomas J.
                Knapp,  Esq.)  regarding the legality of the  restricted  Common
                Shares being registered.*

23.1            Consent of Deloitte & Touche LLP.*

23.2            Consent of NorthWestern Corporation (included in Exhibit 5.1).*

24.1            Power of Attorney (included on signature page hereto).*

99.1            Form  of  Award  under  the  2004  Special   Recognition   Grant
                Restricted Stock Plan.*

* Filed Herewith


                                       26

<PAGE>


Item 9. Undertakings

(a)     NorthWestern hereby undertakes:

        (1)     To file,  during any  period in which  offers or sales are being
                made, a post-effective amendment to this registration statement:

                (i)     To include any prospectus  required by Section 10(a) (3)
                        of the Securities Act of 1933;

                (ii)    To reflect in the prospectus any facts or events arising
                        after the effective date of the  registration  statement
                        (or the most recent  post-effective  amendment  thereof)
                        which,  individually  or in the  aggregate,  represent a
                        fundamental  change in the  information set forth in the
                        registration  statement.  Notwithstanding the foregoing,
                        any increase or decrease in volume of securities offered
                        (if the total dollar value of  securities  offered would
                        not exceed that which was  registered) and any deviation
                        from  the  low or  high  end of  the  estimated  maximum
                        offering   range  may  be   reflected  in  the  form  of
                        prospectus  filed with the SEC  pursuant  to Rule 424(b)
                        if, in the  aggregate,  the  changes in volume and price
                        represent  no  more  than  a 20  percent  change  in the
                        maximum  aggregate  offering  price  set  forth  in  the
                        "Calculation of Registration Fee" table in the effective
                        registration statement; and

                (iii)   To include any material  information with respect to the
                        plan of  distribution  not  previously  disclosed in the
                        registration  statement or any  material  change to such
                        information in the registration statement;

Provided,  however, that paragraphs (a) (1) (i) and (a) (1) (ii) do not apply if
the information  required to be included in a post-effective  amendment by those
paragraphs  is contained in periodic  reports filed with or furnished to the SEC
by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference in the registration statement.

        (2)     That,  for the purpose of  determining  any liability  under the
                Securities Act of 1933, each such post-effective amendment shall
                be deemed to be a new  registration  statement  relating  to the
                securities offered therein,  and the offering of such securities
                at that  time  shall  be  deemed  to be the  initial  bona  fide
                offering thereof.

        (3)     To  remove  from  registration  by  means  of  a  post-effective
                amendment any of the securities  being  registered  which remain
                unsold at the termination of the offering.

(b)     The  undersigned  registrant  hereby  undertakes  that,  for purposes of
        determining  any liability under the Securities Act of 1933, each filing
        of the  registrant's  annual report pursuant to Section 13(a) or Section
        15(d) of the  Securities  Exchange Act of 1934 that is  incorporated  by
        reference  in the  registration  statement  shall be  deemed to be a new
        registration  statement relating to the securities offered therein,  and
        the offering of such  securities  at that time shall be deemed to be the
        initial bona fide offering thereof.

(c)     The  undersigned   Registrant  hereby   undertakes,   that,  insofar  as
        indemnification  for liabilities arising under the Securities Act may be
        permitted  to  directors,   officers  and  controlling  persons  of  the
        Registrant  pursuant to the  foregoing  provisions,  or  otherwise,  the
        Registrant has been advised that in the opinion of the  Commission  such
        indemnification  is against


                                       27

<PAGE>


        public  policy as expressed  in the  Securities  Act and is,  therefore,
        unenforceable.  In the event  that a claim for  indemnification  against
        such  liabilities  (other than the payment by the Registrant of expenses
        incurred or paid by a  director,  officer or  controlling  person of the
        Registrant in the successful defense of any action,  suit or proceeding)
        is  asserted  by  such  director,   officer  or  controlling  person  in
        connection with the securities  being  registered,  the Registrant will,
        unless in the  opinion of its  counsel  the  matter has been  settled by
        controlling precedent, submit to a court of appropriate jurisdiction the
        question whether such  indemnification by it is against public policy as
        expressed  in the  Securities  Act and  will be  governed  by the  final
        adjudication of such issue.


                                       28

<PAGE>


                                   SIGNATURES

        Pursuant to the  requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the  requirements  for  filing  on  Form  S-8 and has  duly  caused  this
Registration Statement to be signed on its behalf by the undersigned,  thereunto
duly authorized, in the City of Sioux Falls, State of South Dakota, on this 28th
day of January, 2005.

                                      NorthWestern Corporation
                                      By: /s/ GARY G. DROOK
                                          -----------------
                                          Name:  Gary G. Drook
                                          President and Chief Executive Officer




                                POWER OF ATTORNEY

        Each  person  whose  signature  appears  below  hereby  constitutes  and
appoints  Gary G.  Drook the true and lawful  attorney-in-fact  and agent of the
undersigned, with full power of substitution and re-substitution, for and in the
name, place and stead of the undersigned, in any and all capacities, to sign any
and all amendments  (including  post-effective  amendments) to this Registration
Statement  (or any  registration  statement  for the same offering that is to be
effective upon filing  pursuant to Rule 462(b) under the Securities Act of 1933)
and to cause the same to be filed, with all exhibits thereto and other documents
in connection  therewith,  with the Securities and Exchange  Commission,  hereby
granting to said  attorney-in-fact  and agent full power and authority to do and
perform  each and every act and thing  whatsoever  requisite  or desirable to be
done in and about the  premises,  as fully to all  intents  and  purposes as the
undersigned  might or could do in person,  hereby  ratifying and  confirming all
acts and things that said  attorney-in-fact  and agent, or his  substitute,  may
lawfully do or cause to be done by virtue hereof.

        Pursuant  to the  requirements  of the  Securities  Act  of  1933,  this
Registration  Statement  has been signed below by the  following  persons in the
capacities and on the dates indicated.


Signature                 Title                           Date
---------                 -----                           ----

/s/ GARY G. DROOK         President and Chief Executive   January 28, 2005
-----------------         Officer, Director
Gary G. Drook

/s/ BRIAN B. BIRD         Chief Financial Officer         January 28, 2005
-----------------
Brian B. Bird

/s/ KENDALL G. KLIEWER    Controller                      January 28, 2005
----------------------
Kendall G. Kliewer

/s/ E. LINN DRAPER, JR.   Chairman of the Board of        January 28, 2005
----------------------    Directors
E. Linn Draper, Jr.

/s/ STEPHEN P. ADIK       Director                        January 28, 2005
-------------------
Stephen P. Adik

/s/ JON S. FOSSEL         Director                        January 28, 2005
-----------------


                                       29

<PAGE>


Jon S. Fossel

/s/ JULIA L. JOHNSON      Director                        January 28, 2005
--------------------
Julia L. Johnson

/s/ CORBIN A. MCNEILL JR  Director                        January 28, 2005
---------------------
Corbin A. McNeill, Jr.

/s/ PHILIP L. MASLOWE     Director                        January 28, 2005
---------------------
Philip L. Maslowe



                                INDEX TO EXHIBITS


Exhibit
No.             Description
---             -----------

3.1             NorthWestern   Corporation   2004  Special   Recognition   Grant
                Restricted Stock Plan.*

3.2             Amended   and   Restated   Certificate   of   Incorporation   of
                NorthWestern Corporation, dated October 15, 2004.*

3.3             Amended  and  Restated  Bylaws of  NorthWestern  Corporation,  a
                Delaware Corporation, dated October 15, 2004.*

4.1             Specimen Share Certificate.*

5.1             Opinion of NorthWestern Corporation's General Counsel (Thomas J.
                Knapp,  Esq.)  regarding the legality of the  restricted  Common
                Shares being registered.*

23.1            Consent of Deloitte & Touche LLP.*

23.2            Consent of NorthWestern Corporation (included in Exhibit 5.1).*

24.1            Power of Attorney (included on signature page hereto).*

99.1            Form  of  Award  under  the  2004  Special   Recognition   Grant
                Restricted Stock Plan.*

* Filed Herewith


                                       30

<PAGE>
[{"type": "S-8", "sequence": "1", "filename": "news8.txt", "secsgml_size_bytes": 105606}]
{"company-data": {"conformed-name": "NORTHWESTERN CORP", "cik": "0000073088", "assigned-sic": "4931", "irs-number": "460172280", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-122428", "film-number": "05562939"}, "business-address": {"street1": "125 S DAKOTA AVENUE", "street2": "SUITE 1100", "city": "SIOUX", "state": "SD", "zip": "57104", "phone": "6059782908"}, "mail-address": {"street1": "125 S DAKOTA AVENUE", "street2": "SUITE 1100", "city": "SIOUX", "state": "SD", "zip": "57104"}, "former-company": {"former-conformed-name": "NORTHWESTERN PUBLIC SERVICE CO", "date-changed": "19920703"}}
As filed with the Securities and Exchange Commission on January 31, 2005.
                           Registration No. 333 -____

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM S-8
                             REGISTRATION STATEMENT
                                      under
                           The Securities Act of 1933

                            NORTHWESTERN CORPORATION

                                      d/b/a

                              NORTHWESTERN ENERGY
                           [NORTHWESTERN ENERGY LOGO]
               (Exact name of issuer as specified in its charter)

        Delaware                                         46-0172280
(State of Incorporation)                    (IRS Employer Identification Number)

                              125 S. Dakota Avenue
                         Sioux Falls, South Dakota 57104
                    (Address of Principal Executive Offices)

  NorthWestern Corporation 2004 Special Recognition Grant Restricted Stock Plan
                            (Full title of the Plan)

                                 Thomas J. Knapp
                                 General Counsel
                            NorthWestern Corporation
                              125 S. Dakota Avenue
                         Sioux Falls, South Dakota 57104
                                 (605) 978-2930
            (Name, address and telephone number of agent for service)
CALCULATION OF REGISTRATION FEE
Title of securities       Amount to be       Proposed maximum      Proposed max.      Amount of
    to be registered         registered       offering price per       aggregate      registration
 Shares of Common Stock      228,320 (1)            share           offering price         fee
                                                  $28.09 (2)         $6,413,508.80       $754.87
(1) Represents shares of common stock reserved for grants under the NorthWestern
Corporation  2004 Special  Recognition  Grant Restricted Stock Plan which may be
issued  under that plan  subject  to a grant  agreement  evidencing  an award of
restricted stock to NorthWestern Corporation employees.

                                       1
(2)  Estimated  solely  for the  purpose of  calculating  the  registration  fee
pursuant to Rule 457(h),  based on the average high and low prices of the common
stock as quoted on the National  Association  of  Securities  Dealers  Automated
Quotation  (NASDAQ)  National  Market on January 24, 2005,  which is within five
business days prior to the date of filing of this Registration Statement.

                                       2
PART I

              INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

                                Explanatory Note

        NorthWestern Corporation ("NorthWestern") has prepared this Registration
Statement in accordance  with the  requirements of Form S-8 under the Securities
Act of 1933, as amended (the  "Securities  Act").  This  Registration  Statement
registers  228,320 shares of the Company's common stock which may be issued from
time to time to participants  under the  NorthWestern  Corporation  2004 Special
Recognition  Grant  Restricted  Stock  Plan  ("Plan").  The Plan was  created in
connection with NorthWestern's  emergence from Chapter 11 Bankruptcy on November
1, 2004.

        Further,  this  Registration  Statement  is intended to register  common
shares for re-offer  and/or resale by the  individuals  listed under the Selling
Securityholder section of this re-offer prospectus ("Selling  Securityholders").
All of the common shares  registered hereby may be issued under the Plan, which,
if issued to the Selling Securityholders,  shall constitute "control securities"
within the meaning of Instruction C of the General Instructions to Form S-8.

        This Registration  Statement contains two parts. The first part contains
a  re-offer  prospectus  prepared  in  accordance  with  Part I of Form  S-3 (in
accordance  with  Instruction  C of  the  General  Instructions  to  Form  S-8),
including a re-offer  prospectus that may be used for  re-offerings and re-sales
of common shares acquired by the Selling  Securityholders  listed on pages 20-21
of   this   Registration    Statement/re-offer    prospectus.    These   Selling
Securityholders  are  affiliates of  NorthWestern  as defined in Rule 405 of the
Securities   Act.  The  second  part  contains   information   required  in  the
Registration Statement pursuant to Part II of Form S-8.

        The documents  incorporated by reference in this Registration  Statement
pursuant to Item 3 of Part II of this Form S-8,  taken  together,  constitute  a
prospectus that meets the requirements of Section 10(a) of the Securities Act.

                                       3
NORTHWESTERN ENERGY
                           [NORTHWESTERN ENERGY LOGO]

                               RE-OFFER PROSPECTUS

                            NorthWestern Corporation
                         228,320 Shares of Common Stock
        We are NorthWestern  Corporation  ("NorthWestern"  or the "Company"),  a
Delaware  Corporation with its principal  offices in Sioux Falls,  South Dakota.
The shares of our common stock which are the subject of this re-offer prospectus
may be offered and sold to the public by the selling security holders  ("Selling
Securityholders")  identified in this document,  each of whom is deemed to be an
"affiliate"  under Securities and Exchange  Commission Rule 144. These shares of
common stock ("Shares") will be issued to the Selling  Securityholders  pursuant
to the NorthWestern  Corporation 2004 Special Recognition Grant Restricted Stock
Plan ("Plan").  The Selling  Securityholders  may sell their Shares  directly or
indirectly in one or more  transactions on any stock exchange or stock market on
which the  Shares  may be listed at the time of sale,  in  privately  negotiated
transactions,  or through a combination of methods.  These sales may be at fixed
or negotiated  prices,  at market  prices  prevailing at the time of sale, or at
prices related to such prevailing market prices.

        NorthWestern's Shares are listed on the NASDAQ exchange under the symbol
NWEC.  On January 24,  2005,  the last  reported  sale price for  NorthWestern's
shares was $28.00 per share.

        This  re-offer   prospectus   has  been  prepared  for  the  purpose  of
registering the Shares which are the subject of this re-offer  prospectus  under
the  Securities  Act,  and  thereby  to allow for  future  sales by the  Selling
Securityholders to the public. The Selling  Shareholders may sell Shares through
agents,  brokers,  dealers or  directly  to the  public.  Brokers or dealers may
receive  compensation in the form of commissions,  discounts or concessions from
the Selling  Securityholders  and/or  purchasers of the Shares (or both),  which
compensation  may be in excess of typical  commissions.  In connection with such
sales, the Selling Securityholders and any participating broker or dealer may be
deemed to be  "underwriters"  within the  meaning  of the  Securities  Act,  and
commission  and  proceeds  from  the  sale of the  Shares  may be  deemed  to be
underwriting  discounts and commissions  under the Securities Act.  NorthWestern
will receive no portion of the  proceeds  form the sale of Shares by the Selling
Securityholders.

        This investment  involves  significant risks.  Please see "Risk Factors"
beginning on page 10 of this Registration Statement/re-offer prospectus.

        Neither the  Securities  and Exchange  Commission  ("SEC") nor any state
securities  commission  has  approved  or  disapproved  of these  securities  or
determined  whether  this  re-offer  prospectus  is truthful and  complete.  Any
representation to the contrary is a criminal offense.  This re-offer  prospectus
does not  constitute  and offer to sell our Shares in any state with  respect to
any person to whom it is unlawful to make such an offer in such state.

        The date of this re-offer prospectus is January 26, 2005.

                                       4
You should rely only on the  information  contained or  incorporated  by
reference in this re-offer  prospectus.  We have not authorized any other person
to provide you with  information  different from or additional to that contained
or  incorporated  by  reference  in  this  re-offer   prospectus.   The  Selling
Securityholders  are offering to sell common shares only in jurisdictions  where
offers and sales are permitted. You should assume that the information appearing
in this re-offer  prospectus and the documents  incorporated by reference herein
and  therein is  accurate  only as of its  respective  date or as of other dates
which are  specified in these  documents.  Our  business,  financial  condition,
results of operations and prospects may have changed since these dates.

Additional Information

        We have filed with the SEC a  registration  statement  on Form S-8 under
the Securities Act to register the common shares offered  hereby.  This re-offer
prospectus is part of the registration statement.  This re-offer prospectus does
not contain all the information contained in the registration  statement because
we have omitted certain parts of the  registration  statement in accordance with
the rules and  regulations  of the SEC.  Statements  contained in this  re-offer
prospectus regarding the contents of any contract or any other document to which
reference is made are not  necessarily  complete,  and, in each instance where a
copy of such  contract  or other  document  has been  filed as an exhibit to the
registration  statement,  reference is made to the copy so filed, each statement
is qualified in all respects by such reference.

        For further  information,  we refer you to the  registration  statement,
which you may read and copy at the public reference facilities maintained by the
Commission at Judiciary  Plaza, 450 Fifth Street,  N.W., Room 1024,  Washington,
D.C. 20549 and at the Commission's  Regional Offices at Citicorp Center,  500 W.
Madison Street, Suite 1400, Chicago, Illinois 60661-2511.  You may obtain copies
for a fee from the Public  Reference  Section of the Commission at its principal
office in  Washington,  D.C. You may call the Commission at  1-800-SEC-0330  for
further information about the public reference rooms. The Commission maintains a
Web site that  contains  reports,  proxy and  information  statements  and other
information regarding NorthWestern.  You may access the Commission's Web site at
http://www.sec.gov.

Incorporation of Certain Documents by Reference

        The Commission  allows us to  "incorporate by reference" the information
we file with them, which means that we can disclose important information to you
by referring you to those documents.  The information  incorporated by reference
is considered to be part of this re-offer  prospectus,  and information  that we
file later with the  Commission  will  automatically  update and supersede  this
information.  We  incorporate  by reference the  documents  listed below and any
future filings we will make with the Commission  under Section 13(a),  13(c), 14
or 15(d) of the Securities Exchange Act of 1934:

        (i)     NorthWestern's  Annual  Report on Form 10-K for the fiscal  year
                ended  December  31,  2003,  as filed  with the SEC on March 15,
                2004;

        (ii)    The  Registrant's  Quarterly Report on Form 10-Q for the quarter
                ended  March 31,  2004 (as filed with the  Commission  on May 7,
                2004);

        (iii)   The  Registrant's  Quarterly Report on Form 10-Q for the quarter
                ended June 30, 2004 (as filed with the  Commission  on August 6,
                2004);

                                       5
(iv)    The  Registrant's  Quarterly Report on Form 10-Q for the quarter
                ended  September  30,  2004 (as  filed  with the  Commission  on
                November 8, 2004);

        (v)     The  description  of  NorthWestern's  common stock  contained in
                NorthWestern's  Registration  Statement on Form 8-A12G, as filed
                with the SEC on November 2, 2004,  and any  amendment  or report
                filed for the purpose of updating such description; and

        (vi)    The  Company's  Current  Reports  on  Forms  8-K  subsequent  to
                December 31, 2003, and up to and including the date of filing of
                this Registration Statement.

        You may request a copy of these  filings (not  including the exhibits to
such documents unless the exhibits are specifically incorporated by reference in
the information contained in this re-offer  prospectus),  at no cost, by writing
or telephoning us at the following address:

        NorthWestern Corporation
        Attn: Thomas J. Knapp, Esq., General Counsel
        125 S. Dakota Avenue
        Sioux Falls, South Dakota  57104
        Telephone: (605) 978-2908.

        Any documents  subsequently  filed by NorthWestern under Sections 13(a),
13(c), 14 or 15(d) of the Securities  Exchange Act of 1934,  prior to the filing
of a post effective  amendment  that indicates that all securities  offered have
been sold or which  deregisters all securities then remaining  unsold,  shall be
deemed to be  incorporated  herein by reference in this  Registration  Statement
from that date filed.

The Company(1)

        NorthWestern Corporation,  doing business as NorthWestern Energy, is one
of the largest providers of electricity and natural gas in the Upper Midwest and
Northwest,  serving approximately 608,000 customers in Montana, South Dakota and
Nebraska as of September 30, 2004. We have generated and distributed electricity
in South Dakota and  distributed  natural gas in South Dakota and Nebraska since
1923. In addition, on February 15, 2002, we acquired electricity and natural gas
transmission and distribution  assets and natural gas storage assets in Montana.
We had consolidated operating income from continuing operations of $78.7 million
for the year ended  December  31, 2003,  compared  with  consolidated  operating
income from  continuing  operations of $75.0 million for the year ended December
31, 2002. Our  consolidated  revenues and gross margin for the nine months ended
September 30, 2004 were $818.5  million and $348.8  million,  respectively.  Our
utility  operations  are  regulated  primarily  by the  Montana  Public  Service
Commission,  or MPSC, the Nebraska Public Service Commission, or NPSC, the South
Dakota Public Utilities Commission,  or SDPUC, and the Federal Energy Regulatory
Commission, or FERC. We operate our business in three reporting segments:

        o       electric utility operations;
        o       natural gas utility operations; and

__________________________________
(1) Adapted from most recent 10-Q and 10-K

                                       6
o       all other, which primarily  consists of our other  miscellaneous
                service activities that are not included in the other identified
                segments,  together  with the  unallocated  corporate  costs and
                investments, and any eliminating amounts.

Electric Operations

        Montana

        Our Montana electric utility business consists of an extensive  electric
transmission  and  distribution  network.  Our Montana service  territory covers
approximately 107,600 square miles, representing  approximately 73% of Montana's
land area, as of December 31, 2003,  and includes  approximately  786,000 people
according to the 2000 census. As of December 31, 2003, we delivered  electricity
to  approximately  305,000  customers in 191 communities  and their  surrounding
rural  areas in Montana,  including  Yellowstone  National  Park.  By  category,
residential, commercial and industrial, wholesale, and other sales accounted for
approximately   28%,  36%,  12%,  and  24%  of  our  Montana  electric  revenue,
respectively, for the year ended December 31, 2003. We also transmit electricity
for  non-regulated  entities owning generation  facilities,  other utilities and
power marketers serving the Montana electricity market. We do not currently face
material  competition in the transmission and distribution of electricity within
our Montana  service  territory.  Under Montana law, we are obligated to provide
default supply  electric  service in Montana to customers who have not chosen or
are not  allowed  to  choose  an  alternative  electricity  supplier.  We own no
material generation assets in Montana.  Accordingly,  we purchase  substantially
all of our Montana  capacity  and energy  requirements  for default  supply from
third parties.  Those purchases are recovered through a monthly electricity cost
tracking process which is reviewed and adjusted by the MPSC.

        South Dakota

        Our South  Dakota  electric  utility  business  operates  as a regulated
vertically integrated generation, transmission and distribution utility. We have
the exclusive right to serve an assigned  service area in South Dakota comprised
of 25  counties  with a  combined  population  of  approximately  99,500  people
according to the 2000 census. We provided retail electricity to more than 57,600
customers  in 108  communities  in South  Dakota as of  December  31,  2003.  By
category,  residential,  commercial and industrial,  wholesale,  and other sales
accounted for  approximately  38%,  50%, 9% and 3% of our South Dakota  electric
utility revenue,  respectively, for the year ended December 31, 2003. Currently,
we serve these customers  principally from generation  capacity obtained through
our undivided  interests in three jointly owned electric  generation  plants and
other  peaking  facilities  that provide us with 312  megawatts of  demonstrated
capacity.  Direct  competition  does not presently exist within our South Dakota
service territory for the supply and delivery of electricity.

Natural Gas Operations

        Montana

        Our  Montana  natural  gas  business  distributed  natural gas to nearly
163,000 customers located in 109 Montana communities as of December 31, 2003. We
also served several  smaller  distribution  companies  that provided  service to
approximately  28,000  customers  as of December  31,  2003.  At that date,  our
natural  gas  distribution  system  consisted  of  approximately  3,500 miles of
underground distribution pipelines. We also transmit natural gas in Montana from
production  receipt  points and storage  facilities to  distribution  points and
other nonaffiliated  transmission  systems. In the year ended December 31, 2003,
we transported  natural gas volumes of

                                       7
approximately   55  billion  cubic  feet,  with  peak  capacity  in  Montana  of
approximately  300  million  cubic feet per day. As of December  31,  2003,  the
natural gas  transmission  system consisted of more than 2,000 miles of pipeline
and served more than 130 city gate stations.  We currently own and operate three
working natural gas storage fields in Montana with aggregate storage capacity of
approximately 16.2 billion cubic feet, of which 9 billion cubic feet is reserved
for our regulated utility  business,  and maximum aggregate working gas capacity
of approximately 185 million cubic feet per day.

        Montana's  Natural Gas Utility  Restructuring  and Customer  Choice Act,
which was passed in 1997,  provides  that a natural gas utility may  voluntarily
offer its  customers  their  choice of natural gas  suppliers  and provide  open
access  in  Montana.   Although  we  have  opened  access  to  our  Montana  gas
transmission and distribution  systems and gas supply choice is available to all
of our natural gas  customers  in Montana,  we  currently  do not face  material
competition in the  transmission  and distribution of natural gas in our Montana
service  areas.  We also  provide  default  supply  natural  gas  service  under
cost-based  rates to customers in our Montana service  territories that have not
chosen other suppliers.

        South Dakota and Nebraska

        Our South Dakota and Nebraska natural gas business  provided natural gas
to  approximately  82,000  customers  in 59 South  Dakota  communities  and four
Nebraska communities as of December 31, 2003.

        At that date, we had approximately 2,100 miles of distribution gas mains
in South  Dakota  and  Nebraska.  We also  transport  natural  gas for other gas
suppliers  and  marketers in South Dakota and  Nebraska,  and in South Dakota we
provide  natural  gas  sales to a number  of large  volume  customers  delivered
through the distribution system of an unaffiliated  natural gas utility company.
In addition,  competition  currently  exists for commodity sales to large volume
customers  and for  delivery  in the form of  system  bypass,  alternative  fuel
sources such as propane and fuel oil, and, in some cases,  duplicate  providers.
We do  not  face  material  competition  from  alternative  natural  gas  supply
companies in the communities in which we serve in South Dakota and Nebraska.

Strategy

        We are focused on creating  value for our  investors,  customers and the
communities we serve by becoming the premier  regulated  energy delivery company
in the northwest quadrant of the U.S. To achieve this, we intend to focus on the
following strategies:

        o Maximize the value of our regulated utility business. For more than 80
years, we have provided  customers with reliable,  cost-competitive  energy with
industry-leading customer service. Today, we are a focused utility business with
an  experienced  management  team and a  motivated  workforce.  We will  work to
further improve our reliability and customer service levels,  thereby  enhancing
our relationship with customers and regulators.  We believe that ongoing service
improvement and increasing levels of customer  satisfaction will build value for
all our stakeholders.

        o Pursue stable cash flow and earnings  growth.  Our financial plans and
fiscal  policies  have been  designed  to be  consistent  with the  conservative
business profile of a regulated utility.  In the near-term,  we expect that cash
flow and  earnings  will be linked to organic  growth  derived from our existing
transmission  and  distribution  network.  Over the  next  five  years,  we have
targeted our gross margin to grow by 1.2%  annually and due to annual  projected
cost reductions,  we have targeted  operating income to grow by 3% annually.  In
the longer term, we may use free cash flow to expand

                                       8
our existing infrastructure or to pursue other regulated electric or natural gas
utility acquisitions.  We intend to pursue growth activities with the purpose of
enhancing our core regulated utility operations.

        o Regain an investment grade rating.  After  consummation of our plan of
reorganization  and  completion  of our exit  financing,  we expect that we will
exhibit credit  characteristics  closely resembling those of an investment grade
regulated  electric and gas utility.  We intend to manage our free cash flow and
operations  in order to further  reduce debt and improve our balance  sheet,  as
well as associated  credit  metrics,  with the goal of regaining our  investment
grade ratings as quickly as possible.

        o Restore  our  credibility  in the  financial  markets.  In addition to
working to stabilize  cash flow and regain an investment  grade  rating,  we are
taking steps to build our  credibility in the financial  markets.  First, we are
concentrating  our efforts on meeting our operating plan and financial  targets.
Second, we intend to pay dividends on our common stock once we have demonstrated
the financial ability to do so. Finally,  we will continue to develop strong and
sustainable internal controls that emphasize accuracy and transparency.

        o Continue to improve our relationship with regulators. We will continue
to work diligently to improve the consistency and  predictability  of regulatory
decisions  affecting our company. To that end, we are pursuing the resolution of
all major  pending  regulatory  proceedings  and the  establishment  of rules in
Montana  to  guide  the  procurement  of  natural  gas and  electricity  for our
customers  in the future.  Additionally,  we will  continue to work closely with
regulatory  authorities to keep them apprised of  developments  and  proactively
address any potential concerns.

        o Retain and motivate our  employees.  We believe that our employees are
critical  to our  ability to execute on our  strategy  of  maintaining  our high
standards  for the  reliable  delivery of  electricity  and natural  gas. We are
working to retain our  experienced  employees by developing  programs to enhance
job  satisfaction  and a  compensation  program to attract,  motivate and retain
employees that perform critical functions.

Competitive Strengths

        We believe  that we are  well-positioned  to  strengthen  our  business,
improve our balance  sheet and credit  ratings,  and increase our  profitability
because of the following:

        o We are focused on our  regulated gas and electric  businesses.  We are
focused  on  operating  our  electric  and  gas  transmission  and  distribution
operations,  the vast majority of which are  regulated.  Since filing for relief
under the provisions of Chapter 11 of the Bankruptcy  Code in September 2003, we
have sold substantially all of our major non-core businesses, including Netexit,
formerly  Expanets,  and Blue Dot.  Before  our  bankruptcy  proceeding,  we had
divested  ourselves of the CornerStone  propane business.  Our management has no
plans to reinvest our utility cash flow into unregulated businesses that are not
utility  related,  and we are limited in our ability to do so by our recent MPSC
settlement.  As  a  result,  we  expect  our  regulated  businesses  to  provide
substantially all of our consolidated operating income.

        o We have  significantly  improved our balance sheet and cash flow. Upon
the consummation of our plan of reorganization,  our overall debt was reduced by
more  than  $1.3  billion   after  giving  pro  forma  effect  to  the  plan  of
reorganization  and our recently  announced debt  offering,  with no significant
debt  maturities  until December  2006. By divesting our non-core  subsidiaries,
reducing  interest  expense and improving the terms of our  commercial  dealings
with vendors, we also have

                                       9
significantly  improved our operating cash flow related to continuing operations
from an outflow of $103.3 million for the nine months ended  September 30, 2003,
to an inflow of $160.1 million for the nine months ended  September 30, 2004. We
believe that our improved  debt  maturity  profile and cash flow will provide us
with  increased  operating and financial  flexibility to execute on our business
plan and increase future profits.  We will strive to regain our investment grade
debt rating as we further improve our balance sheet.

        o We own and operate  reliable  electricity and natural gas distribution
and supply  businesses.  Our Montana and South Dakota  utility  operations  have
strong  reliability  averages relative to the industry sector as a whole. In the
year ended December 31, 2003, our average  customer outages in Montana and South
Dakota  lasted 87.29  minutes and 63.32  minutes,  respectively,  compared to an
industrywide  average  of  100.85  minutes,  as  reported  by the  Institute  of
Electrical  and  Electronics  Engineers in their 2003  Distribution  Reliability
Benchmarking  study.  Also,  in the year ended  December 31,  2003,  our average
system  interruption in Montana and South Dakota lasted 103.96 minutes and 52.96
minutes, respectively, compared to an industrywide average of 135.00 minutes, as
reported in the benchmarking study.

        o Our Montana and South Dakota utility  operations are cost competitive.
Our  Montana and South  Dakota  utility  operations  are cost  competitive.  Our
Montana and South Dakota monthly bundled  electric rates as of January 2004 were
$59.90 and $67.54 per  megawatt  hour,  respectively,  compared to the  national
average  of  $67.29  per  megawatt  hour,  as  reported  by our  industry  trade
organization,  the Edison  Electric  Institute  in their  January 2004 Bills and
Average Rates Report. Our Montana and South Dakota natural gas rates as of April
2004 were $8.48 and $8.41, respectively, per dekatherm, compared to the national
average of $10.54 per dekatherm,  as reported by the United States Department of
Energy in its April 2004 U.S. Natural Gas Sector Report.

        o We have an  experienced  management  team  who  has  demonstrated  its
ability to achieve our strategy and a new board of directors  whose members have
substantial  experience in the utility  business.  Our current senior management
team  has  implemented  a  business  plan  that we  believe  will  enable  us to
successfully  emerge from  bankruptcy  and  continue  to improve  our  long-term
financial  viability.  Our  senior  management  team  is  supported  by a  solid
foundation  of key  management  employees  with  substantial  experience  in the
operation of a regulated utility business.  In addition,  on August 10, 2004, we
announced the  appointment of a new  seven-member  board of directors  effective
upon our  emergence  from  bankruptcy.  Our new board  includes six  independent
members, many of whom have substantial utility experience and expertise.

        On September  14, 2003,  we filed a voluntary  petition for relief under
the  provisions  of Chapter 11 of the Federal  Bankruptcy  in the United  States
Bankruptcy  Court for the  District  of  Delaware.  During  our  bankruptcy,  we
retained  control of our assets and were authorized to operate our business as a
debtor-in-possession  while being subject to the  jurisdiction of the bankruptcy
court. NorthWestern emerged from bankruptcy on November 1, 2004.

        NorthWestern  was  incorporated  in  Delaware  in  1923.  Our  principal
executive offices are located at 125 S. Dakota Avenue, Sioux Falls, South Dakota
57104. Our telephone  number is (605) 978-2908.  We maintain an Internet site at
http://www.northwesternenergy.com  which contains information  concerning us and
our  subsidiaries.  The  information  contained  on  our  Internet  site  is not
incorporated by reference in this prospectus and should not be considered a part
of this prospectus.

                                       10
Risk Factors

        You should carefully  consider the risk factors described below, as well
as all other  information  available to you,  before making an investment in our
Shares or other securities.  The risks and uncertainties described below are not
the only ones facing us.  Additional risks and uncertainties not presently known
or that we currently  believe to be less  significant may also adversely  affect
us.

Bankruptcy-Related Risks

        Parties  objecting to  confirmation  of our plan of  reorganization  may
appeal the order confirming our plan of reorganization.

        On October 22, 2004,  Magten  Asset  Management  Corporation  ("Magten")
filed a motion  with the  Bankruptcy  Court  seeking a stay of the  confirmation
order pending  resolution of their appeal of such order,  which notice of appeal
was filed on October 25, 2004. On October 25, 2004, the Bankruptcy  Court denied
Magten's motion for a stay. Thereafter,  Magten requested that the United States
District Court for the District of Delaware  impose a stay of the  effectiveness
of the confirmation  order pending resolution of Magten's appeal. On October 29,
2004, the Delaware  District Court denied Magten's motion for a stay. The appeal
has now been  docketed with the District  Court but a briefing  schedule has not
been issued.  Although we will vigorously  defend against the appeal,  we cannot
currently   predict  the  impact  or  resolution  of  Magten's   appeal  of  the
confirmation order.

        Our Chapter 11  proceedings  and  subsequent  emergence  may result in a
negative  public  perception of us that may adversely  affect our  relationships
with customers and suppliers, as well as our business, results of operations and
financial condition.

        Despite  the  fact  that we have  successfully  consummated  our plan of
reorganization  and executed our exit financing on November 1, 2004, our Chapter
11  proceedings  have  negatively  impacted  us and  our  future  prospects  are
uncertain. The uncertainty regarding our future prospects may hinder our ongoing
business  activities and ability to operate,  fund and execute our business plan
by:  (i)  impairing  relations  with  existing  and  potential  customers;  (ii)
negatively  impacting  our  ability  to  attract,   retain  and  compensate  key
executives and associates and to retain employees generally;  (iii) limiting our
ability  to  obtain  trade  credit;   and  (iv)  impairing  present  and  future
relationships with vendors and service providers.

        We have  incurred,  and expect to continue to incur,  significant  costs
associated  with the  Chapter 11  proceedings,  which may  adversely  affect our
results of operations and cash flows.

        We have incurred and will continue to incur significant costs associated
with the  Chapter 11  proceedings.  The amount of these  costs,  which are being
expensed as incurred,  are expected to have a significant  adverse effect on our
results of operations and cash flows.  Although our plan of  reorganization  has
been successfully consummated and we have emerged from bankruptcy,  we expect to
continue to incur  significant  costs in connection with the consummation of our
plan of  reorganization.  These  expenses  are also  expected to have an adverse
effect on our results of operations and cash flows.

        We will be  subject  to  claims  made  after  the date that we filed for
bankruptcy  and  other  claims  that  were  not  discharged  in  the  bankruptcy
proceeding,  which  could  have a  material  adverse  effect on our  results  of
operations and profitability.

                                       11
Although most claims made against us prior to the date of the bankruptcy
filing were satisfied and discharged in accordance with the terms of our plan of
reorganization or in connection with settlement agreements that were approved by
the  Bankruptcy  Court  prior to  consummation  of our  plan of  reorganization,
certain claims that were not  discharged or settled may have a material  adverse
effect on our results of  operations  and  profitability.  In  addition,  claims
arising  after  the date of our  bankruptcy  filing  which  were  not  otherwise
discharged pursuant to Section 1141 of the Bankruptcy Code may not be discharged
in the bankruptcy proceeding.

        Claims made against us prior to the date of the bankruptcy  filing might
not be discharged  if the claimant had no notice of the  bankruptcy  filing.  In
addition, in other bankruptcy cases, states have challenged whether their claims
could be  discharged  in a federal  bankruptcy  proceeding if they never made an
appearance  in the case.  This  issue has not been  finally  settled by the U.S.
Supreme Court.

        Upon  consummation  of our  plan of  reorganization,  we  established  a
reserve of  approximately  4.4  million  shares of common  stock from the shares
allocated to holders of our trade vendor claims in excess of $20,000 and holders
of senior  unsecured  notes.  The  shares  held in this  reserve  may be used to
resolve various outstanding  unliquidated  litigation,  as these claims were not
discharged  upon  consummation  of our plan of  reorganization.  If these claims
ultimately exceed the reserve,  then such claimants could request the bankruptcy
court to amend our plan of  reorganization to allow for payment of the claims in
excess of the reserve.

        Certain of our prepetition  creditors received NorthWestern common stock
pursuant to our plan of reorganization and have the ability to influence certain
aspects of our business operations.

        Under our plan of  reorganization,  holders of certain  claims  received
distributions  of shares of our common stock.  Harbert  Management  Corporation,
which we refer to as Harbert  Management,  is affiliated with funds which, based
on the most recent information made available to us, collectively  received more
than 10% of our new common stock.  Harbert  Management could acquire  additional
claims or shares,  or divest  claims or shares in the  future.  Our  prepetition
senior unsecured noteholders, trade vendors with claims in excess of $20,000 and
holders of our trust  preferred  securities and our quarterly  income  preferred
securities received, collectively, 9% of our new common stock. Certain employees
will  receive  228,320  shares as part of an emergence  restricted  stock grant.
Other than  Harbert  Management,  however,  we are not aware of any other entity
that owns or controls 10% or more of our common stock distributed upon emergence
pursuant to our plan of reorganization.

        If any holders of a significant number of the shares of our common stock
were to act as a group,  such  holders  could be in a position  to  control  the
outcome of actions requiring stockholder  approval,  such as an amendment to our
certificate of incorporation,  the authorization of additional shares of capital
stock, and any merger, consolidation, or sale of all or substantially all of our
assets, and could prevent or cause a change of control of NorthWestern.

Risks Relating to Our Business

        We are one of several  defendants in the McGreevey  litigation,  a class
action  lawsuit   brought  in  connection   with  the  sale  of  generating  and
energy-related  assets by The Montana Power Company.  If we do not  successfully
resolve this lawsuit, the insurance coverage does not pay for any damages we are
found liable for, or our indemnification  claims against Touch America Holdings,

                                       12
Inc.  cannot be enforced and  reimbursed,  then our business  will be harmed and
there will be a material adverse impact on our financial condition.

        We are one of several  defendants  in a class  action  lawsuit  entitled
McGreevey,  et al. v. The Montana Power Company,  et al., now pending in federal
court in Montana. The lawsuit, which was filed by the former shareholders of The
Montana  Power  Company  (many of whom  became  shareholders  of  Touch  America
Holdings,  Inc. as a result of a corporate  reorganization  of The Montana Power
Company),  claims that the disposition of various  generating and energy-related
assets by The Montana  Power  Company was void  because of the failure to obtain
shareholder approval for the transactions. Plaintiffs thus seek to reverse those
transactions,  or  receive  fair  value for their  stock as of late  2001,  when
plaintiffs claim shareholder  approval should have been sought.  NorthWestern is
named as a defendant due to the fact that we purchased the Montana  Power,  LLC,
which the plaintiffs claim is a successor to The Montana Power Company.  On July
10, 2004, we and the other insureds under the applicable  directors and officers
liability  insurance  policies along with the plaintiffs in the McGreevey  case,
plaintiffs in the In Re Touch America Holdings,  Inc. Securities  Litigation and
the Touch America Creditors Committee reached a tentative settlement as a result
of mediation.  Among the terms of the tentative settlement, we, our wholly owned
subsidiary  Clark Fork,  and other  parties will be released  from all claims in
this case,  the  plaintiffs in McGreevey  will dismiss their claims  against the
third party purchasers of the generation assets and non-regulated  energy assets
of Montana Power Company,  including PPL Montana,  and a settlement  fund in the
amount of $67 million (all of which will be  contributed  by the former  Montana
Power  Company  directors and officers  liability  insurance  carriers)  will be
established.  The settlement is subject to the occurrence of several conditions,
including  approval of the proposed  settlement by the  Bankruptcy  Court in our
bankruptcy  proceeding  and approval of the proposed  settlement  by the federal
District Court for the District of Montana, where the class actions are pending.
Plaintiffs in the McGreevey class action have filed a motion for approval of the
settlement;  no hearing  date has been set. If the  proposed  settlement  is not
consummated,  then we intend to  vigorously  defend  against this  lawsuit.  The
Bankruptcy  Court has entered an order permitting the plaintiffs in McGreevey to
file a fraudulent  conveyance action against us if we are not able to consummate
the  settlement.  The  Bankruptcy  Court has scheduled a hearing on February 10,
2005,  to approve  the  settlement.  We cannot  currently  predict the impact or
resolution of this  litigation or reasonably  estimate a range of possible loss,
which could be  material,  and the  resolution  of these  lawsuits  may harm our
business and have a material adverse impact on our financial condition.

        We  are a  defendant  in  litigation  related  to our  quarterly  income
preferred  securities,  which  litigation  is related to the transfer of certain
assets to  NorthWestern  from our  subsidiary,  Clark Fork.  Certain current and
former  officers of Clark Fork are  defendants in a lawsuit  related to the same
transfer of assets.  Our business  could be harmed and there could be a material
adverse impact on our financial condition if we do not successfully  resolve the
lawsuit.

        Certain  creditors and  parties-in-interest  have initiated legal action
against us related to the transfer of the assets and liabilities  comprising our
Montana utility operations from Clark Fork to NorthWestern, and seek the removal
of such assets from our estate or the imposition of a constructive trust for the
benefit of such creditors.  This litigation could adversely affect our business,
results of  operations,  our  financial  condition  and our  ability to continue
normal operations.

        We are the subject of a formal  investigation by the SEC relating to the
restatement of our 2002 quarterly financial  statements and other accounting and
financial  reporting matters. If the investigation was to result in a regulatory
proceeding or action against us, then our business and financial condition could
be harmed.

                                       13
In December  2003,  the SEC notified  NorthWestern  that it had issued a
formal order of private investigation and subsequently subpoenaed documents from
NorthWestern and affiliated  companies  NorthWestern  Communications  Solutions,
Expanets  and Blue  Dot.  This  development  followed  the  SEC's  requests  for
information  made in  connection  with the  previously  disclosed  SEC  informal
inquiry into  questions  regarding the  restatements  and other  accounting  and
financial reporting matters.  Since December 2003, we have periodically received
and  continue  to  receive  subpoenas  from  the SEC  requesting  documents  and
testimony from employees  regarding these matters.  The SEC  investigation  will
continue,  and any claims alleging violations of federal securities laws made by
the SEC were not extinguished pursuant to our plan of reorganization.

        In  addition,   certain  of  our  directors  and  several  employees  of
NorthWestern   and  our   subsidiary   affiliates   have  been   interviewed  by
representatives of the Federal Bureau of Investigation  (FBI) concerning certain
of the allegations made in the class action securities and derivative litigation
matters.  We have not been advised that  NorthWestern  is the subject of any FBI
investigation. We understand that the FBI and the Internal Revenue Service (IRS)
have  contacted  former  employees of ours or our  subsidiaries.  As of the date
hereof,  we are not aware of any other  governmental  inquiry  or  investigation
related to these matters.

        We are cooperating with the SEC's  investigation and intend to cooperate
with the FBI if we are contacted in connection with any investigation. We cannot
predict whether or not any other  governmental  inquiry or investigation will be
commenced. We cannot predict when the SEC investigation will be completed or its
outcome. If the SEC determines that we have violated federal securities laws and
institutes  civil  enforcement  proceedings  against us, we may face  sanctions,
including,  but not limited to, monetary penalties and injunctive relief and any
monetary  liability  incurred by us may be material to our financial position or
results of operations.

        We are subject to certain regulations in the State of Montana regarding,
among other things,  the source of our power  supplies and the recovery of costs
from our customers  associated with  purchasing our power supplies.  If the MPSC
disallows  the recovery of the costs  incurred in entering  into default  supply
portfolio contracts while we are required to act as the "default supplier," then
we may not be able to fully  recover  the costs  incurred in  procuring  default
supply  contracts,  which could  adversely  affect our net income and  financial
condition.

        Our  electric and natural gas default  supply costs are being  recovered
through an annual  cost  tracking  process  pursuant to which rates are based on
estimated  electricity  and natural gas loads and supply  costs for the upcoming
tracking  period and are  annually  reviewed  and  adjusted  by the MPSC for any
differences in the previous tracking year's estimates to actual information. The
MPSC could,  in any particular  year,  disallow the recovery of a portion of the
electricity or natural gas default supply costs if it makes a determination that
we acted imprudently with respect to the open market purchase strategies or that
the approved  supply  contracts  were not prudently  administered.  A failure to
recover  such  costs  could  adversely  affect  our  net  income  and  financial
condition.

        We are subject to  extensive  governmental  regulations  that affect our
industry  and our  operations.  Existing  and changed  regulations  and possible
deregulation  have  the  potential  to  impose   significant   costs,   increase
competition  and change rates which could have a material  adverse effect on our
net income and financial condition.

        Our operations and the operations of our subsidiary entities are subject
to extensive  federal,  state and local laws and regulations  concerning  taxes,
service areas, tariffs, rates, issuances of securities, employment, occupational
health and safety, protection of the environment and other

                                       14
matters.  In addition,  we are required to obtain and comply with a wide variety
of licenses,  permits and other approvals in order to operate our facilities. In
the course of complying with these requirements, we may incur significant costs.
If we fail to comply  with these  requirements,  we could be subject to civil or
criminal  liability and the imposition of liens or fines. In addition,  existing
regulations  may  be  revised  or  reinterpreted,  new  laws,  regulations,  and
interpretations  thereof  may  be  adopted  or  become  applicable  to us or our
facilities  and future  changes in laws and  regulations  may have a detrimental
effect on our business.

        Our utility businesses are regulated by certain state commissions.  As a
result,  these  commissions  have the ability to review the regulated  utility's
books and records.  This ability to review our books and records could result in
prospective negative adjustments to our rates.

        The United  States  electric  utility  and natural  gas  industries  are
currently experiencing  increasing competitive pressures as a result of consumer
demands, technological advances,  deregulation,  greater availability of natural
gas-fired  generation  and other  factors.  Competition  for various  aspects of
electric and natural gas  services is being  introduced  throughout  the country
that will open these  markets  to new  providers  of some or all of  traditional
electric  utility and natural gas services.  Competition  is likely to result in
the  further  unbundling  of electric  utility  and natural gas  services as has
occurred in Montana for electricity  and Montana,  South Dakota and Nebraska for
natural  gas.   Separate  markets  may  emerge  for  generation,   transmission,
distribution,  meter reading,  billing and other services  currently provided by
electric  utility and natural gas providers as a bundled  service.  As a result,
significant  additional  competitors  could  become  active  in the  generation,
transmission and distribution segments of our industry.

        Proposals have been  introduced in Congress to repeal the Public Utility
Holding  Company Act of 1935,  or PUHCA.  To the extent  regulatory  barriers to
entry are eliminated, competitive pressures increase, or the pricing and sale of
transmission  or  distribution  services  or  electricity  or fuel  assume  more
characteristics  of a commodity  business,  we could face increased  competition
adverse to our business. There is no assurance that the introduction of new laws
or other future regulatory  developments will not have a material adverse effect
on our  business,  results of operations  or financial  condition.  If we cannot
comply with all applicable regulations, our business, results of operations, and
financial condition could be adversely affected.

        Under  our  plan  of  reorganization,   funds  affiliated  with  Harbert
Management  collectively received more than 10% of our new common stock. Harbert
Management  or any other entity that owns 10% or more of our voting  securities,
may be  deemed  to be a  holding  company  under  PUHCA and we would be deemed a
subsidiary of a holding  company unless such 10% holder were able to qualify for
an exemption from  registration.  Unless such  exemption is available,  such 10%
holder and we and our  subsidiaries  would  become  subject  to a  comprehensive
regulatory  scheme imposed by the SEC in order to protect  customers,  investors
and the public  interest.  Although the SEC does not regulate  rates and charges
under PUHCA,  it does regulate the structure,  financing,  lines of business and
internal  transactions  of public  utility  holding  companies  and their system
companies.  In order to obtain  financing,  acquire  additional  public  utility
assets or stock, or engage in other significant transactions, we would generally
be required to obtain approval from the SEC under PUHCA.

        We will not be able to  fully  recover  transition  costs,  which  could
adversely affect our net income and financial condition.

                                       15
Montana law required the MPSC to determine the value of net  unmitigable
transition  costs  associated  with the  transformation  of the  former  utility
business of The Montana  Power  Company  from a vertically  integrated  electric
service company to a utility  providing only default supply and transmission and
distribution  services.  The  MPSC  was  also  obligated  to  set a  competitive
transition charge, or CTC, to be included in distribution rates to collect those
net  transition  costs.  The  majority  of  these  transition  costs  relate  to
out-of-market power purchase contracts,  which run through 2032, that the former
owner of our Montana  transmission  and  distribution  business  was required to
enter into with certain  "qualifying  facilities" (QF) as established  under the
Public  Utility  Regulatory  Policies  Act of 1978.  Based on results of an MPSC
order and a FERC determination,  we will not be able to fully recover all of the
transition  costs.  As of September 30, 2004, we estimated  that we will fail to
collect  approximately  $146.6  million on a net  present  value  basis over the
remaining terms of the QF power supply  contracts.  While the CTC is designed to
adjust and  compensate  for future  changes  in sales  volumes or other  factors
affecting  actual  cost  recoveries,  the CTC runs  through  the year 2029,  and
therefore,  we cannot predict with  certainty the actual  recovery of transition
costs.  Changes in the recovery of transition  costs could adversely  affect our
net income and financial  condition by increasing  the current under  collection
amount.

        We may not be able to continue as a going concern  unless we can achieve
profitability within the near future.

        The  financial  statements  in our  Quarterly  Report on Form 10-Q as of
September  30,  2004,  have  been  prepared  on a  going  concern  basis,  which
contemplates continuity of operations,  realization of assets and liquidation of
liabilities  in the ordinary  course of business.  As a result of the bankruptcy
filing and related  events,  there is no assurance that the carrying  amounts of
assets will be realized or that  liabilities  will be  liquidated or settled for
the amounts recorded. In addition, as noted in the unaudited pro forma financial
statements  included herein,  the  implementation  of our plan of reorganization
could change the amounts  reported in the  financial  statements.  Our liquidity
generally depends on cash provided by operating activities and access to the new
credit  facility.  Our ability to continue as a going  concern and the continued
appropriateness  of using the going concern  basis for our financial  statements
are  dependent  upon,  among  other  things,  (i) our ability to comply with the
covenants of the new credit facility, (ii) our ability to maintain adequate cash
on hand,  (iii) our ability to continue to generate cash from  operations,  (iv)
our ability to attract,  motivate and retain key executives  and employees,  and
(v) our ability to achieve profitability following such consummation.

        Our actual fresh-start reporting adjustments may vary significantly from
the fresh-start  reporting adjustments used to calculate the pro forma financial
data that is included in our most recent Quarterly Report on Form 10-Q.

        We adopted  fresh-start  reporting upon the  consummation of our plan of
reorganization. Under fresh-start reporting, our confirmed enterprise value will
be allocated to our assets based on their  respective  fair values in conformity
with the purchase  method of accounting for business  combinations.  Any portion
not attributed to specific  tangible or identified  intangible assets will be an
indefinite-lived intangible asset referred to as "reorganization value in excess
of value of  identifiable  assets" and reported as goodwill.  Any excess of fair
value  of  assets  and  liabilities  over  confirmed  enterprise  value  will be
allocated as a pro rata reduction of the amounts that otherwise  would have been
assigned to all of the assets  except  financial  assets other than  investments
accounted for by the equity method,  assets to be disposed of by sale,  deferred
tax assets,  prepaid assets relating to pension or other postretirement  benefit
plans and any other current assets.

                                       16
We have prepared unaudited pro forma  consolidated  financial data which
give effect to  fresh-start  reporting  adjustments,  as  reflected  in Note 17,
"Reorganization  Proforma Reporting," to our 10-Q, filed November 8, 2004. These
statements  have been prepared by us based on the  assumptions  described in the
footnotes to the pro forma financial  information contained in Note 17. However,
we will obtain  actuarial  valuations and reduce certain tax attributes based on
our  cancellation of indebtedness  income as of our emergence date,  November 1,
2004.  As a result,  we expect there may be  adjustments  in carrying  values of
certain assets and liabilities and such adjustments may be material.

        Our  electric  and  natural  gas  distribution  systems  are  subject to
municipal condemnation.

        The  government  of each  of the  municipalities  in  which  we  provide
electric or natural gas service has the right to condemn our  facilities in that
community  and to  establish a municipal  utility  distribution  system to serve
customers  by use of such  facilities,  subject to the approval of the voters of
the  community  and the payment to  NorthWestern  of fair  market  value for our
facilities,  including  compensation for the cancellation of our service rights.
If we  lose  a  material  portion  of  our  distribution  systems  to  municipal
condemnation,  our net income and financial condition could be harmed because we
may not be able to replace or repurchase  income  generating  assets in a timely
manner, if at all.

        Our  revenues  and results of  operations  are subject to risks that are
beyond our control,  including  but not limited to future  terrorist  attacks or
related acts of war.

        The cost of repairing  damage to our facilities  due to storms,  natural
disasters,  wars,  terrorist acts and other  catastrophic  events,  in excess of
reserves  established  for such repairs or insurance  recoveries,  may adversely
impact our results of operations, financial condition and cash flows. Generation
and  transmission  facilities,  in general,  have been  identified  as potential
terrorist  targets.  The  occurrence or risk of  occurrence of future  terrorist
activity  may impact our results of  operations,  financial  condition  and cash
flows in unpredictable  ways. These actions could also result in adverse changes
in the  insurance  markets  and  disruptions  of  power  and fuel  markets.  The
availability of insurance covering risks we and our competitors typically insure
against may decrease. In addition,  the insurance we are able to obtain may have
higher  deductibles,  higher  premiums and more  restrictive  policy  terms.  In
addition,  our electric  transmission  and  distribution,  electric  generation,
natural gas distribution and pipeline and gathering facilities could be directly
or indirectly harmed by future terrorist activity.

        The  occurrence  or risk of occurrence  of future  terrorist  attacks or
related acts of war could also  adversely  affect the United States  economy.  A
lower  level  of  economic   activity  could  result  in  a  decline  in  energy
consumption, which could adversely affect our revenues and margins and limit our
future  growth  prospects.  Also,  these risks could  cause  instability  in the
financial markets and adversely affect our ability to access capital or the cost
we pay for such capital.

        Seasonal and  quarterly  fluctuations  of our business  could  adversely
affect our results of operations and financial condition.

        Our electric and gas utility  business is seasonal and weather  patterns
can  have  a  material  impact  on  their  financial  performance.   Demand  for
electricity  is often  greater in the summer and winter months  associated  with
cooling and heating.  Because  natural gas is heavily used for  residential  and
commercial  heating,  the demand for this product  depends  heavily upon weather
patterns  throughout our market areas,  and a significant  amount of natural gas
revenues are recognized in the

                                       17
first and  fourth  quarters  related to the  heating  season.  Accordingly,  our
operations  have  historically  generated  less revenues and income when weather
conditions are milder in the winter and cooler in the summer.  In the event that
we experience  unusually mild winters or cool summers in the future, our results
of operations and financial condition could be adversely affected.  In addition,
exceptionally  hot summer  weather or unusually  cold winter  weather  could add
significantly  to  working  capital  needs  to fund  higher  than  normal  power
purchases to meet customer demand for electricity and natural gas.

        Changes in commodity  prices and availability of supply may increase our
cost of producing and distributing  electricity and distributing  natural gas or
decrease  the  amount we receive  from  selling  electricity  and  natural  gas,
adversely affecting our financial performance and condition.

        Our  wholesale  costs for  electricity  and  natural  gas are  recovered
through  various  pass-through  mechanisms  in each of the states we serve.  The
rates  are   established   based  upon  projected   market  prices  or  contract
obligations.  As these variables change, we adjust our rates through our monthly
tracker.  To the  extent  our  adjusted  rate  is  deemed  inappropriate  by the
applicable state regulatory commission,  we could under-recover our costs, which
would adversely impact our results of operations.  While the tracker  mechanisms
are designed to allow a timely  recovery of costs, a rapid increase in commodity
costs may create a temporary, material under recovery situation. As a result, we
may not be able to immediately  pass on to our retail  customers rapid increases
in our energy supply costs, which could reduce our liquidity.

        We do  not  own  any  natural  gas  reserves  and do  not  own  electric
generation  assets to  service  our  Montana  operations.  As a  result,  we are
required  to procure  our  entire  natural  gas  supply  and all of our  Montana
electricity supply pursuant to contracts with third-party suppliers. In light of
this reliance on third-party  suppliers,  we are exposed to certain risks in the
event a third-party supplier is unable to satisfy its contractual obligation. If
this  occurred,  we might be  required to purchase  gas and  electricity  supply
requirements in the energy markets, which may not be on commercially  reasonable
terms, if at all. If prices were higher in the energy  markets,  it could result
in a temporary material under-recovery that would reduce our liquidity.

        Our utility business is subject to extensive  environmental  regulations
and potential environmental liabilities, which could result in significant costs
and liabilities.

        Our utility  business  is subject to  extensive  regulations  imposed by
federal,  state and  local  government  authorities  in the  ordinary  course of
operations with regard to the environment,  including environmental  regulations
relating to air and water quality,  solid waste disposal and other environmental
considerations.   We  believe  that  we  are  in  substantial   compliance  with
environmental  regulatory  requirements  and that  maintaining  compliance  with
current  requirements  will not  materially  affect our  financial  position  or
results  of  operations.  However,  possible  future  developments,  such as the
promulgation of more stringent  environmental  laws and regulations,  and future
enforcement  proceedings  that may be taken by environmental  authorities  could
affect the costs and the manner in which we conduct our business and could cause
us to make substantial  additional capital  expenditures.  There is no assurance
that we would be able to recover  these  increased  costs from our  customers or
that our business,  financial  condition and results of operations  would not be
materially adversely affected.

        Many of these  environmental  laws and  regulations  create  permit  and
license requirements and provide for substantial civil and criminal fines which,
if imposed,  could result in material  costs or  liabilities.  We cannot predict
with certainty the occurrence of a private tort allegation or

                                       18
government claim for damages associated with specific environmental  conditions.
We may be required  to make  significant  expenditures  in  connection  with the
investigation  and  remediation of alleged or actual spills,  personal injury or
property damage claims, and the repair and upgrade of our facilities in order to
meet future requirements and obligations under environmental laws.

        Environmental  laws and  regulations  require us to incur certain costs,
which  could be  substantial,  to operate  existing  facilities,  construct  and
operate new facilities,  and mitigate or remove the effect of past operations on
the environment.  Governmental regulations establishing environmental protection
standards are continually evolving, and, therefore,  the character,  scope, cost
and availability of the measures we may be required to take to ensure compliance
with evolving laws or regulations cannot be predicted. Our range of exposure for
environmental  remediation obligations is estimated to be $45.3 million to $84.1
million. We had an environmental reserve of $45.3 million at September 30, 2004.
This reserve was established in anticipation of future remediation activities at
our  various  environmental  sites  and does not  factor in any  exposure  to us
arising from private tort  actions or  government  claims for damages  allegedly
associated  with  specific   environmental   conditions.   These   environmental
liabilities   will  continue  and  any  claims  with  respect  to  environmental
liabilities will not be extinguished pursuant to our plan of reorganization.  To
the extent that our  environmental  liabilities are greater than our reserves or
we are  unsuccessful  in recovering  anticipated  insurance  proceeds  under the
relevant  policies,  our results of operations and financial  condition could be
adversely affected.

        We  have  experienced   increased   interest  costs  and  other  adverse
consequences  as a result of our loss of  investment  grade  credit  ratings and
expect that our  non-investment  grade status will continue to adversely  affect
our cash flows.

        Our credit  ratings have been  downgraded  to  non-investment  grade and
could be  downgraded  further.  Our current  non-investment  grade  ratings have
increased our borrowing  costs,  both by increasing the actual interest rates we
will be  required  to pay  under  the new  credit  facility  and any debt in the
capital markets that we are able to issue. In addition, we have been required to
either prepay or post significant  amounts of collateral in the form of cash and
letters of credit to support our operations.  In addition,  our stated intention
to  resume  the  payment  of  quarterly  dividends  on  our  common  stock  upon
demonstrating the financial ability to do so may delay our ability to achieve an
investment grade rating for our debt securities. While we are working to resolve
many of the concerns cited by the credit rating  agencies,  we cannot assure you
that our credit ratings will improve in the foreseeable future.

        We have  recently  experienced  net  losses  and losses may occur in the
future.

        We  reported  a net loss of $17.4  million  for the  nine  months  ended
September 30, 2004, and have incurred  losses in prior  periods.  Our results of
operations will continue to be affected by events and conditions both within and
beyond our control,  including competition,  economic,  financial,  business and
other  conditions.  Therefore,  we cannot  assure you that we will not incur net
losses in the future.

        Our ability to access the capital markets is dependent on our ability to
obtain  certain  regulatory  approvals and the  covenants  contained in our debt
instruments.

        We  may  need  to  continue  to  support  working  capital  and  capital
expenditures, and to refinance maturing debt, through external financing. Often,
we must obtain federal and certain state regulatory approvals in order to borrow
money or to issue  securities and therefore will be dependent

                                       19
on the federal and state  regulatory  authorities to issue favorable orders in a
timely manner to permit us to finance our operations.  We cannot assure you that
these  regulatory  entities  will issue such  orders or that such orders will be
issued on a timely basis. In addition, our new credit facility and the indenture
governing the notes restrict us from incurring additional indebtedness.

        We are subject to risks associated with a changing economic  environment
that could adversely affect our access to funding for our operations.

        Events   such  as  the   bankruptcy   of   several   large   energy  and
telecommunications  companies have adversely  affected the availability and cost
of capital for our business.  Such  economic  environment,  if sustained,  could
constrain the capital  available to our industry and would adversely  affect our
access to funding for our operations.

        If we are unable to  successfully  sell our noncore  assets or wind-down
operations of certain subsidiaries,  then the amount of proceeds we receive from
such sales could be significantly less than anticipated and adversely affect our
liquidity.

        As part of our efforts to restructure our business, we are attempting to
divest our  Montana  First  Megawatts  (MMI)  generation  project in Montana and
wind-down  operations  of  Netexit  and Blue Dot.  If the sales  prices for such
assets are less than anticipated,  or we encounter unexpected liabilities,  such
as costs  relating to the  wind-down of  operations,  including  termination  of
benefit  plans and payment of other  liabilities,  then our  liquidity  could be
adversely  affected.  Further,  we  cannot  assure  you  that we will be able to
consummate  such asset sales or that any asset sales will be at or greater  than
the current net book value of such assets.

        Our subsidiary,  Netexit, sold substantially all of its assets to Avaya,
Inc. In order to  wind-down  its affairs in an orderly  manner,  Netexit and its
subsidiaries  filed  for  bankruptcy  protection  on May 4,  2004.  Pending  the
resolution  of open  claims to Netexit  creditors,  the  proceeds  from the sale
remain at Netexit and  distributions  to NorthWestern  will be delayed until the
bankruptcy  proceedings are resolved. If we encounter unexpected claims or costs
relating  to  its   wind-down  of   operations,   our  ability  to  receive  any
distributions from Netexit and our liquidity could be adversely affected.

        Certain  subsidiaries may be subject to potential rescission rights held
by their minority shareholders.

        In connection  with  acquisitions  in prior years,  Netexit and Blue Dot
issued  shares of their capital  stock as part of the  consideration  offered to
owners of  various  companies  that they  acquired.  None of these  shares  were
registered  under the  Securities  Act in the belief that the  issuance of these
shares was exempt from the  registration  requirements of the Securities Act. It
is possible that the exemptions from  registration on which Netexit and Blue Dot
relied  were not  available,  and that  these  shares  may have  been  issued in
violation of the  Securities  Act. As a result,  the persons who received  these
shares  upon the sale of their  companies  to  Netexit  or Blue Dot may have the
right to seek  recovery  from Netexit or Blue Dot for damages as  prescribed  by
applicable securities laws.

        Our actual financial results may vary significantly from the projections
filed with the Bankruptcy Court.

        In  connection  with our plan of  reorganization,  we were  required  to
prepare projected  financial  information to demonstrate to the Bankruptcy Court
the  feasibility  of our plan of  reorganization  and our  ability  to  continue
operations upon our emergence from bankruptcy. The

                                       20
projections  were  initially  filed with the  Bankruptcy  Court on May 17, 2004.
These  projections  are not  incorporated  by  reference.  At the time they were
prepared,   the  projections  reflected  numerous  assumptions   concerning  our
anticipated  future  performance  and with respect to prevailing and anticipated
market and economic  conditions that were and remain beyond our control and that
may not materialize.  Projections are inherently subject to uncertainties and to
a wide variety of significant  business,  economic and  competitive  risks.  Our
actual  results will vary from those  contemplated  by the  projections  and the
variations may be material.

        Our  pension  and other  post-retirement  benefit  costs are  subject to
fluctuation based on the performance of the financial markets.

        Our pension and other post-retirement  benefit plan assets are primarily
made up of equity and fixed income  investments.  Fluctuations  in actual equity
market  returns  as well as  changes  in  general  interest  rates may result in
increased or decreased pension and other post-retirement benefit costs in future
periods.  Likewise,  changes in assumptions regarding current discount rates and
expected rates of return on plan assets could also increase or decrease recorded
pension and other post-retirement benefit costs.

Use of Proceeds

               The Selling Securityholders will receive all of the proceeds from
sales of the shares,  and we will not receive any proceeds  from the sale of the
shares.

Selling Securityholders

               The Shares covered by this prospectus are being offered by or for
the accounts of the Selling Securityholders.  The table below sets forth (i) the
name of each such person who is known to us at this time, (ii) the nature of any
position,   office,   or  other   material   relationship   which  the   Selling
Securityholder has had within the past three years with the registrant or any of
its  predecessors  or  affiliates,  (iii) the amount of  securities of the class
owned by such security  holder prior to the offering,  and (iv) the amount to be
offered for the security holder's account.

--------------------- ------------------------------- -------- -----------------
                                                                  Amount which
                                                                    Selling
                                                                 Securityholder
                                                      Shares        may sell
                                                      owned        hereunder
  Name of Selling                                     before    (whether or not
   Securityholder     Relationship with NorthWestern   sale    currently vested)
--------------------- ------------------------------- -------- -----------------
Gary Drook                CEO & President, Director      0           102,960
------------------------- ------------------------------------ -----------------
Mike Hanson               COO                            0            35,720
------------------------- ------------------------------------ -----------------
Brian Bird                CFO                            0            21,440
------------------------- ------------------------------------ -----------------
Roger Schrum              VP-HR & Communications         0            10,800
------------------------- ------------------------------------ -----------------
Patrick Corcoran          VP-Regulatory Affairs          0             3,600
------------------------- ------------------------------------ -----------------
Alan Dietrich             VP-Corporate Secretary         0             3,450
------------------------- ------------------------------------ -----------------
Dave Gates                VP-Transmission Ops            0             3,550
------------------------- ------------------------------------ -----------------
Tom Knapp                 VP-Deputy Gen. Counsel         0             5,300
------------------------- ------------------------------------ -----------------
Curt Pohl                 VP-Distribution Ops            0             4,440
------------------------- ------------------------------------ -----------------
Bobbi Schroeppel          VP-Customer Care               0             3,450
------------------------- ------------------------------------ -----------------
Bart Thielbar             VP-Info Technology             0             4,440
------------------------- ------------------------------------ -----------------

                                       21
------------------------- ------------------------------------ -----------------
Greg Trandem              VP-Support Services            0             4,370
------------------------- ------------------------------------ -----------------
George Boyles             Former Internal Audit &        0               800
                          Controls Officer
------------------------- ------------------------------------ -----------------
Paul Evans                Treasurer                      0             1,000
------------------------- ------------------------------------ -----------------
Kendall Kliewer           Controller                     0             1,600
------------------------- ------------------------------------ -----------------
Michael Nieman            Internal Audit & Controls      0             1,250
                          Officer
------------------------- ------------------------------------ -----------------
Chris Fonss               Dir-Tax                        0             1,570
------------------------- ------------------------------------ -----------------
Rick Burt                 Div Mgr                        0               550
------------------------- ------------------------------------ -----------------
John Carmody              Dir Dist Eng                   0               475
------------------------- ------------------------------------ -----------------
Mike Cashell              Dir Trans Mktg                 0               500
------------------------- ------------------------------------ -----------------
Jim Krusemark             Div Mgr                        0               550
------------------------- ------------------------------------ -----------------
Steve Lehner              Dir Dist Mgmt                  0               475
------------------------- ------------------------------------ -----------------
Bill Rhoads               GM, Dist Ops MT                0               550
------------------------- ------------------------------------ -----------------
Mike Schmit               Div Mgr                        0               550
------------------------- ------------------------------------ -----------------
Randy Sullivan            Div Mgr                        0               560
------------------------- ------------------------------------ -----------------
Mike Sydow                GM, Dist Ops SD/NE             0               725
------------------------- ------------------------------------ -----------------
John Waterman             Dir Gas Trans/Stor             0               560
------------------------- ------------------------------------ -----------------
Daniel Widhalm            Dir Elec Trans                 0               550
------------------------- ------------------------------------ -----------------
Ted Williams              Dir Trans Ops                  0               525
------------------------- ------------------------------------ -----------------
Len LeVeaux               Div Mgr                        0               445
------------------------- ------------------------------------ -----------------
Jason Merkel              Div Mgr                        0               445
------------------------- ------------------------------------ -----------------
Dennis Wagner             GM, Gen Trans Ops              0               515
------------------------- ------------------------------------ -----------------
Reed McKee                Dir Dist Systems               0               485
------------------------- ------------------------------------ -----------------
Michael Young             Sr. Atty                       0             1,900
------------------------- ------------------------------------ -----------------
Sally Neal                Dir Info Development           0               350
------------------------- ------------------------------------ -----------------
Donna Haeder              Dir Risk Mgmt                  0               360
------------------------- ------------------------------------ -----------------
Frank Spangler            Mgr Call Center                0               350
------------------------- ------------------------------------ -----------------
Rick Edwards              Mgr Cust & Sup Rel             0               350
------------------------- ------------------------------------ -----------------
Dan Daly                  Mgr Rev Collections            0               350
------------------------- ------------------------------------ -----------------
Katherine Curran          Mgr Sys Infra & Support        0               350
------------------------- ------------------------------------ -----------------
Margaret Lowney           Dir Comp/Payroll               0               500
------------------------- ------------------------------------ -----------------
Jana Quam                 Dir HR                         0               715
------------------------- ------------------------------------ -----------------
Claudia Rapkoch           Dir Comm                       0               350
------------------------- ------------------------------------ -----------------
Linda Wittrock            Dir Comm Affairs               0               350
------------------------- ------------------------------------ -----------------
Michael O'Neill           Dir Labor Relations            0               475
------------------------- ------------------------------------ -----------------
Tammy Lydic               Mgr Investor Communications    0               250
------------------------- ------------------------------------ -----------------
Barry O'Leary             Dir Safety/Health              0               500
------------------------- ------------------------------------ -----------------
Tom Loberg                Dir Process Improv             0               535
------------------------- ------------------------------------ -----------------
Bleau LaFave              Dir Support Services           0               515
------------------------- ------------------------------------ -----------------
Greg Gleason              Dir IT Infrastructure          0               490
------------------------- ------------------------------------ -----------------
Rick Van Vleet            Coordinator Lic./Leasing       0               325
------------------------- ------------------------------------ -----------------
Vernon Hogge              Dir. Telecom                   0               300
------------------------- ------------------------------------ -----------------

Plan of Distribution

        We are registering the shares on behalf of the Selling  Securityholders.
As  used  in  this  prospectus,  "Selling  Securityholders"  includes  permitted
transferees or other successors-in-interest selling shares received from a named
Selling  Securityholder  as a gift or other non-sale  related transfer after the
date of this prospectus.  We will pay all costs, expenses and fees in connection
with the  registration  of the shares  offered by this  prospectus.  The Selling
Securityholders will pay brokerage  commissions and similar selling expenses, if
any, attributable to the sale of shares. The

                                       22
Selling  Securityholders  may sell shares from time to time in one or more types
of   transactions   on  any  available   securities   exchange,   in  negotiated
transactions,  through put or call options transactions  relating to the shares,
through  short  sales of shares or a  combination  of such  methods of sale,  at
market  prices  prevailing at the time of sale or at  negotiated  prices.  These
transactions   may  or  may  not  involve   brokers  or  dealers.   The  Selling
Securityholders  have  not  entered  into  any  agreements,   understandings  or
arrangements with any underwriters or  broker-dealers  regarding the sale of his
or her shares, and no underwriter or coordinating broker is acting in connection
with the proposed sale of shares by any Selling Securityholder.

        The Selling  Securityholders  may effect these  transactions  by selling
shares directly to purchasers or to or through broker-dealers,  which may act as
agents or principals.  These broker-dealers may receive compensation in the form
of discounts, concessions or commissions from the Selling Securityholders and/or
the  purchasers  of shares for whom the  broker-dealers  may act as agents or to
whom they sell as  principal,  or both (which  compensation  as to a  particular
broker-dealer might be in excess of customary commissions).

        The  Selling   Securityholders   and  any  broker-dealers  that  act  in
connection with the sale of shares might be deemed to be  "underwriters"  within
the meaning of Section 2(11) of the Securities Act of 1933, and any  commissions
received by these broker-dealers and any profit on the resale of the shares sold
by them while acting as principals might be deemed to be underwriting  discounts
or commissions under the Securities Act. The Selling  Securityholders  may agree
to  indemnify  any  agent,   dealer  or  broker-dealer   that   participates  in
transactions   involving  sales  of  the  shares  against  certain  liabilities,
including liabilities arising under the Securities Act.

        Because a Selling  Securityholder  may be deemed to be an  "underwriter"
within  the  meaning  of  Section  2(11)  of the  Securities  Act,  the  Selling
Securityholders  will be subject to the prospectus delivery  requirements of the
Securities  Act.  We  have  informed  the  Selling   Securityholders   that  the
anti-manipulative  provisions of Regulation M under the Securities  Exchange Act
of 1934 may apply to their sale of Shares in the market.

        The  Selling  Securityholders  also may  resell  all or a portion of the
shares  in open  market  transactions  in  reliance  upon  Rule  144  under  the
Securities  Act,  provided  the Selling  Securityholders  meet the  criteria and
conform to the  requirements of that Rule. This may occur without  reliance upon
this re-offer prospectus.

        The  Selling  Securityholders  might not sell all of the Shares  offered
hereby.  In  addition,  there may be  certain  contractual  restrictions  on the
ability  of  Selling  Securityholders  to  sell  any  or all  of  their  Shares.
NorthWestern has notified the Selling  Securityholders  of the need to deliver a
copy of this re-offer prospectus in connection with any sale of the Shares.

Legal Matters

        Certain  legal  matters have been passed upon for us by Paul,  Hastings,
Janofsky & Walker LLP,  Washington,  D.C. The validity of the Restricted  Shares
has been  passed  upon for us by Thomas  J.  Knapp,  Esq.,  in his  capacity  as
NorthWestern's General Counsel.

Experts

        The financial  statements and the related financial  statement  schedule
incorporated in this prospectus by reference from  NorthWestern's  Annual Report
on Form 10-K for the year ended December 31, 2003, have been audited by Deloitte
& Touche LLP, an independent registered public

                                       23
accounting  firm, as stated in their  report,  which is  incorporated  herein by
reference   (which  report   expresses  an  unqualified   opinion  and  includes
explanatory  paragraphs relating to the bankruptcy proceedings described in Note
1, the going concern  uncertainty  described in Note 3, the change in methods of
accounting for asset retirement  obligations and company  obligated  mandatorily
redeemable  preferred  securities in 2003 described in Note 4, and the change in
the  method of  accounting  for  goodwill  and other  intangible  assets in 2002
described in Note 6) and has been so incorporated in reliance upon the report of
such firm given upon their authority as experts in accounting and auditing.

                      DEALER PROSPECTUS DELIVERY OBLIGATION

        Until April 28,  2005,  all dealers  that effect  transactions  in these
securities,  whether or not  participating in this offering,  may be required to
deliver a prospectus.  This is in addition to the dealer's obligation to deliver
a  prospectus  when  acting as  underwriters  and with  respect to their  unsold
allotments or subscriptions.

                                       24
PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.  Incorporation by Reference

        (i)     NorthWestern's  Annual  Report on Form 10-K for the fiscal  year
                ended  December  31,  2003,  as filed  with the SEC on March 15,
                2004;

        (ii)    The  Registrant's  Quarterly Report on Form 10-Q for the quarter
                ended  March 31,  2004 (as filed with the  Commission  on May 7,
                2004);

        (iii)   The  Registrant's  Quarterly Report on Form 10-Q for the quarter
                ended June 30, 2004 (as filed with the  Commission  on August 6,
                2004);

        (iv)    The  Registrant's  Quarterly Report on Form 10-Q for the quarter
                ended  September  30,  2004 (as  filed  with the  Commission  on
                November 8, 2004);

        (v)     The  description  of  NorthWestern's  common stock  contained in
                NorthWestern's  Registration  Statement on Form 8-A12G, as filed
                with the SEC on November 2, 2004,  and any  amendment  or report
                filed for the purpose of updating such description; and

        (vi)    The  Company's  Current  Reports  on  Forms  8-K  subsequent  to
                December 31, 2003, and up to and including the date of filing of
                this Registration Statement.

        You may contact us to request copies of these filings as follows:

        NorthWestern Corporation
        Attn: Thomas J. Knapp, Esq., General Counsel
        125 S. Dakota Avenue
        Sioux Falls, South Dakota  57104
        Telephone: (605) 978-2908.

        Any statement  contained herein or in a document  incorporated or deemed
incorporated  by reference  herein or therein  shall be deemed to be modified or
superceded for the purposes of this Registration  Statement to the extent that a
statement contained herein or therein modifies or supercedes such statement. Any
such  statement  shall not be deemed to  constitute a part of this  Registration
Statement or Prospectus except to the extent so modified or replaced.

Item 4. Description of Securities

This item is not applicable

Item 5.  Interests of Named Experts and Counsel

This item is not applicable.

Item 6. Indemnification of Directors and Officers

        The Articles of Incorporation and the By-Laws of the Registrant  provide
for indemnification by the Registrant of each of its directors and officers (and
of those  appointed by the Registrant to

                                       25
serve as  directors  or  officers  of other  entities),  to the  fullest  extent
permitted by Delaware  law, for  liability  (including,  for example,  liability
arising under the Securities Act of 1933) of such director or officer arising by
reason of his or her status as a director  or officer of the  Registrant  (or of
such other entity,  as the case may be),  provided that he or she has acted in a
good faith and reasonable  belief that he or she acted in the Registrant's  best
interests.  The Registrant will also advance expenses prior to final disposition
of an action,  suit or  proceeding  upon the  receipt of an  undertaking  by the
director  or  officer to repay such  amount if such  director  or officer is not
entitled to indemnification.

        The  directors and officers of the  Registrant  are covered by insurance
policies indemnifying against certain liabilities, including certain liabilities
arising under the  Securities  Act of 1933, as amended (the  "Securities  Act"),
which might be incurred by them in such capacities and against which they cannot
be indemnified by the Registrant.

Item 7. Exemption from Registration Claimed

        On November 1, 2004, the  Registrant  emerged from Chapter 11 bankruptcy
protection. The Registrant issued 228,320 shares in the form of restricted stock
pursuant to the Plan in recognition of the services of certain key  NorthWestern
personnel.  If any of these  grants  of  restricted  stock  are  forfeited,  the
forfeited  shares  shall not be  available  to be  granted  under the Plan.  The
issuance  of shares of Common  Stock  under the Plan was made in  reliance  upon
Section 1145 of the  Bankruptcy  Code,  which  exempts the original  issuance of
securities under a plan of reorganization from registration under the Securities
Act and applicable state law.

Item 8. Exhibits

Exhibit
No.             Description
---             -----------

3.1             NorthWestern   Corporation   2004  Special   Recognition   Grant
                Restricted Stock Plan.*

3.2             Amended   and   Restated   Certificate   of   Incorporation   of
                NorthWestern Corporation, dated October 15, 2004.*

3.3             Amended  and  Restated  Bylaws of  NorthWestern  Corporation,  a
                Delaware Corporation, dated October 15, 2004.*

4.1             Specimen Share Certificate.*

5.1             Opinion of NorthWestern Corporation's General Counsel (Thomas J.
                Knapp,  Esq.)  regarding the legality of the  restricted  Common
                Shares being registered.*

23.1            Consent of Deloitte & Touche LLP.*

23.2            Consent of NorthWestern Corporation (included in Exhibit 5.1).*

24.1            Power of Attorney (included on signature page hereto).*

99.1            Form  of  Award  under  the  2004  Special   Recognition   Grant
                Restricted Stock Plan.*

* Filed Herewith

                                       26
Item 9. Undertakings

(a)     NorthWestern hereby undertakes:

        (1)     To file,  during any  period in which  offers or sales are being
                made, a post-effective amendment to this registration statement:

                (i)     To include any prospectus  required by Section 10(a) (3)
                        of the Securities Act of 1933;

                (ii)    To reflect in the prospectus any facts or events arising
                        after the effective date of the  registration  statement
                        (or the most recent  post-effective  amendment  thereof)
                        which,  individually  or in the  aggregate,  represent a
                        fundamental  change in the  information set forth in the
                        registration  statement.  Notwithstanding the foregoing,
                        any increase or decrease in volume of securities offered
                        (if the total dollar value of  securities  offered would
                        not exceed that which was  registered) and any deviation
                        from  the  low or  high  end of  the  estimated  maximum
                        offering   range  may  be   reflected  in  the  form  of
                        prospectus  filed with the SEC  pursuant  to Rule 424(b)
                        if, in the  aggregate,  the  changes in volume and price
                        represent  no  more  than  a 20  percent  change  in the
                        maximum  aggregate  offering  price  set  forth  in  the
                        "Calculation of Registration Fee" table in the effective
                        registration statement; and

                (iii)   To include any material  information with respect to the
                        plan of  distribution  not  previously  disclosed in the
                        registration  statement or any  material  change to such
                        information in the registration statement;

Provided,  however, that paragraphs (a) (1) (i) and (a) (1) (ii) do not apply if
the information  required to be included in a post-effective  amendment by those
paragraphs  is contained in periodic  reports filed with or furnished to the SEC
by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference in the registration statement.

        (2)     That,  for the purpose of  determining  any liability  under the
                Securities Act of 1933, each such post-effective amendment shall
                be deemed to be a new  registration  statement  relating  to the
                securities offered therein,  and the offering of such securities
                at that  time  shall  be  deemed  to be the  initial  bona  fide
                offering thereof.

        (3)     To  remove  from  registration  by  means  of  a  post-effective
                amendment any of the securities  being  registered  which remain
                unsold at the termination of the offering.

(b)     The  undersigned  registrant  hereby  undertakes  that,  for purposes of
        determining  any liability under the Securities Act of 1933, each filing
        of the  registrant's  annual report pursuant to Section 13(a) or Section
        15(d) of the  Securities  Exchange Act of 1934 that is  incorporated  by
        reference  in the  registration  statement  shall be  deemed to be a new
        registration  statement relating to the securities offered therein,  and
        the offering of such  securities  at that time shall be deemed to be the
        initial bona fide offering thereof.

(c)     The  undersigned   Registrant  hereby   undertakes,   that,  insofar  as
        indemnification  for liabilities arising under the Securities Act may be
        permitted  to  directors,   officers  and  controlling  persons  of  the
        Registrant  pursuant to the  foregoing  provisions,  or  otherwise,  the
        Registrant has been advised that in the opinion of the  Commission  such
        indemnification  is against

                                       27
public  policy as expressed  in the  Securities  Act and is,  therefore,
        unenforceable.  In the event  that a claim for  indemnification  against
        such  liabilities  (other than the payment by the Registrant of expenses
        incurred or paid by a  director,  officer or  controlling  person of the
        Registrant in the successful defense of any action,  suit or proceeding)
        is  asserted  by  such  director,   officer  or  controlling  person  in
        connection with the securities  being  registered,  the Registrant will,
        unless in the  opinion of its  counsel  the  matter has been  settled by
        controlling precedent, submit to a court of appropriate jurisdiction the
        question whether such  indemnification by it is against public policy as
        expressed  in the  Securities  Act and  will be  governed  by the  final
        adjudication of such issue.

                                       28
SIGNATURES

        Pursuant to the  requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the  requirements  for  filing  on  Form  S-8 and has  duly  caused  this
Registration Statement to be signed on its behalf by the undersigned,  thereunto
duly authorized, in the City of Sioux Falls, State of South Dakota, on this 28th
day of January, 2005.

                                      NorthWestern Corporation
                                      By: /s/ GARY G. DROOK
                                          -----------------
                                          Name:  Gary G. Drook
                                          President and Chief Executive Officer

                                POWER OF ATTORNEY

        Each  person  whose  signature  appears  below  hereby  constitutes  and
appoints  Gary G.  Drook the true and lawful  attorney-in-fact  and agent of the
undersigned, with full power of substitution and re-substitution, for and in the
name, place and stead of the undersigned, in any and all capacities, to sign any
and all amendments  (including  post-effective  amendments) to this Registration
Statement  (or any  registration  statement  for the same offering that is to be
effective upon filing  pursuant to Rule 462(b) under the Securities Act of 1933)
and to cause the same to be filed, with all exhibits thereto and other documents
in connection  therewith,  with the Securities and Exchange  Commission,  hereby
granting to said  attorney-in-fact  and agent full power and authority to do and
perform  each and every act and thing  whatsoever  requisite  or desirable to be
done in and about the  premises,  as fully to all  intents  and  purposes as the
undersigned  might or could do in person,  hereby  ratifying and  confirming all
acts and things that said  attorney-in-fact  and agent, or his  substitute,  may
lawfully do or cause to be done by virtue hereof.

        Pursuant  to the  requirements  of the  Securities  Act  of  1933,  this
Registration  Statement  has been signed below by the  following  persons in the
capacities and on the dates indicated.

Signature                 Title                           Date
---------                 -----                           ----

/s/ GARY G. DROOK         President and Chief Executive   January 28, 2005
-----------------         Officer, Director
Gary G. Drook

/s/ BRIAN B. BIRD         Chief Financial Officer         January 28, 2005
-----------------
Brian B. Bird

/s/ KENDALL G. KLIEWER    Controller                      January 28, 2005
----------------------
Kendall G. Kliewer

/s/ E. LINN DRAPER, JR.   Chairman of the Board of        January 28, 2005
----------------------    Directors
E. Linn Draper, Jr.

/s/ STEPHEN P. ADIK       Director                        January 28, 2005
-------------------
Stephen P. Adik

/s/ JON S. FOSSEL         Director                        January 28, 2005
-----------------

                                       29
Jon S. Fossel

/s/ JULIA L. JOHNSON      Director                        January 28, 2005
--------------------
Julia L. Johnson

/s/ CORBIN A. MCNEILL JR  Director                        January 28, 2005
---------------------
Corbin A. McNeill, Jr.

/s/ PHILIP L. MASLOWE     Director                        January 28, 2005
---------------------
Philip L. Maslowe

                                INDEX TO EXHIBITS

Exhibit
No.             Description
---             -----------

3.1             NorthWestern   Corporation   2004  Special   Recognition   Grant
                Restricted Stock Plan.*

3.2             Amended   and   Restated   Certificate   of   Incorporation   of
                NorthWestern Corporation, dated October 15, 2004.*

3.3             Amended  and  Restated  Bylaws of  NorthWestern  Corporation,  a
                Delaware Corporation, dated October 15, 2004.*

4.1             Specimen Share Certificate.*

5.1             Opinion of NorthWestern Corporation's General Counsel (Thomas J.
                Knapp,  Esq.)  regarding the legality of the  restricted  Common
                Shares being registered.*

23.1            Consent of Deloitte & Touche LLP.*

23.2            Consent of NorthWestern Corporation (included in Exhibit 5.1).*

24.1            Power of Attorney (included on signature page hereto).*

99.1            Form  of  Award  under  the  2004  Special   Recognition   Grant
                Restricted Stock Plan.*

* Filed Herewith

                                       30