EIGHTH SUPPLEMENTAL INDENTURE

THIS EIGHTH SUPPLEMENTAL INDENTURE, dated as of May 1, 2008 (the “Supplemental Indenture”), is made by and between NORTHWESTERN CORPORATION (formerly known as NorthWestern Public Service Company), a corporation organized and existing under the laws of the State of Delaware (the “Company”), the post office address of which is 3010 West 69th Street, Sioux Falls, South Dakota 57108, and THE BANK OF NEW YORK (successor to JPMorgan Chase Bank, N.A. (successor by merger to The Chase Manhattan Bank (National Association))), (the “Trustee”), as Trustee under the General Mortgage Indenture and Deed of Trust dated as of August 1, 1993, hereinafter mentioned, the post office address of which is 101 Barclay Street, New York, New York 10286;

WHEREAS, the Company has heretofore executed and delivered its General Mortgage Indenture and Deed of Trust dated as of August 1, 1993 (the “Original Indenture”), to the Trustee, for the security of the Bonds of the Company issued and to be issued thereunder (the “Bonds”); and

WHEREAS, the Company has heretofore executed and delivered to the Trustee seven indentures supplemental to the Original Indenture, the first dated as of August 15, 1993, the second dated as of August 1, 1995, each of the third, fourth and fifth dated as of September 1, 1995, the sixth dated as of February 1, 2003, and the seventh dated as of November 1, 2004 (the Original Indenture, as supplemented and amended by the aforementioned seven supplemental indentures and by this Supplemental Indenture, being hereinafter referred to as the “ Indenture ”); and

WHEREAS, the Company desires to create a new series of Bonds to be issued under the Indenture, to be known as First Mortgage Bonds, 6.05% Series due 2018 (the “First Mortgage Bonds of the 6.05% Series”), which First Mortgage Bonds of the 6.05% Series are to be issued on the basis of Retired Bonds pursuant to Section 4.04 of the Indenture; and

WHEREAS, the Company, in the exercise of the powers and authority conferred upon and reserved to it under the provisions of the Indenture, and pursuant to appropriate resolutions of the Board of Directors, has duly resolved and determined to make, execute and deliver to the Trustee a Supplemental Indenture in the form hereof for the purposes herein provided; and

WHEREAS, all conditions and requirements necessary to make this Supplemental Indenture a valid, binding and legal instrument have been done, performed and fulfilled and the execution and delivery hereof have been in all respects duly authorized;

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

THAT the Company, in consideration of the acceptance or the purchase and ownership (as applicable) from time to time of the First Mortgage Bonds of the 6.05% Series and the service by the Trustee and its successors, under the Indenture and of One Dollar to it, duly paid by the Trustee at or before the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, hereby covenants and agrees to and with the Trustee and its successors in the trust under the Indenture, for the benefit of those who shall hold the Bonds as follows:

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ARTICLE I.

DESCRIPTION OF FIRST MORTGAGE BONDS, 6.05% SERIES DUE 2018

Section 1.           The Company hereby creates a new series of Bonds to be known as “First Mortgage Bonds, 6.05% Series due 2018.” The First Mortgage Bonds of the 6.05% Series shall be executed, authenticated and delivered in accordance with the provisions of, and shall in all respects be subject to, all of the terms, conditions and covenants of the Indenture, as supplemented and modified. The aggregate principal amount of First Mortgage Bonds of the 6.05% Series, which may be authenticated and delivered under the Indenture (except for First Mortgage Bonds of the 6.05% Series authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other First Mortgage Bonds of the 6.05% Series pursuant to the Indenture and except for First Mortgage Bonds of the 6.05% Series which, pursuant to the Indenture, are deemed never to have been authenticated and delivered under the Indenture) is limited to $55,000,000.

The commencement of the first interest period for the First Mortgage Bonds of the 6.05% Series shall be May 1, 2008. The First Mortgage Bonds of the 6.05% Series shall mature on May 1, 2018, and shall bear interest at the rate of 6.05% per annum, from May, 1 2008 or from the most recent date to which interest has been paid or duly provided for, payable semi-annually on the first day of May and the first day of November (each, an “Interest Payment Date”) in each year, commencing November 1, 2008. Any interest on any First Mortgage Bond of the 6.05% Series which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name such First Mortgage Bond of the 6.05% Series (or one or more Predecessor Bonds) is registered at the close of business on the April fifteenth or October fifteenth, as the case may be (whether or not a Business Day) next preceding such Interest Payment Date. The First Mortgage Bonds of the 6.05% Series shall bear interest at the Default Rate under the circumstances set forth in the form of such Bond set forth in Section 3 of this Article I.

Section 2.           The First Mortgage Bonds of the 6.05% Series shall be issued only as registered Bonds without coupons of the denomination of $1,000, or any integral multiple of$1 in excess of $1,000, appropriately numbered. The First Mortgage Bonds of the 6.05% Series may be exchanged, upon surrender thereof, at the office or agency of the Company in the Borough of Manhattan, The City of New York, State of New York, for one or more First Mortgage Bonds of the 6.05% Series of other authorized denominations, for the same aggregate principal amount, subject to the terms and conditions set forth in the Indenture.

First Mortgage Bonds of the 6.05% Series may be exchanged or transferred without expense to the registered owner thereof except that any taxes or other governmental charges required to be paid with respect to such transfer or exchange shall be paid by the registered owner requesting such transfer or exchange as a condition precedent to the exercise of such privilege, other than exchanges pursuant to Section 3.04, 5.06 or 14.06 of the Indenture, not involving any transfer.

The Trustee shall not register the transfer of any First Mortgage Bond of the 6.05% Series unless it receives a certificate in the form attached hereto as Appendix A.

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The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under applicable law or under this Supplemental Indenture with respect to any transfer of any interest in a First Mortgage Bond of the 6.05% Series other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Supplemental Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

Section 3.           The First Mortgage Bonds of the 6.05% Series and the Trustee’s Certificate of Authentication shall be substantially in the following forms respectively:

[Remainder of page Intentionally Blank]

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[FORM OF BOND OF THE 6.05% SERIES DUE 2018]

THIS BOND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) AND MAY NOT BE OFFERED, SOLD, ASSIGNED, TRANSFERRED OR PLEDGED UNLESS REGISTERED PURSUANT TO THE PROVISIONS OF SUCH ACT OR AN EXEMPTION THEREFROM IS AVAILABLE, EXCEPT UNDER CIRCUMSTANCES WHERE NEITHER SUCH REGISTRATION NOR SUCH AN EXEMPTION IS REQUIRED BY LAW.

NORTHWESTERN CORPORATION

(Incorporated under the laws of the State of Delaware)

FIRST MORTGAGE BOND, 6.05% SERIES DUE 2018

FOR VALUE RECEIVED , the undersigned, NorthWestern Corporation, (herein called the “Company,” which term shall include any Successor Corporation, as defined in the Indenture hereinafter referred to), a corporation organized and existing under the laws of the State of Delaware, hereby promises to pay to [____________], or registered assigns, the principal sum of [_____________________] DOLLARS (or so much thereof as shall not have been redeemed) on May 1, 2018, with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance hereof at the rate of 6.05% per annum from May 1, 2008, or from the most recent date to which interest has been paid or duly provided for, payable semiannually, on the first day of May and November in each year, commencing November 1, 2008, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, on any overdue payment of interest and, during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make-Whole Amount, at a rate per annum from time to time equal to the greater of (i) Interest Rate plus 2% or (ii) 2% over the rate of interest publicly announced by The Bank of New York from time to time in New York, New York as its “base” or “prime” rate, payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand). Reference is hereby made to the further provisions of this First Mortgage Bond set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION]

This is one of the Bonds of the series designated therein referred to in the within-mentioned Indenture and Supplemental Indenture dated as of May 1, 2008.

THE BANK OF NEW YORK,

AS TRUSTEE

By                                                                      

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Payments of principal of, interest on and any Make-Whole Amount with respect to this First Mortgage Bond are to be made in lawful money of the United States of America at The Bank of New York in New York, New York or at such other place as the Company shall have designated by written notice to the holder of this First Mortgage Bond. Any interest on this First Mortgage Bond which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name this First Mortgage Bond (or one or more Predecessor Bonds) is registered at the close of business on the April fifteenth or October fifteenth, as the case may be (whether or not a Business Day) next preceding such Interest Payment Date.

This First Mortgage Bond is one of a series of First Mortgage Bonds, 6.05% Series due 2018 (herein called the “First Mortgage Bonds” ) issued pursuant to the Eighth Supplemental Indenture dated as of May 1, 2008 (as from time to time amended, the “Supplemental Indenture” ), between the Company and the Trustee named therein which amends and supplements the General Mortgage Indenture and Deed of Trust dated as of August 1, 1993, executed by the Company (under its then name, NorthWestern Public Services Company) to The Chase Manhattan Bank (National Association), the predecessor to The Bank of New York, as Trustee (the “ Trustee ”) (as amended and supplemented from time to time, the “Indenture” ) to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the properties mortgaged and pledged, the nature and extent of the security, the rights of registered owners of the Bonds and of the Trustee in respect thereof, and the terms and conditions upon which the Bonds are, and are to be, secured. The Bonds may be issued in series, for various principal sums, may mature at different times, may bear interest at different rates and may otherwise vary as provided in the Indenture. The First Mortgage Bonds are also entitled to the benefits thereof and the Bond Purchase Agreement dated as of May 1, 2008 between the Company and the purchasers listed in Schedule A thereto (the “Bond Purchase Agreement” ). Each holder of this First Mortgage Bond will be deemed, by its acceptance hereof, to have made the representation set forth in Section 6.2 of the Bond Purchase Agreement. Unless otherwise indicated, capitalized terms used in this First Mortgage Bond shall have the respective meanings ascribed to such terms in the Supplemental Indenture.

This First Mortgage Bond is a registered First Mortgage Bond and, as provided in Section 3.05 of the Indenture but subject to the provisions of the Supplemental Indenture, upon surrender of this First Mortgage Bond for registration of transfer accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new First Mortgage Bond for a like principal amount will be issued to, and registered in the name of, the transferee. The Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this First Mortgage Bond is registered as the absolute owner hereof for the purpose of receiving payment and for all other purposes, and neither the Company, the Trustee nor any agent of the Company or the Trustee will be affected by any notice to the contrary.

This First Mortgage Bond is subject to optional redemption, in whole or from time to time in part, at the times and on the terms specified in the Supplemental Indenture, but not otherwise.

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If an Event of Default occurs and is continuing, the principal of this First Mortgage Bond may be declared or otherwise become due and payable in the manner and upon the conditions provided for in the Indenture, at the price equal to the outstanding principal amount thereof, together with interest accrued on such principal amount.

This Bond shall not be entitled to any benefit under the Indenture or any indenture supplemental thereto, or become valid or obligatory for any purpose, until the form of certificate endorsed hereon shall have been signed by or on behalf of The Bank of New York, the Trustee under the Indenture, or a successor trustee thereto under the Indenture, or by an authenticating agent duly appointed by the Trustee in accordance with the terms of the Indenture.

IN WITNESSETH WHEREOF, NorthWestern Corporation has caused this First Mortgage Bond to be signed (manually or by facsimile signature) in its name by an Authorized Executive Officer, as defined in the Indenture, and its corporate seal (or a facsimile thereof) to be hereto affixed and attested (manually or by facsimile signature) by an Authorized Executive Officer, as defined in the Indenture.

Dated:

NORTHWESTERN CORPORATION

BY                                                                    

Authorized Executive Officer

ATTEST:

By_________________________________

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ARTICLE II.

ISSUE OF FIRST MORTGAGE BONDS OF THE 6.05% SERIES

Section 1.          The Company hereby exercises the right to obtain the authentication of $55,000,000 principal amount of Bonds pursuant to the terms of Section 4.04 of the Indenture. All such Bonds shall be First Mortgage Bonds of the 6.05% Series.

Section 2.           Such First Mortgage Bonds of the 6.05% Series may be authenticated and delivered prior to the filing for recordation of this Supplemental Indenture.

ARTICLE III.

REDEMPTION

Section 1.          Whenever the Company shall propose to redeem less than all of the Outstanding First Mortgage Bonds of the 6.05% Series on any Redemption Date, the Bond Registrar, instead of selecting by lot, shall select the serial numbers of the First Mortgage Bonds of the 6.05% Series to be redeemed (in whole or in part) by prorating, as nearly as may be, the aggregate principal amount of the First Mortgage Bonds of the 6.05% Series to be redeemed among the registered owners of the First Mortgage Bonds of the 6.05% Series according to the principal amount thereof registered in their respective names. In any such pro ration, the Bond Registrar shall make such adjustments, reallocations and eliminations as it shall deem proper to the end that the principal amount of the First Mortgage Bonds of the 6.05% Series so prorated to any registered owner of the First Mortgage Bonds of the 6.05% Series shall be $1,000 or an integral multiple of $1 in excess thereof, by increasing or decreasing or eliminating the amount which would be allocable to any such registered owner on the basis of exact proportion by an amount not exceeding $1. The Bond Registrar in its discretion may determine the particular First Mortgage Bonds of the 6.05% Series (if there are more than one) registered in the name of any registered owner which are to be redeemed, in whole or in part. In any determination by pro ration pursuant to this Section, First Mortgage Bonds of the 6.05% Series registered in the name of the Company shall not be considered Outstanding and shall be excluded in making the determination of the First Mortgage Bonds of the 6.05% Series to be redeemed.

Notice of redemption of any First Mortgage Bonds of the 6.05% Series shall be given as provided in Section 5.04 of the Original Indenture. If given by mail, the mailing of such notice shall be a condition precedent to redemption, provided that any notice which is mailed in the manner provided in Section 5.04 of the Original Indenture shall be conclusively presumed to have been duly given whether or not the Holders receive such notice, and failure to give such notice by mail, or any defect in such notice, to the Holder of any such Bond designated for redemption in whole or in part shall not affect the validity of the redemption of any other such Bond.

Except for the determination of the