NorthWestern (NWE) 30 Oct 242024 Q3 Earnings call transcript

Good afternoon, and thank you for joining NorthWestern Energy Group's Financial Results webcast for the quarter ended September 30, 2024. My name is Travis Meyer. I'm the Director of Corporate Development and Investor Relations Officer.

Joining us today to walk you through the results and provide an overall update are Brian Bird, President and Chief Executive Officer; and Crystal Lail, Chief Financial Officer. [Operator Instructions] NorthWestern's results have been released, and the release is available on our website at northwesternenergy.com.

XX-Q our released also pre-market. We

that So presentation, contain press this company's by please forward-looking presenters may note comments questions and release, your the responses statements. to

SEC replay of p.m. The webcast being the be webcast such, non-GAAP I'll The archived on included presentation disclosures, to year section see also X:XX is includes available hand be slide also at found Results reconciliations contained over As non-GAAP X that, Brian Eastern you today's presentation. Please for second our the Financial recorded. included to definitions will this presentation. this can website. With for direct within of harbor the and I'll remarks. the our in in his beginning the note, filings the and opening of provisions financial and safe Please disclosures the presentation measures.

Travis. Thanks,

quickly Just EPS the $X.XX for on highlights. GAAP $X.XX. reported recent non-GAAP of diluted real We of EPS and the quarter had diluted

our shares transmission In available per Of We long-term X-year Grid Plains XXXX, the for of to in which per $XX Yellowstone of We're XX, North for that Colstrip System December Energy declared to million our reaffirming XXXX project, X%. From a of investment of in $X.XX U.S. also as August grant targets to $XXX Montana million base Innovation record NorthWestern Resilience December that in and million County included line. $X.XX interim October. a our Generating Partnership are and customers upgrades. delay earmarked of Consortium rate light million, in began Station non-GAAP perspective, of awarded share rate or earnings the the $XX Connector revising share X% serving $XX to $X.XX payable Department rates. GRIP to guidance growth XXXX, dividend EPS shareholders XXXX. XX,

a electrification, X% Crystal top terms over generating of a on transmission I'm a page, addition And service rate growth capacity yield. economic growth that, to some next ultimately it total territories, to power with incremental The provide provides the existing in providing believe just XX-plus turn total approximately going about our X% look development X% proposition, exploring of line. activity X% of in we load side either trading to some XX% incremental That, can still business, QF value FERC today, that, you or to an growth on agreements continue total in of to EPS from providing our ability combined to that Northwestern's that Turning we're consider for results. we're financial proposition. When talk supporting QX and at to a buyouts. possible purchase agreements, perspective proposition. With to the

for with financial I In Thank performance you, today, our our discuss XXXX. my Brian. the third for will quarter combined remainder of outlook comments the

As for $XX.X or the million quarter. Brian mentioned, GAAP share prior or million the per quarter $XX.X for compares share $X.XX $X.XX net with income of per

bit Moving detail. Slide provide to a X to more

due by and costs analysis, higher strength driven to the transmission tax As This was you continued GAAP benefit. these growth offsetting review can primarily was insurance outcomes, earnings by there rate coverage. from earnings grew income quarter-over-quarter Partially and revenues wildfire items see $X.XX. an

harbor in seen utilities, for our our IRS year, all you on through jurisdictions. of a gas broadly we heard final each well safe issuing due repairs. recorded in business, assumptions are method, quarter. income higher a benefit I coverage and flow renewed certainly benefit. is more the of on in expected impacts the period. A the Many $X bit to the wildfire, the think depreciation you've million interest earnings, the from in line particularly we that our that tax the the tax costs It probably reported original as of for also the at certainly on know costs operate were during our our And and increasing guidance applying we've to

we to to are this adjusting relates periods XXXX, amount this As out. prior prior

the the touched XX. earnings again, the the regulatory which is on drivers see margin repair to primary quarter, of case more in last $X.XX the you outcomes Slide $X.XX year. So closing things see the natural the bit electric tax the over earnings there the in remove bridge this you of the below impact The $X.XX driving detail ongoing gas on on execution, we've period, you of can on when are as drivers quarter, Montana that and prior quarter. A before, benefit, at in for would impact

As November X. a final reminder, rates were implemented

along the you we've transmission see revenues. our in with in is prior interim QX year improvement this lift case, here, rates what And the there, of of a year our the were then growth time had impacting place in acknowledging off South electric rate continued at what period. the Dakota full also So

Slide a to on we're provide Moving focus XX. adjusting clear earnings. our We where

weather in $X.XX, So gas compares significant weather offsetting and a see reflecting reducing were amount. amount safe the QX matters the net you most can are with other repairs income for harbor our XXXX, the adjustments adjustment QX in This with $X.XX of adjustment XXXX. for of

slide -- those earnings our the on prior period results you of from that results basis. in on $X.XX look adjusted at mentioned So the in the or $X.XX versus prior an when prior that adjusted X the

XX. Moving to Slide

to XXXX of updated credit second executed steady in on shown our the debt early quarter our financing ratings. call, metrics had in improvement we our ongoing we FFO to plan you our and importance have that As and

plans. continue Our our capital in no equity expect we unchanged, current and to remain plans

Slide about update thinking the of XX, I'll why an XXXX. we're remainder provide Moving on to

year-to-date the performance for are consistent and our Importantly, expectations. our financial with quarter

of election of our interim Brian our original delay $X.XX. I year, revising are was That from $X.XX framework an and we expected and as rates range rates interim mentioned, to rates revised in -- note, range our continuing navigating guidance to taken by Montana states to you to October as do capital our However, are driven our serve complex $X.XX a regulatory have and the MDU guidance a landscape states. Many what X. we guidance, of note regulatory original $X.XX as would in we a fundamental the $X.XX interim the owners. of regulatory the proceeding Montana. denial attracting the of in demonstration from framework and investment benefit is strong is Customers our of in

for the become the request perspective interim base request The rate particularly This that the in is different gas for guidance is on request our electric interim of and a part I'll hidden our includes [ deep. bit more and bit range requested a rate of rate is end, Montana differentiated, relief both upper on just bit adjustment in reflects tracker Our in amount. Providing the $X.XX a rate at end, and believe side, specifically revised request. This a a proceeding, we a have that PCCAM relief the on of our dig no case a and rate does interim, supporting not ] lower our the electric December. than includes at $X.XX separate. review base. to interim in and more where perspective gas on relief strong the We filings

bridge total the service the rate we electric is of docket. keep embedded is costs impact a perspective, bill that the in serving within do very proud request results that prior asset that to Yellowstone with treatment a recovery a thing pressure asset. From supports to downward in in generation adjustment an outcome here customers application until fair of of facility that PCCAM similar you for bridge final placing should We're mind consistent currently, an docket, request, in is determined cover in and and Importantly, a captured providing PCCAM our believe that that the into the bill total. in

rate proceeding. that bit think So we're that's request combined how provides PCCAM X% rates is provided the plus base color with electric adjustment a the a base of our and more for rate bridge. Hopefully, interim into request interim and about PCCAM approximately interim here request with thinking detail we bridge total about the rate how the

in to with no We EPS are will regulatory a us that on to outcome deliver our in of X% also enable equity needs. our growth X% of fair confident all proceedings commitment

investment unchanged. to I Montana to provide will concluding thoughts for Brian guidance our also our note and for remarks. it outcome we plan that following remain on capital reviews in XXXX plans rate rate back Our review. I'll pass

I Thanks, say guess this summary. I Crystal. go We line. just review I column, the provide rate certainly on to XX would Page by column line this. by plan don't through

following. dates this some XXXX. To XXXX, interim. Montana, procedural the with Montana and Regarding are continuing date quite around or on the having I would all outcomes sure on the cases XX -- aware, the will. Crystal day of South these the January been all mention along hearing is of you Commission to these expected and testimony is shown are both we thoughts established, in Nebraska, a on continue news X of primary is or move of And the commences of schedule XX. Obviously, associated And anticipate and understands on particular of the settling the do there quarter of filings first April interim. these well, intervenor cases that's shared you Dakota slide, I'm we I the if believe

regulated by closer compared XX% for to foremost, as and base than First XX% something rate more MDU. is of our the to MPSC

us would for far consequential credit be to a ratings. negative more So outcome similar our

in say and billion the our we've state with electric I'd requests gas, -- are made over rate for interim is of Secondly, XXXX. investment both associated and rates $X in and XXXX our

increase supports to try Montana's County pointed as approximately Station out, Regarding investment bridge customers, independence. Generating in Yellowstone believe rate, as electric of I commission net the interim the regain X%. to specifically, energy is we And our Crystal

we'll without Regarding commission gas, customers parties understands due increase rate burdensome for we all last thing will significant interim increase, understands signal frequently, turn prices. And are were bill be the I We on if due rate they Montana's they're mitigate the bills provides all NorthWestern of MPSC rate still to to will after the it rates. interim to to this smaller, involved. And you other over investment X% state, request. With this interim that for in natural interim helps and finally, of shock. reviews Everyone out an that, benefit would the increase to at closer but costly, gas frequent more their believe annually point the to that price the gas have in to about more decision not rate a questions. October are file in our the the decline consider than confident increase lower is

Brian first With Shar Guggenheim. at will Thank Crystal. we and from that, [Operator take question our Instructions] you,

I rates interim So interim with in what's assuming delays. your the numbers. I December. go sure confidence Brian, what's know impacted planning and effect there. in impacts post rates still there's for obviously, in QX? it's see further into confidence you December Montana giving the with there the the delayed And assumptions internal we but a guess not order order elections, driving can I'm now why

this. Yes. say I would

I think other the of you've X front in dealing well with, got they're filings cases with that rate as commission.

to speak can't I So the timing.

delay. made speak time and filing table on have, But Our when a in was have potentially a could still had we case, expectation October on we necessarily accepting can't last the we as caused around outcome in result, rate here. initially delay rates for interim our like the rates would that decided successful we that filing October of an had interim delay a initially outcome Obviously, interim that decisions. thought been even rates. I in a we with our the

filing it. can't Crystal reasons, for and I good accepted pointed speak I pointed out be our I as out So rate is. do should very the interim why very, as feel to reasons the

of it. nature embedded really of rate the related makes the at my about be supply from similar And gas commission bill a Yellowstone, request and pass-through today Montana and of in have piece they're to to natural but customers considerations makes the that too requests. to would up materials, what thinking the signal different more the a review, request rate that for PCCAM is is And only they I there's decrease the plant a the the that detail, how trying add on up supporting in reset time of that. In a the serving of to our into bill one is into Shar, and the can request on and a the of an the interim I what sending and that about will supporting more detail supply being different, they MDU investment But our interim just much obviously, bit go the our of show bit go process, in comments those we request. customers maybe how granularity on given think taken house. portion, you side -- of appendix base a portion give electric side same But through devil

think that's will making in in commission significant the confidence that those I our our So factors a piece consider of case. a all decision

commission it. that. it's helpful. appreciate thing That's there. And the -- on capital right hopefully, does the impacting Got because And certainly It's I cost just upside opportunities. the the then just of

You PPA guys incremental generation, think 'XX see I for about of other outside time. could have we plan, transmission of this opportunities? for and right? RFPs CapEx like what's we your So the in had back holding buckets buckets buyouts current winning how the some the when should guess, through sort

to on take fair we're fronts and things these originally than time of more say, that on number it's just on I a Shar, in maybe considered. working process things think

So front. on we're generation and tuned. the working on in on We're things working transmission the front stay things

All right.

will question Ellinghaus We Chris take our at Siebert next Williams. from

you shouldn't notification commissions -- you they or when opposite take notice have a some to to there is to for for make of proceed to something, a request or give cases, So to construct direction, of a you of might at if something notices need to kind up? get when intent some a shouldn't have deadline rate sense they in of something you you get file date the kind least have have

Chris. one thing, Well,

rates very come our filings at be days, deadline in one that it rates. we'll we year make I XX clear here, uphold. years I've different can this did interim That's we in certainly points historically XXX the think after I through implementing have time. believe, been

Our speak here. to that belief, know and have review the similar with place But last been would I I we though, the was the put past. do can't that reasonable we've had process in outcomes interim something and timing in last had recently, more rate different the rules the -- rate review, in terms October frequent here, but expected to rates timing the a of associated more expectation. of the

Right.

really all, the like if the when the of interim good sort parts they Brian, of Do and rates this do alluded So sort recognize yield, of about and have that we're are. some to they profile also total that of. you they XX% they talking see have But a plus a X% profile. XX% comprehension logic stock, and Yellowstone total of should point shouldn't an at the return at they you return interest at and look where

So appreciate reflecting the Commission? the not stock Montana think that they is upon do that you also well

a others go, understand having expect versus that perspective, on have as I underperforming at is individual to commissioners. for I'd can't not far do a least dividend yield dividend others. our as I'd speak stock yield X% when a should Chris. They That's dividend closer high. yield that

Okay.

strike lower data in good like I responses us we at customers. cost middle of invest cost to capital less of capital. should our performance customers, your commission because -- making in the cetera, we're given a of on, shareholders of on capital case need case question cost be customers that inverse a We higher in means of that Shar capital. that folks and as seen cost that to And of price of regulatory is data do our able add Montana. to testimony, reasonable such and and time, I asking make our of can't make cost price stock lower you providing we're the the earlier obviously, alluded that for that decisions. And we'll states to request give myself, a to request same to spades were comments direction. And and Shar's et customers in understand decision of balance and good to folks in on say a a for do just in you for go relative impact ultimately acknowledgment for return when that the a contract think stock the I'll help that we've it's good Chris, so And what's for responses, cost you're to strong The continue our and capital. comments higher

company long if add, very also very, Chris, been time. I'll you've a covering for this

You as a had for improved, we will our of recall, commission to profile. when financial actually, post-bankruptcy higher. of the are we a from And over picture, demonstrate XX went could financial ago, strong our years that perspective the down costs didn't cost when cost have capital we stronger that, customers, capital in fact, ratings a

also turns commission. it's You understand elected because the commission that though over

commissioners of longer there, those that history. no aware are be may So not

So them. educate it's on us to certainly

harder -- on the to this that point but have equity Crystal, in certainly towards would debt, in doesn't I events effect towards the maybe things that Yes. certainly to XXX relative run, this think, cost it's of help. peers cost of increase basis the like point point could the short a you

points wanted North got got of good you've sense when have kind you or can of Plains So there? some there. I update, ask about Have resolution you give pretty you data us a the Connector. any to might any

certainly are I Connector. with at this, Plains positioned would say well we North Colstrip

know, Plains to obviously, as certainly the with Connector of east North the we sense. utilities position west the utilities relationships our have good with we makes to I think us. have us, markets good of to As develop, good you the continue relationships And on

at We're United interests serious. definitely are talking folks that it. about taking our there. We're evaluating So we with Grid the

you to coming clock close standpoint last when starts that might influenced cycle. consideration complete, the that on election interim the here I of partly pretty might be interim the once that the one begin? mentioned And a Do That's a political soon. Okay. think from is election sort by question.

I Chris. would just this, say

We requests exchanging have staff PSC with others. been and both data

So that's from where timing they're our moving clearest a of indicator perspective.

they're to on as work their very So we key an up piece timing. what of interim wrapping have that's a recommendation. see do indication, we close I think And

rates a in you data expect your clock received, with there on little I started this sometime be the the we Interim a is is off that request to we've different. of question docket thing? tell shot You indications based November. on it bit But would

We'll from or Barclays. Campanella Nick maybe like Nathan. It call at take sounds our next Yes. Richard

Nick. Nathan Yes. on It's for actually

of debt minimums? feel end And to FFO in this your in meeting comfortable do given delay towards the is how rates? So trending the you year

great XXXX, a made very a our I will probably in and And from we above That's have about range. mentioned any certainly is that have middle inbound. that I downside we end we've good in range. to relief rate you back Nathan. no revised at numerator, the cash sensitive solidifying imagine, are be XXXX. threshold We as about in reflects interim And With rate might forecast of some And and the the downside interim but outlook, guidance on strides expected be here still need fall our our question, of credit should relief this range for without we that metrics rate we while to now, as noted would below our good important quite low I say relief. wouldn't perspective, and where the kind think thresholds. our as as

months no Brian XXXX likely of below while slightly downside which first Chris' is X will relief in shot in I we put in acknowledge not during clock XXXX the our as XXX-day for that the would threshold would would I'm us the questions, rate earliest guidance, response to mention, thing other that XXXX, some not The XXXX mentioned giving the leave I of well. of interim just rates

would recover staff to to the are impact case this invested making Montana that much certainly from we we and the on cash impact asking 'XX in and support commission significant impacts have of that but and receive perspective, stay metrics, and metrics a credit our to us we to question So if the threshold, side relief. good for sure above credit and the we a no interim from it's capital a we significant of 'XX need you're to perspective need credit make the rate need both to to State downside numerator have

opportunity sense. the should makes That one Yellowstone updating more. of shortly? the a coming be generation and Got you lot And and just on It. have that that now IRP plan rates you Do or

needs time IRP level perspective. I from think basis, what's is going-forward the continue our federal of Obviously, state watch XXXX line but current happening to still a and XXXX on plans. the at we is an both in terms

All right.

will I'm Julian guessing. We teammates, call his one or next at from Julian, Jefferies. take our of

It's on Julian. Brian Russo for

the growth there update the event So and GHG. is that Colstrip position on are the retired, things you short in retiring? how the And charts? just your what that for that CapEx -- going your referenced think the should or on that MATS Colstrip EPA, what And you will any EPA and retrofitting impact does we rules, incremental where look be? upside forward it net or do in are

Yes.

to we in think issue. well. effect, there. We move the to fight in an -- rules heck forward provide, litigation to fact, required a are, stay in MATS others with be perspective, from baghouse could need assuming a an that, impact We're know, we're you more to have involved of then will next and order make a original in the lot And megawatts with Montana. obviously, baghouse. need I going essence, to XXX around certainly, in believe decisions of week investment if, as that on We're continue think the again, megawatts steps going serve to MATS I associated there, in a XXX customers in to

a on basis. I And can comfortable that's so the that and we get commission going-forward with something hope

Great.

to one interesting. It's your take to thing GHG. Back Brian, --

those have Colstrip. on with knows, well an I our something everyone the of eye GHG be we'll as in those struggle keep litigation closely. rules, but clearly a following investment Obviously, rules, we'll around there's quite bit that think from continue I to too. it's to

Dylan queue And Thalman. at our call is from Ladenburg the next in

It's a question.

consider bearing the the on is Colstrip? a of investors outcome future of election operation the having should So

it -- an operations in the context. would think I have put this on Certainly, the federal elections could impact I have of Colstrip.

the what's the to required to the run the to plant. think continuing and I associated plant costs ultimate operate with continue

I with concerned associated I'm elections the that. about less think in-state that

I within the amount think Colstrip. tremendous seen we've state legislatively support of regarding

federal And at point. this the so I'm certainly election more concerned about

-- guys in you like invest Do would invest for to do that guys? a baghouse an have on say, And Colstrip. what you you cost run estimated

the been preliminary us this terms at too of There's that to associated analysis It's for numbers with in provide cost. cost early point in time.

I at think but early million X still we've still $XXX terms in -- ultimate shared historically the for evaluation our is baghouses under innings, where we're Colstrip. it's that's And of number costs, today. and

right. All

is Our from the in at question next Mizuho. Anthony Crowdell queue

large on to project type maybe a from I on you about rolls and then it need that talked of certainty would to the embark guys rates, baghouse interim capital before that just a you I with would Commission together. maybe also guess the Montana on of you what the guess, baghouse? question the see

rate our there's for it. that of cost think us indication very will considerations a support their part I of and as Obviously, good existing review, give Colstrip. around

that, And so we time. at see about more after it can we talk that

And did night. last win then that Yankees the seems -- it

happen. that Yogi the comments all use I up like a again if with Charles' it didn't think last for Berra rates, and So question first over looking were quote. deja I case, with we seems It could following vu the retroactive on

in rolling with as forward understand get happen hope looks maybe just we you're capital they capital air in state forward XX% or interim before for and companies how the the spending company Montana, the plan? in instituted. But capital you much flex another the company's their up to plan they year-end, your more given hope increase I plan, X they capital rates, on could us in is we're but maybe that's that Here, lower maybe supportive

that's questions. good Anthony,

last You this. call, had question last I'd too. the the on say

dollars. XX% not think We've our electricity be if the be state if great provides state, in we're investing And that exposed investment. to our strong get making to going the good getting they customers that you be want utility the if better the support from And if wants the signals space, be to a that don't, should not our of be energy that investing you Energy. investment. And I should very be independent. energy market, is that's we're commission in will T&D decision to independent, not they Northwestern indication we support the where more to had

in customers think there's and willing to a is our I much in to crucial we're on for the going determine basis. commission how So going point reacts time how generation to forward a that invest

All for closing have back it I'll hand right. we and exhausted the queue, With that, Brian any to remarks.

great I investment have be today. in to we serving we're We whatever our to to do replace you're from the the the to from appreciate, customers. Thank obviously, have certainly is concerns going ultimately, make Commission. and appreciate you. been terms Montana decision investments right our And reiterating would order we And customers this your and of outcomes benefit Colstrip to trying today of I a back in certainly there, the questions look we the today. County, Certainly, But hydro from we're what we have sometime signals standpoint term. be investor I for with we again, to have I've future those I want those resources. And want decisions. seen commission XX% think the company what what for without think doing customers. the with something commission decisions forward. to the Yellowstone the those resource I make great right, in similar doing Colstrip, make support long in