NorthWestern Energy Group, Inc. Q4 FY2024 earnings call

• Critical infrastructure: Maintained safe and reliable service, reached new all-time winter and summer electric peaks in Montana, completed over $550M in capital investment, acquired Energy West and Cut Bank Gas assets, and announced regional transmission expansion.
• Regulatory and operational: Filed rate reviews across jurisdictions, refreshed wildfire mitigation plan, implemented public safety power shut-off plan.
• Financial: Reported diluted GAAP EPS of $3.65, affirmed 4%-6% long-term EPS and rate base target growth rates, increased quarterly dividend by 1.5% to $0.66 per share, and outlined a $2.74B five-year cap plan.
• Incremental opportunities: Discussed data centers, large load customers, and regional transmission projects like NorthPlains Connector, with potential to drive EPS growth above 6%.

In 2024, NorthWestern Corporation reported Q4 GAAP earnings of $1.31 compared to $1.37 in 2023. Full-year GAAP EPS was $3.65 versus $3.22. Q4 2024 results were in line with expectations except for the impact of mild weather. Adjusting for weather and tax items, Q4 2024 had an adjusted earnings of $1.13 compared to $1.38 in the prior period. The company maintained safe and reliable service while making over $550 million in capital investments, including the online Yellowstone County generating station, and announced a $2.74 billion five-year cap plan, an 11% increase over prior plans.

• Affirmed long-term EPS and rate base target growth rates of 4% to 6%.
• Increased quarterly dividend to $0.66 per share payable March 31, 2025.
• Announced a $2.74 billion five-year cap plan, an 11% increase over prior plans.
• Delayed rolling out 2025 guidance until outcome of Montana rate review is known.

• Lack of interim rate support in Montana impacted 2024 earnings, with historic rate making causing regulatory lag.
• Strict liability issues in wildfire legislation being considered by Montana and South Dakota legislatures pose potential challenges.
• Regulatory lag in rate making, which could affect the ability to earn authorized returns in a timely manner.

Q: How does 2024 being the base period for growth rates factor in, and how do incremental opportunities like data centers impact earnings?

A: Crystal Lail stated there's no magic to 2024 being the base period other than it being the most recent concluded period. Incremental opportunities like data centers are seen as potentially pushing earnings upward in the growth rate. Brian Bird added that a better interim rate outcome would ease the growth path.

Q: What are the near-term milestones for the NorthPlains Connector project?

A: Brian Bird said the main thing in 2025 is moving from LOI to commercial agreements, aiming for mid-year to third quarter.

Q: When might NorthWestern Corporation see financial commitments for the NorthPlains Connector?

A: Brian Bird mentioned it's not outside the five-year planning horizon for financial commitment, focusing on moving from LOI to commercial agreements.

Q: How do utility-related bills in Montana, like those related to wildfire strict liability, impact the company?

A: Brian Bird noted bills to reduce strict liability issues are important, with Montana and South Dakota having related bills, and utilities working together on such legislation.

Q: How do data centers and large load customers fit into the capital plan and earnings growth?

A: Crystal Lail explained data centers and large load customers are incremental to the plan, with LOIs in place, and once service agreements are reached, they'll be incorporated into financial plans, potentially reducing regulatory lag and benefiting earnings.