Northwestern Energy Group Inc Q1 FY2026 earnings call

• Recent highlights: GAAP diluted EPS $1.03, non-GAAP diluted EPS $1.31 affirming 2026 earnings guidance range; affirmed long-term rate base and EPS growth rate targets; received shareholder approval of pending merger with Black Hills, constructive settlements with key intervenors; constructive wildfire legislation passed in South Dakota; submitted large new load tariff proposal with MPSC; signed another data center development agreement with Quantica; declared dividend of $0.67 per share. • First quarter financial review: GAAP earnings $1.03 including impacts of warm weather, merger-related costs, and incremental Colstrip ownership; adjusted earnings $1.31 with key drivers like improved margin offset by higher operating costs, depreciation, and interest expense. • Merger progress: Shareholder approval received, constructive settlements with intervenors in Montana, Nebraska, and South Dakota; pending hearings in Montana and South Dakota in May and June respectively, and FERC expected to respond by June. • Wildfire legislation: South Dakota Senate Bill 36 passed with broad bipartisan support, no strict liability, similar to Montana legislation. • Data centers: Signed third development agreement with Quantica, data center request queue increased from six to eight, high-level assessments at four, moving from LOIs to development agreements, aiming to move all three to ESA by 2026. • Large load tariff: Submitted large new load tariff with MPSC in March 2026 to protect customers and provide guidelines on serving large load. • Colstrip: Acquired Avista portion for resource adequacy, procured Puget portion to increase ownership to 55% to ensure control over Colstrip’s future, with Puget piece currently in FERC-regulated entity. • Dividend: Declared dividend of $0.67 per share payable 06/30/2026, record date June 15.

GAAP diluted EPS was $1.03 and non-GAAP diluted EPS was $1.31. Adjusted EPS had a 7.4% increase off of 2025 first quarter results. Operating costs had a $12 million increase from prior quarter due to incremental ownership of Colstrip and $4 million from labor and benefits. Margin for first quarter reflected new rates in Montana but was offset by warm weather. Sales from Puget Colstrip interest and transmission revenues in bulk electric system were factors. Annual operating cost related to incremental Colstrip ownership is approx $48 million, with ~$12 million per quarter, and ~$8 million offset in Q1. Revenue contribution % not explicitly detailed in absolute terms but key drivers like margin, operating costs, weather, merger costs, etc. were discussed.

• Affirmed 2026 earnings guidance range of $3.68 to $3.83. • Affirmed long-term rate base and EPS growth rate targets of 4% to 6%. • Expectations for merger approvals in 2026. • Guidance related to data center development agreements and large new load tariff impacting future earnings. • Capital plan unchanged at $3.2 billion from 2026 through 2030, with incremental opportunities potentially increasing growth beyond 6% if delivered.

• Weather impact on financial results, as historically warm first quarter affected margin recovery. • Regulatory risks related to merger approvals in Montana, Nebraska, and South Dakota, including pending hearings and FERC response. • Risks associated with data center projects, such as Zevi's land procurement issues delaying progress. • Regulatory uncertainties in Montana regarding commissioner elections and their potential impact on strategy. • Uncertainties related to participation in generation opportunities for data centers due to procurement rules and timing constraints.

Q: Whitney Motilama on for Shahriar Pourreza asked about Zevi land situation and milestones for data center projects.

A: Brian Bird said intent was to file large new load tariff with ESA, but Zevi had land issues, and they will continue working with parties.

Q: Whitney asked about increase in large load numbers, mainly due to Quantica.

A: Brian Bird said primary change was specifically Quantica, going from prior 500 megawatt range to 1.1 gigawatts.

Q: Aidan Kelly at JPMorgan asked about resource planning assumptions for data center projects and utility participation.

A: Brian Bird said want to participate, but procurement rules in Montana are a challenge, and will work with developers to find a way, Puget interests can help with large load tariffs.

Q: Aidan asked about upcoming Montana commissioner elections and influence on strategy.

A: Brian Bird said strategy not tailored to elected commissioners, will work with whoever is elected; Crystal Lail added filing cadence and cost recovery needs don't change with elections.

Q: Chris Ellinghaus at Seaport Williams and Shank asked about largest weather deviation and Montana merger approvals.

A: Crystal Lail said 2019 had slightly larger deviation, Brian Bird said confident in Montana merger approvals by end of 2026 due to settlements and customer benefit.

Q: Chris asked about large load filing precedent and Montana commissioners.

A: Brian Bird said testimony provides examples of other states' filings, Crystal Lail added filing references other states' tariffs with customer protections.

Q: Paul Fremont with Ladenburg asked about Quantica timeline, impact on EPS growth, Colstrip serving Zevi and Atlas, and integration with Black Hills post-merger.

A: Brian Bird said Quantica ramping starts in 2029, Crystal Lail said deals impact EPS growth, Brian Bird said Puget piece serves large load customers but other investments like transmission needed, Brian Bird discussed regional transmission opportunities like Path 80 and North Plains Connector for integration with Black Hills post-merger