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Introduction & Market Context
NorthWestern Energy Group (NYSE:NWE) presented its first quarter 2025 earnings results on April 30, showcasing strong financial performance and strategic positioning for future growth. The utility company reported significant year-over-year improvements in earnings and utility margins while advancing key regulatory initiatives in its Montana service territory.
The company’s presentation highlighted its continued focus on delivering shareholder value through sustainable growth, with particular emphasis on expanding to serve data center customers and strengthening its transmission infrastructure. These results come as utilities nationwide navigate the dual challenges of grid reliability and clean energy transition.
Quarterly Performance Highlights
NorthWestern reported GAAP diluted earnings per share of $1.25 for Q1 2025, an 18% increase from $1.06 in the same period last year. Non-GAAP diluted EPS reached $1.22, up 12% from $1.09 in Q1 2024. Net income similarly showed strong growth, with GAAP net income rising 18.1% to $76.9 million and non-GAAP net income increasing 12.1% to $75.3 million.
As shown in the following chart comparing quarterly financial results:
The company’s utility margin grew substantially to $328.4 million, representing a 10.2% increase from $300.6 million in Q1 2024. This growth was driven by several positive factors, as illustrated in the utility margin bridge:
Key drivers behind the margin improvement included interim rates ($13.1 million), electric retail volumes ($7.0 million), natural gas retail volumes ($4.3 million), and transmission revenue ($4.2 million). These positive factors were partially offset by non-recoverable Montana property tax tracker collections (-$2.5 million).
The earnings growth was primarily attributed to improved utility margins, though partially offset by higher expenses, as shown in this earnings drivers chart:
Negative impacts on earnings included increased depreciation expense (-$0.07 per share), higher interest expense (-$0.07 per share), and increased operating, administrative and general expenses (-$0.04 per share).
Strategic Initiatives
NorthWestern outlined its five-year capital plan totaling $2.74 billion for 2025-2029, representing an 11% increase in investment compared to previous forecasts. The company emphasized that it does not expect to issue equity to fund this plan, maintaining its strong financial position.
The following chart details the allocation of this capital investment across various segments:
The largest portions of the capital plan are allocated to distribution ($909 million), electric transmission ($780 million), and gas transmission ($552 million). The company also highlighted incremental opportunities beyond this base plan, including data centers, FERC regional transmission, and additional generating capacity.
NorthWestern is strategically positioning itself to serve large load customers, particularly data centers. The company announced agreements with Sabey Data Centers and Atlas Power in December 2024, expecting to serve these customers under existing Montana tariffs. This aligns with the company’s increased ownership in the Colstrip generating facility, which is expected to rise from 15% to 55%.
As illustrated in the following capacity chart, this increased Colstrip ownership provides significant capacity for serving new large-load customers:
The company is also participating in the North Plains Connector Consortium Project, a $3.6 billion, 415-mile high-voltage direct-current transmission line that will connect Montana’s Colstrip substation to the eastern and western U.S. energy grids. NorthWestern will own 10% of this project, which has been awarded a $700 million Grid Resilience & Innovation Partnership grant from the U.S. Department of Energy.
Regulatory Developments
NorthWestern’s Montana electric and natural gas rate reviews are nearing completion. For electric rates, a partial settlement has been reached with major intervenors, which would increase the typical residential customer’s monthly bill by $4.63 or 4.2%. The proposed settlement maintains a 9.65% return on equity and a 48.02% equity ratio.
The Montana natural gas rate review has reached a full settlement with major intervenors, which would increase the typical residential customer’s monthly bill by $4.74. The settlement maintains a 9.55% return on equity and a 48.02% equity ratio.
The company also highlighted recent legislative developments in Montana that are favorable to its operations. The Montana Wildfire Bill (HB 490) confirms that strict liability cannot be applied to utility operations related to wildfires and provides legal protections for providers that follow negligence standards. Additionally, a Transmission Bill has been passed that streamlines the approval process for new transmission projects, requiring the Montana Public Service Commission to determine within 300 days of application if transmission projects are in the public interest.
Forward-Looking Statements
NorthWestern affirmed its long-term growth targets of 4-6% for both earnings per share and rate base, based on its 2024 adjusted diluted non-GAAP EPS of $3.40 and estimated rate base of $5.38 billion. The company expects to maintain an FFO/Debt ratio above 14% in 2025 and beyond, which is necessary to maintain its current credit ratings.
As shown in the following growth outlook slide, the company anticipates a relatively even distribution of earnings throughout 2025:
The company declared a quarterly dividend of $0.66 per share, payable on June 30, 2025, to shareholders of record as of June 13, 2025. This represents a slight increase from the $0.65 per share dividend declared in the same quarter of 2024, continuing the company’s track record of dividend growth.
NorthWestern emphasized its strong credit position, with a BBB rating from S&P and Fitch for NWEG, and higher ratings for its operating subsidiaries. The company’s FFO/Debt ratio improved to 14.3% for Q1 2025 (trailing twelve months), up from 13.4% in 2024, positioning it well to maintain its current credit ratings.
With its robust financial performance, strategic capital investments, and favorable regulatory developments, NorthWestern Energy appears well-positioned to deliver on its long-term growth targets while navigating the evolving energy landscape.
Full presentation:
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