NorthWestern Energy reaches multiparty settlement agreement in Montana Electric and Natural Gas Regulatory Rate Review

Rhea-AI Summary

NorthWestern Corporation (Nasdaq: NWE) has reached a settlement in its Montana regulatory review concerning electric and natural gas rates, pending approval from the Montana Public Service Commission (MPSC). The agreement, involving parties like the Montana Consumer Counsel and Walmart, proposes an increase in annual electric revenues by $67.4 million and natural gas revenues by $14.1 million. It maintains authorized returns on equity at 9.65% for electric and 9.55% for natural gas operations. NorthWestern has invested over $835 million in electric and $267 million in natural gas infrastructure since last rate adjustments.

Positive

• Settlement agreement expected to increase electric base revenues by $67.4 million.
• Settlement agreement expected to increase natural gas base revenues by $14.1 million.
• Maintains authorized returns on equity at 9.65% for electric and 9.55% for natural gas.

Negative

• None.

SIOUX FALLS, S.D. and BUTTE, Mont., April 03, 2023 (GLOBE NEWSWIRE) -- NorthWestern Corporation d/b/a NorthWestern Energy (Nasdaq: NWE) and certain parties reached a settlement agreement in its Montana electric and natural gas regulatory rate review that has been submitted to the Montana Public Service Commission (MPSC) for its consideration. In addition to NorthWestern, settling parties include the Montana Consumer Counsel, the Montana Large Customer Group, the Federal Executive Agencies and Walmart Inc.

The settlement includes, among other things, agreement on electric and natural gas base revenue increases, allocated cost of service, rate design, updates to the base amount of revenues associated with property taxes and electric supply costs, and regulatory policy issues related to requested changes in regulatory mechanisms.

If approved, the settlement agreement is designed to increase annual electric base revenues by approximately $67.4 million, and increase annual natural gas base revenues by approximately $14.1 million.

The settlement is based on an authorized return on equity of 9.65% for electric operations and 9.55% for natural gas operations, which are consistent with current authorized ROEs, and a 48% equity component of the capital structure.

“Working together, the settling parties reached a constructive outcome to present to the Montana Public Service Commission that, if approved, balances the best interests of our Montana customers and our shareholders,” said NorthWestern Energy President and Chief Executive Officer, Brian Bird. “Our Montana customers are best served by a financially sound energy company capable of making the substantial investments required for reliable, safe service.”

NorthWestern’s current natural gas and electric rates were last set using cost information from 2015 and 2017, respectively. Since then, NorthWestern Energy has invested over $835 million in our Montana electric infrastructure and $267 million in our Montana natural gas infrastructure.

Additional Settlement Terms

The settlement provides for an update to the Power Costs and Credits Adjustment Mechanism adjusting the base costs and providing for more timely recovery of deferred balances. It also addresses future recovery of certain operating costs associated with the Yellowstone County Generating Station and provides for the deferral of incremental operating costs related to the Enhanced Wildfire Mitigation Plan. The settling parties agreed to terminate the pilot decoupling program (Fixed Cost Recovery Mechanism) and that the proposed Business Technology rider will not be implemented.

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About NorthWestern Energy (Nasdaq: NWE)
NorthWestern Corporation, doing business as NorthWestern Energy, provides essential energy infrastructure and valuable services that enrich lives and empower communities while serving as long-term partners to our customers and communities. We are working to deliver safe, reliable, and innovative energy solutions that create value for customers, communities, employees, and investors. This includes bridging our history as a regulated utility safely providing low-cost and reliable service with our future as a globally-aware company offering a broader array of services performed by highly-adaptable and skilled employees. We provide electricity and / or natural gas to approximately 764,200 customers in Montana, South Dakota, Nebraska and Yellowstone National Park. We have provided service in South Dakota and Nebraska since 1923 and in Montana since 2002. More information is available on the company's Web site at www.northwesternenergy.com.

Investor Relations Contact:	Media Contact:
Travis Meyer (605) 978-2967	Jo Dee Black (866) 622-8081
travis.meyer@northwestern.com	jodee.black@northwestern.com

FAQ

What is the significance of NorthWestern Corporation's settlement in April 2023?

The settlement allows NorthWestern to increase electric revenues by $67.4 million and natural gas revenues by $14.1 million, pending approval.

What are the expected revenue increases from the settlement for NWE?

The settlement is expected to increase annual electric base revenues by $67.4 million and natural gas base revenues by $14.1 million.

When was NorthWestern's last rate adjustment before this settlement?

NorthWestern's natural gas and electric rates were last set using cost information from 2015 and 2017, respectively.

Who are the settling parties in NorthWestern Corporation's regulatory review?

The settling parties include the Montana Consumer Counsel, the Montana Large Customer Group, Federal Executive Agencies, and Walmart.