NorthWestern (NWE) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported GAAP diluted EPS of $1.25 and non-GAAP diluted EPS of$ 1.22 for the first quarter of 2025, compared to $1.06 in the same period last year, reflecting a significant increase in earnings driven by rate recovery and colder weather [5][9][10] - The company affirmed its long-term rate base and earnings per share growth rate targets of 4% to 6% [5][20] - A dividend of$ 0.66 per share was declared, payable on June 30, 2025, to shareholders of record as of June 13, 2025 [5] Business Line Data and Key Metrics Changes - The Electric and Gas segments contributed strongly to the earnings, with margin improvements driven by new rates and favorable weather conditions [9][10] - New rates contributed $0.20 to margin improvement, while favorable loads added$ 0.13, resulting in a total margin increase [10][12] - Transition revenues contributed approximately $0.05 to the quarter's earnings [10] Market Data and Key Metrics Changes - The Montana rate review is nearing completion, with a full natural gas settlement and a partial electric settlement reached [6][19] - The average bill impact from the gas case is approximately 9%, maintaining rates below the national average [19] Company Strategy and Development Direction - The company aims to achieve greater than 6% EPS growth through opportunities with data centers and new large load opportunities, alongside FERC regional transmission and incremental generating capacity [7][20] - The company is focused on maintaining reliability and affordability for customers while supporting long-term growth [19][22] - Legislative successes include a wildfire bill providing legal protections and a transmission bill facilitating the establishment of CPCNs for large transmission projects [23][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering on earnings and rate-based growth commitments over the long term, despite not providing specific 2025 earnings guidance until the conclusion of the Montana rate review [20][21] - The first quarter performance was solid and slightly ahead of expectations, with a lower contribution anticipated from the second quarter due to the timing of rate implementations [21][22] Other Important Information - The company completed$ 500 million in long-term debt financing to address its financing needs for 2025 [14][15] - The company is currently at over 60% carbon-free energy in Montana and is exploring opportunities for new large load customers [31] Q&A Session Summary Question: Inquiry about tariff proceedings and data center customers - Management indicated that there are nine parties in the early stages of data center requests, with two parties (Atlas and Sabey) in the contractual estimate phase, expecting contracts by the end of Q2 or early July [42][45] Question: EPS guidance for 2025 - Management acknowledged the inquiry about 2025 guidance, indicating expectations to remain within the 4% to 6% range but noted that it may not be linear [51] Question: Changes in electric average customer counts - Management clarified that changes in customer counts were due to a new system for counting street lighting districts, with overall customer growth remaining around 1.5% [55] Question: Long-term capacity planning and Colstrip - Management confirmed that there is adequate land around Colstrip for potential future capacity, including gas or nuclear options, depending on regulatory timelines [62][66]