NorthWestern Energy Group Inc
For the period ended Jun 30, 2024. Filed Jul 31, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 31, 2024
NWE$82.73+0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-04-26.
0001993004-24-000035
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-31.
0001993004-24-000072
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 118 previous paragraphs and 139 current paragraphs.
79 unchanged; 23 reworded; 28 added; 16 removed; 0 previous and 9 current paragraphs rearranged.
Tables are not compared: 17 previous and 30 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (28)
Current report
Consolidated net income for the three months ended June 30, 2024 was $31.7 million as compared with $19.1 million for the same period in 2023. This increase was primarily due to new base rates in Montana and South Dakota, electric transmission revenues, Montana property tax tracker collections, and electric and natural gas retail volumes. These were offset in part by a less favorable QF liability adjustment in the current year, non-recoverable Montana electric supply costs, depreciation, operating, administrative and general costs, and interest expense.
Current report
Regulatory Update
Current report
Rate reviews are necessary to recover the cost of providing safe, reliable service, while contributing to earnings growth and achieving our financial objectives. We regularly review the need for electric and natural gas rate relief in each state in which we provide service. Our ongoing rate review activity includes the following:
Current report
Montana Rate Review -On July 10, 2024, we filed a Montana electric and natural gas rate review with the MPSC. The filing requests a base rate annual revenue increase of $156.5 million ($69.4 million net with Property Tax and PCCAM tracker adjustments) for electric and $28.6 million for natural gas. Our request is based on a return on equity of 10.80 percent with a capital structure including 46.81 percent equity, and forecasted 2024 electric and natural gas rate base of $3.45 billion and $731.9 million, respectively. The electric rate base investment includes the 175-megawatt natural gas-fired Yellowstone County Generating Station, which is expected to be in service during the third quarter of 2024. We requested interim base rates to be effective October 1, 2024.
Current report
South Dakota Natural Gas Rate Review -On June 21, 2024, we filed a natural gas rate review with the South Dakota Public Utilities Commission. The filing requests a base rate annual revenue increase of $6.0 million. Our request is based on a return on equity of 10.70 percent, a capital structure including 53.13 percent equity, and rate base of $95.6 million. If a final order is not received by December 21, 2024, interim base rates may go into effect.
Current report
Nebraska Natural Gas Rate Review -On June 6, 2024, we filed a natural gas rate review with the Nebraska Public Service Commission. The filing requests a base rate annual revenue increase of $3.6 million. Our request is based on a return on equity of 10.70 percent, a capital structure including 53.13 percent equity, and rate base of $47.4 million. Interim base rates are not anticipated to be implemented prior to October 1, 2024.
Current report
Acquisition of Energy West Montana Assets
Current report
On July 29, 2024, we entered into an Asset Purchase Agreement with Hope Utilities to acquire its Energy West natural gas utility distribution system and operations serving approximately 33,000 customers located near Great Falls, Cut Bank, and West Yellowstone, Montana for approximately $39.0 million in cash, subject to certain working capital and other agreed upon closing adjustments. The transaction is subject to a number of customary closing conditions, including MPSC approval, and we expect the acquisition to be completed by the end of the first quarter of 2025.
Current report
Colstrip - Puget Sound Energy Transaction
Current report
On July 30, 2024, we entered into a definitive agreement (the Agreement) with Puget Sound Energy (Puget) to acquire Puget's 25 percent interest in each of Units 3 and 4 (collectively representing 370 megawatts) at the Colstrip Generating Station for $0. The acquisition would be effective December 31, 2025, subject to the satisfaction of the closing conditions contained within the Agreement. Under the terms of the Agreement, we will be responsible for operating costs starting on January 1, 2026; while Puget will retain responsibility for its pre-closing share of environmental and pension liabilities attributed to events or conditions existing prior to the closing of the transaction and for any future decommission and demolition costs associated with the existing facilities that comprise Puget's interest. The Agreement is subject to customary conditions and approvals, including approval from the FERC.
Current report
Acquisition of Puget’s ownership interest, in addition to the previously disclosed acquisition of Avista’s 15 percent interest in each of Colstrip Units 3 and 4 (collectively representing 222 megawatts), will result in our ownership of 55 percent of the facility with the ability to guide operating and maintenance investments. This provides capacity to help us meet our obligation to provide reliable and cost effective power to our customers in Montana, while allowing opportunity for us to identify and plan for newer lower or no-carbon technologies in the future.
Current report
Consolidated net income for the three months ended June 30, 2024 was $31.7 million as compared with $19.1 million for the same period in 2023. This increase was primarily due to new base rates in Montana and South Dakota , electric transmission revenues, Montana property tax tracker collections, and electric and natural gas retail volumes. These were offset in part by a less favorable QF liability adjustment in the current year, non-recoverable Montana electric supply costs, depreciation, operating, administrative and general costs, and interest expense.
Current report
The less favorable adjustment to our electric QF liability (unrecoverable costs associated with contracts covered by the Public Utility Regulatory Policies Act of 1978 (PURPA) as part of a 2002 stipulation with the MPSC and other parties) reflects a $0.8 million gain in 2024, as compared with a $5.0 million gain for the same period in 2023, due to a favorable adjustment in the prior year, decreasing the QF liability by $4.2 million, reflecting annual actual contract price escalation for the 2023-2024 contract year, which was less than previously estimated. The 2023-2024 contract year was the last year of the contract that contains variable pricing terms.
Current report
Under the PCCAM, net supply costs higher or lower than the PCCAM base rate (PCCAM Base) (excluding qualifying facility (QF) costs) are allocated 90 percent to Montana customers and 10 percent to shareholders. For the three months ended June 30, 2024, we over-collected supply costs of $11.0 million resulting in a reduction to our under collection of costs, and recorded an increase in pre-tax earnings of $1.2 million (10 percent of the PCCAM Base cost variance). For the three months ended June 30, 2023, we over-collected supply costs of $18.9 million resulting in a reduction to our under collection of costs, and recorded an increase in pre-tax earnings of $2.1 million.
Current report
Consolidated other income was $6.2 million for the three months ended June 30, 2024 as compared with $4.1 million for the same period of 2023. This increase was primarily due to higher capitalization of AFUDC and a decrease in the non-service component of pension expense.
Current report
Consolidated net income for the six months ended June 30, 2024 was $96.7 million as compared with $81.7 million for the same period in 2023. This increase was primarily due to new base rates in Montana and South Dakota, electric transmission revenues, and Montana property tax tracker collections. These were offset in part by non-recoverable Montana electric supply costs, a less favorable QF liability adjustment in the current year, electric and natural gas retail volumes, depreciation, operating, administrative and general costs, and interest expense.
Current report
Consolidated gross margin for the six months ended June 30, 2024 was $235.4 million as compared with $206.4 million in 2023, an increase of $29.0 million, or 14.1 percent. This increase was primarily due to new base rates in Montana and South Dakota, electric transmission revenues, and Montana property tax tracker collections. These were offset in part by non-recoverable Montana electric supply costs, a less favorable QF liability adjustment in the current year, electric and natural gas retail volumes, depreciation, and operating and maintenance costs.
Current report
Consolidated utility margin for the six months ended June 30, 2024 was $544.1 million as compared with $512.0 million for the same period in 2023, an increase of $32.1 million, or 6.3 percent. Primary components of the change in utility margin include the following (in millions):
Current report
Electric retail volume impact was unfavorable as lower residential usage, due to unfavorable weather, and lower commercial demand, was partly offset by higher industrial demand and customer growth. Lower natural gas retail volumes were driven by unfavorable weather in all jurisdictions partly offset by customer growth.
Current report
The adjustment to our electric QF liability (unrecoverable costs associated with PURPA contracts as part of a 2002 stipulation with the MPSC and other parties) reflects a $0.8 million gain in 2024, as compared with a $5.0 million gain for the same period in 2023, as further explained above in the consolidated results of operations for the three months ended June 30, 2024.
Current report
Consolidated operating income for the six months ended June 30, 2024 was $163.7 million as compared with $141.7 million in the same period of 2023. This increase was primarily due to new base rates in Montana and South Dakota, electric transmission revenues, and Montana property tax tracker collections. These were offset in part by non-recoverable Montana electric supply costs, a less favorable QF liability adjustment in the current year, electric and natural gas retail volumes, depreciation, and operating, administrative and general costs.
Current report
Consolidated income tax expense for the six months ended June 30, 2024 was $14.6 million as compared to $12.4 million in the same period of 2023. Our effective tax rate for the six months ended June 30, 2024 was 13.1% as compared with 13.2% for the same period in 2023. Income tax expense for the six months ended June 30, 2023 includes a one-time $3.2 million charge for the reduction of previously claimed alternative minimum tax credits.
Current report
The less favorable adjustment to our electric QF liability (unrecoverable costs associated with PURPA as part of a 2002 stipulation with the MPSC and other parties) reflects a $0.8 million gain in 2024, as compared with a $5.0 million gain for the same period in 2023, as further explained above in the consolidated results of operations for the three months ended June 30, 2024.
Current report
Under the PCCAM, net supply costs higher or lower than the PCCAM Base (excluding qualifying facility (QF) costs) are allocated 90 percent to Montana customers and 10 percent to shareholders. For the three months ended June 30, 2024, we over-collected supply costs of $11.0 million resulting in a reduction to our under collection of costs, and recorded an increase in pre-tax earnings of $1.2 million (10 percent of the PCCAM Base cost variance). For the three months ended June 30, 2023, we over-collected supply costs of $18.9 million resulting in a reduction to our under collection of costs, and recorded an increase in pre-tax earnings of $2.1 million.
Current report
Under the PCCAM, net supply costs higher or lower than the PCCAM Base (excluding qualifying facility (QF) costs) are allocated 90 percent to Montana customers and 10 percent to shareholders. For the six months ended June 30, 2024, we under-collected supply costs of $16.1 million resulting in an increase to our under collection of costs, and recorded a decrease in pre-tax earnings of $1.8 million (10 percent of the PCCAM Base cost variance). For the six months ended June 30, 2023, we over-collected supply costs of $23.4 million resulting in a reduction to our under collection of costs, and recorded an increase in pre-tax earnings of $2.6 million.
Current report
Retail volume impact was unfavorable as lower residential usage, due to unfavorable weather, and lower commercial demand, was partly offset by higher industrial demand and customer growth.
Current report
The adjustment to our electric QF liability (unrecoverable costs associated with PURPA contracts as part of a 2002 stipulation with the MPSC and other parties) reflects a $0.8 million gain in 2024, as compared with a $5.0 million gain for the same period in 2023, as further explained above in the consolidated results of operations for the three months ended June 30, 2024.
Current report
Higher retail volumes were driven by favorable weather in Montana and customer growth, partly offset by unfavorable weather in South Dakota and Nebraska.
Removed paragraphs (16)
Previous report
Consolidated net income for the three months ended March 31, 2024 was $65.1 million as compared with $62.5 million for the same period in 2023. This increase was primarily due to new base rates resulting from the Montana and South Dakota rate reviews, higher transmission revenues, and higher Montana property tax tracker collection, partly offset by lower electric and natural gas retail volumes, higher non-recoverable Montana electric supply costs, higher depreciation and depletion expense, higher operating, maintenance, and administrative expenses, and higher interest expense.
Previous report
Montana Rate Review
Previous report
We anticipate filing a Montana electric and natural gas rate review with the MPSC in the third quarter of 2024 based on a 2023 test year. Within this rate review filing we also anticipate a prudence review of the Yellowstone County Generating Station.
Previous report
Power Costs and Credits Adjustment Mechanism (PCCAM)
Previous report
As of March 31, 2024, we have under-collected our total Montana electric supply costs for the July 2023 through June 2024 PCCAM year by approximately $24.0 million. The significant increase to our under-collected costs during the three months ended March 31, 2024 was driven by a January cold weather event in our service territory. We also remained under-collected for the July 2022 through June 2023 PCCAM year by approximately $8.5 million, which we expect to recover within rates by June 2024. We submit quarterly and annual PCCAM filings with the MPSC to recover, or refund, under- or over-collected Montana electric supply costs. PCCAM rates are being adjusted through the quarterly filings to provide a more timely recovery of deferred balances instead of annual recovery.
Previous report
Our electric supply from owned and long-term contracted resources is not adequate to meet our peak-demand needs. Because of this, the volatility of market prices for energy on peak-demand days, even if only for a few days in duration, exposes us to potentially significant market purchases that could negatively impact our results of operations and cash flows. The construction of the Yellowstone County Generating Station and acquisition of Avista's Colstrip Units 3 and 4 interests are expected to reduce our exposure to market purchases.
Previous report
Consolidated net income for the three months ended March 31, 2024 was $65.1 million as compared with $62.5 million for the same period in 2023. This increase was primarily due to new base rates resulting from the Montana and South Dakota rate reviews, higher transmission revenues, and higher Montana property tax tracker collection, partly offset by lower electric and natural gas retail volumes, higher non-recoverable Montana electric supply costs, higher depreciation and depletion expense, higher operating, maintenance, and administrative expenses, and higher interest expense.
Previous report
Consolidated utility margin for the three months ended March 31, 2024 was $300.6 million as compared with $289.0 million for the same period in 2023, an increase of $11.6 million, or 4.0 percent.
Previous report
(1) Exclusive of depreciation and depletion.
Previous report
(2) Non-GAAP financial measure. See “Non-GAAP Financial Measure” above. Also see "Overall Consolidated Results" above for reconciliation of gross margin to utility margin.
Previous report
(1) Montana electric and natural gas heating degree days may differ due to differences in service territory.
Previous report
(1) Non-GAAP financial measure. See "Non-GAAP Financial Measure" above. Also see "Overall Consolidated Results" above for reconciliation of gross margin to utility margin.
Previous report
(1) Exclusive of depreciation and depletion.
Previous report
(2) Non-GAAP financial measure. See “Non-GAAP Financial Measure” above. Also see "Overall Consolidated Results" above for reconciliation of gross margin to utility margin.
Previous report
(1) Montana electric and natural gas heating degree days may differ due to differences in service territory.
Previous report
(1) Non-GAAP financial measure. See "Non-GAAP Financial Measure" above. Also see "Overall Consolidated Results" above for reconciliation of gross margin to utility margin.
Reworded paragraphs (23)
Previous wording
As you read this discussion and analysis, refer to our Condensed Consolidated Statements of Income, which present the results of our operations for the three months ended March 31, 2024 and 2023.
Current wording
As you read this discussion and analysis, refer to our Condensed Consolidated Statements of Income, which present the results of our operations for the three and six months ended June 30, 2024 and 2023.
Previous wording
HOW WE PERFORMED AGAINST OUR FIRST QUARTER 2023 RESULTS
Current wording
HOW WE PERFORMED AGAINST OUR SECOND QUARTER 2023 RESULTS
Previous wording
Construction of the new generation facility continues to progress and we expect the plant to be operational by the end of the third quarter 2024. The lawsuit challenging the Yellowstone County Generating Station (YCGS) air quality permit, which required us to suspend construction activities for a period of time, as well as additional related legal and construction challenges, delayed the project timing and have increased costs. As of March 31, 2024, total costs of approximately $267.5 million have been incurred, with expected total costs of approximately $310.0 million to $320.0 million. See Note 10 - Commitments and Contingencies to the Condensed Consolidated Financial Statements included herein for additional information regarding legal challenges impacting YCGS.
Current wording
Construction of the new generation facility continues to progress and we expect the plant to be in service during the third quarter of 2024. The lawsuit challenging the Yellowstone County Generating Station (YCGS) air quality permit, which required us to suspend construction activities for a period of time, as well as additional related legal and construction challenges, delayed the project timing and have increased costs. As of June 30, 2024, total costs of approximately $288.9 million have been incurred, with expected total costs of approximately $310.0 million to $320.0 million. See Note 10 - Commitments and
Previous wording
Draft GHG emission standards for existing coal-fired facilities and new coal and natural gas-fired facilities, including enhanced MATS rules, were released by the EPA in the second quarter of 2023. Our review of these draft rules indicated they would require potentially expensive upgrades at Colstrip Units 3 and 4 to comply, with proposed compliance dates that may not be achievable and / or require technology that is unproven, resulting in significant impacts to costs of the facilities. On April 25, 2024, the EPA released final rules related to GHG emission standards for existing coal-fired facilities and new coal and natural gas-fired facilities as well as final rules strengthening the MATS requirements. The final MATS and GHG Rules will require compliance as early as 2028 and 2032, respectively. We are evaluating how the final MATS and GHG Rules may impact our coal-fired generation facilities and operations.
Current wording
On April 25, 2024, the EPA released final rules related to GHG emission standards (GHG Rules) for existing coal-fired facilities and new coal and natural gas-fired facilities as well as final rules strengthening the MATS requirements (MATS Rules). Compliance with the rules will require expensive upgrades at Colstrip Units 3 and 4 with proposed compliance dates that may not be achievable and / or require technology that is unproven, resulting in significant impacts to costs of the facilities. The final MATS and GHG Rules require compliance as early as 2027 and 2032, respectively. See Note 10- Commitments and Contingencies to the Condensed Consolidated Financial Statements included herein for additional information regarding these rules.
Previous wording
Consolidated gross margin for the three months ended March 31, 2024 was $142.5 million as compared with $130.7 million in 2023, an increase of $11.8 million, or 9.0 percent. This increase was primarily due to new base rates resulting from the Montana and South Dakota rate reviews, higher transmission revenues, and higher Montana property tax tracker collections, partly offset by lower electric and natural gas retail volumes, higher non-recoverable Montana electric supply costs, and higher depreciation and depletion expense.
Current wording
Consolidated gross margin for the three months ended June 30, 2024 was $92.8 million as compared with $75.5 million in 2023, an increase of $17.3 million, or 22.9 percent. This increase was primarily due to new base rates in Montana and South Dakota, electric transmission revenues, Montana property tax tracker collections, and electric and natural gas retail volumes. These were offset in part by a less favorable QF liability adjustment in the current year, non-recoverable Montana electric supply costs, depreciation, and operating and maintenance costs.
Previous wording
Primary components of the change in utility margin include the following (in millions):
Current wording
Consolidated utility margin for the three months ended June 30, 2024 was $243.4 million as compared with $222.9 million for the same period in 2023, an increase of $20.5 million, or 9.2 percent. Primary components of the change in utility margin include the following (in millions):
Previous wording
Lower electric retail volumes were driven by unfavorable weather in Montana and South Dakota impacting residential demand and lower commercial demand, partly offset by customer growth. Lower natural gas retail volumes were driven by unfavorable weather in Montana and South Dakota impacting residential and commercial demand.
Current wording
Higher electric retail volumes were driven by favorable weather in Montana impacting residential demand, higher industrial demand, and customer growth in all jurisdictions, partly offset by unfavorable weather in South Dakota impacting residential demand and lower commercial demand. Higher natural gas retail volumes were driven by favorable weather in Montana and customer growth, partly offset by unfavorable weather in South Dakota and Nebraska.
Previous wording
Consolidated operating expenses, excluding fuel, purchased supply and direct transmission expense, were $198.5 million for the three months ended March 31, 2024, as compared with $193.0 million for the three months ended March 31, 2023. Primary components of the change include the following (in millions):
Current wording
Consolidated operating expenses, excluding fuel, purchased supply and direct transmission expense, were $181.9 million for the three months ended June 30, 2024, as compared with $177.3 million for the three months ended June 30, 2023. Primary components of the change include the following (in millions):
Previous wording
Consolidated operating income for the three months ended March 31, 2024 was $102.1 million as compared with $96.0 million in the same period of 2023. This increase was primarily driven by new base rates resulting from the Montana and South Dakota rate reviews, higher transmission revenues, and higher Montana property tax tracker collections, partly offset by lower electric and natural gas retail volumes, higher non-recoverable Montana electric supply costs, higher depreciation and depletion expense, and higher operating, administrative and general expenses.
Current wording
Consolidated operating income for the three months ended June 30, 2024 was $61.6 million as compared with $45.6 million in the same period of 2023. This increase was primarily due to new base rates in Montana and South Dakota, electric transmission revenues, Montana property tax tracker collections, and electric and natural gas retail volumes. These were offset in part by a less favorable QF liability adjustment in the current year, non-recoverable Montana electric supply costs, depreciation, and operating, administrative and general costs.
Previous wording
Consolidated interest expense was $31.0 million for the three months ended March 31, 2024 as compared with $28.0 million for the same period of 2023. This increase was due to higher interest on long term debt partly offset by lower interest on our revolving credit facilities and higher capitalization of Allowance for Funds Used During Construction (AFUDC).
Current wording
Consolidated interest expense was $31.9 million for the three months ended June 30, 2024 as compared with $28.4 million for the same period of 2023. This increase was due to higher borrowings and interest rates, partly offset by lower interest on our revolving credit facilities and higher capitalization of Allowance for Funds Used During Construction (AFUDC).
Previous wording
Consolidated income tax expense was $10.3 million for the three months ended March 31, 2024 as compared to $10.2 million for the same period of 2023. Our effective tax rate for the three months ended March 31, 2024 was 13.7% as compared with 14.1% for the same period in 2023.
Current wording
Consolidated income tax expense was $4.2 million for the three months ended June 30, 2024 as compared to $2.1 million for the same period of 2023. Our effective tax rate for the three months ended June 30, 2024 was 11.8% as compared with 10.1% for the same period in 2023.
Previous wording
Under the PCCAM, net costs higher or lower than the PCCAM Base (excluding qualifying facility (QF) costs) are allocated 90 percent to Montana customers and 10 percent to shareholders. For the three months ended March 31, 2024, we under-collected supply costs of $27.1 million resulting in an increase to our under collection of costs, and recorded a decrease in pre-tax earnings of $3.0 million (10 percent of the PCCAM Base cost variance). For the three months ended March 31, 2023, we over-collected costs of $4.3 million resulting in a decrease to the under collection of costs, and recorded an increase in pre-tax earnings of $0.5 million.
Current wording
Under the PCCAM, net supply costs higher or lower than the PCCAM Base (excluding qualifying facility (QF) costs) are allocated 90 percent to Montana customers and 10 percent to shareholders. For the six months ended June 30, 2024, we under-collected supply costs of $16.1 million resulting in an increase to our under collection of costs, and recorded a decrease in pre-tax earnings of $1.8 million (10 percent of the PCCAM Base cost variance). For the six months ended June 30, 2023, we over-collected supply costs of $23.4 million resulting in a reduction to our under collection of costs, and recorded an increase in pre-tax earnings of $2.6 million.
Previous wording
Consolidated other income was $4.3 million for the three months ended March 31, 2024 as compared with $4.7 million for the same period of 2023. This decrease was primarily due to a $2.5 million non-cash impairment of an alternative energy storage equity investment and an increase in the non-service component of pension expense, partly offset by a $2.3 million reversal of a previously expensed Community Renewable Energy Project penalty due to a favorable legal ruling and higher capitalization of AFUDC.
Current wording
Consolidated other income was $10.5 million for the six months ended June 30, 2024 as compared to $8.8 million during the same period of 2023. This increase was primarily due a $2.3 million reversal of a previously expensed Community Renewable Energy Project penalty due to a favorable legal ruling and higher capitalization of AFUDC, partly offset by a $2.5 million non-cash impairment of an alternative energy storage equity investment and an increase in the non-service component of pension expense.
Previous wording
Lower retail volumes were driven by unfavorable weather in Montana and South Dakota impacting residential demand and lower commercial demand, partly offset by customer growth.
Current wording
Higher retail volumes were driven by favorable weather in Montana impacting residential demand, higher industrial demand, and customer growth in all jurisdictions, partly offset by unfavorable weather in South Dakota impacting residential demand and lower commercial demand.
Previous wording
Lower retail volumes were driven by unfavorable weather in all jurisdictions impacting residential and commercial demand, partly offset by customer growth.
Current wording
Lower retail volumes were driven by unfavorable weather in all jurisdictions partly offset by customer growth.
Previous wording
As of March 31, 2024, our total net liquidity was approximately $418.2 million, including $4.2 million of cash and $414.0 million of revolving credit facility availability with no letters of credit outstanding.
Current wording
As of June 30, 2024, our total net liquidity was approximately $393.4 million, including $6.4 million of cash and $387.0 million of revolving credit facility availability with no letters of credit outstanding.
Previous wording
As of March 31, 2024, cash, cash equivalents, and restricted cash were $20.4 million as compared with $25.2 million as of December 31, 2023 and $27.1 million as of March 31, 2023. Cash provided by operating activities totaled $161.7 million for the three months ended March 31, 2024 as compared with $213.7 million during the three months ended March 31, 2023. As shown in the table below, this decrease in operating cash flows is primarily due to an increase in our under collection of energy supply costs for the three months ended March 31, 2024, compared to a decrease in our under collection of energy supply costs for the same period in 2023. The increase in uncollected energy supply costs for the three months ended March 31, 2024, was due to a January 2024 cold weather event.
Current wording
As of June 30, 2024, cash, cash equivalents, and restricted cash were $31.0 million as compared with $25.2 million as of December 31, 2023 and $24.0 million as of June 30, 2023. Cash provided by operating activities totaled $223.9 million for the six months ended June 30, 2024 as compared with $294.1 million during the six months ended June 30, 2023. As shown in the table below, this decrease in operating cash flows is primarily due to significant net cash inflows in the prior period from the recovery of previously under-collected energy supply costs, compared to net cash outflows for energy supply costs in the current period, primarily related to a January 2024 cold weather event.
Previous wording
Cash used in investing activities totaled $109.0 million during the three months ended March 31, 2024, as compared with $136.6 million during the three months ended March 31, 2023. Plant additions during the first three months of 2024 include maintenance additions of approximately $49.2 million and capacity related capital expenditures of $59.6 million. Plant additions during the first three months of 2023 included maintenance additions of approximately $83.1 million and capacity related capital expenditures of approximately $53.5 million.
Current wording
Cash used in investing activities totaled $248.3 million during the six months ended June 30, 2024, as compared with $265.8 million during the six months ended June 30, 2023. Plant additions during the first six months of 2024 include maintenance additions of approximately $130.5 million and capacity related capital expenditures of $116.9 million. Plant additions during the first six months of 2023 included maintenance additions of approximately $142.2 million and capacity related capital expenditures of approximately $121.2 million.
Previous wording
Cash used in financing activities totaled $57.5 million during the three months ended March 31, 2024, as compared with $72.5 million during the three months ended March 31, 2023. During the three months ended March 31, 2024, cash used in financing activities reflects net repayments under our revolving lines of credit of $132.0 million, repayment of 1.00 percent, $100.0 million of Montana First Mortgage Bonds, and payment of dividends of $39.6 million, partly offset by proceeds from the issuance of debt of $215.0 million. During the three months ended March 31, 2023, cash used in financing activities reflects net repayments under our revolving lines of credit of $253.0 million and payment of dividends of $38.0 million, partly offset by proceeds from the issuance of debt of $220.0 million.
Current wording
Cash provided by financing activities totaled $30.2 million during the six months ended June 30, 2024, as compared with cash used in financing activities of $26.8 million during the six months ended June 30, 2023. During the six months ended June 30, 2024, cash provided by financing activities reflects proceeds from the issuance of debt of $215.0 million and short-term borrowings of $100.0 million, partly offset by net repayments under our revolving lines of credit of $105.0 million, repayment of 1.00 percent, $100.0 million of Montana First Mortgage Bonds, and payment of dividends of $79.3 million. During the six months ended June 30, 2023, cash used in financing activities reflects net repayments under our revolving lines of credit of $259.0 million and payment of dividends of $76.1 million, partly offset by proceeds from the issuance of debt of $300.0 million and proceeds received from the issuance of common stock of $10.8 million.
Previous wording
As of March 31, 2024 and 2023 the outstanding balances of our credit facilities were $186.0 million and $197.0 million, respectively. As of April 19, 2024, the availability under our credit facilities was approximately $529.0 million, and there were no letters of credit outstanding.
Current wording
As of June 30, 2024 and 2023 the outstanding balances of our credit facilities were $213.0 million and $191.0 million, respectively. As of July 26, 2024, the availability under our credit facilities was approximately $371.0 million, and there were no letters of credit outstanding.
Previous wording
(1)Represents cash payments for long-term debt and excludes $13.5 million of debt discounts and debt issuance costs, net.
Current wording
(1)Represents cash payments for long-term debt and excludes $13.2 million of debt discounts and debt issuance costs, net.
Previous wording
(3)Certain QFs require us to purchase minimum amounts of energy at prices ranging from $67 to $136 per MWH through 2029. Our estimated gross contractual obligation related to these QFs is approximately $284.5 million. A portion of the costs incurred to purchase this energy is recoverable through rates authorized by the MPSC, totaling approximately $251.3 million.
Current wording
(3)Certain QFs require us to purchase minimum amounts of energy at prices ranging from $67 to $136 per MWH through 2029. Our estimated gross contractual obligation related to these QFs is approximately $266.0 million. A portion of the costs incurred to purchase this energy is recoverable through rates authorized by the MPSC, totaling approximately $236.1 million.
Previous wording
(5)Contractual interest payments include our revolving credit facilities, which have a variable interest rate. We have assumed an average interest rate of 6.82 percent on the outstanding balance through maturity of the facilities.
Current wording
(5)Contractual interest payments include our revolving credit facilities, which have a variable interest rate. We have assumed an average interest rate of 6.81 percent on the outstanding balance through maturity of the facilities.
Rearranged current paragraphs (9)
Current report — wording carried from elsewhere
Contingencies to the Condensed Consolidated Financial Statements included herein for additional information regarding legal challenges impacting YCGS.
Current report — wording carried from elsewhere
Consolidated operating expenses, excluding fuel, purchased supply and direct transmission expense, were $380.3 million for the six months ended June 30, 2024, as compared with $370.3 million for the six months ended June 30, 2023. Primary components of the change include the following (in millions):
Current report — wording carried from elsewhere
(1) In order to present the total change in labor and benefits, we have included the change in the non-service cost component of our pension and other postretirement benefits, which is recorded within other income on our Condensed Consolidated Statements of Income. This change is offset within this table as it does not affect our operating expenses.
Current report — wording carried from elsewhere
Consolidated interest expense was $62.9 million for the six months ended June 30, 2024 as compared with $56.4 million for the same period of 2023. This increase was due to higher borrowings and interest rates partly offset by lower interest on our revolving credit facilities and higher capitalization of AFUDC.
Current report — wording carried from elsewhere
The following table summarizes the differences between our effective tax rate and the federal statutory rate (in millions):
Current report — wording carried from elsewhere
We compute income tax expense for each quarter based on the estimated annual effective tax rate for the year, adjusted for certain discrete items. Our effective tax rate typically differs from the federal statutory tax rate primarily due to the regulatory impact of flowing through federal and state tax benefits of repairs deductions, state tax benefit of accelerated tax depreciation deductions (including bonus depreciation when applicable) and production tax credits.
Current report — wording carried from elsewhere
The following summarizes the components of the changes in electric utility margin for the six months ended June 30, 2024 and 2023 (in millions):
Current report — wording carried from elsewhere
The change in regulatory amortization revenue is due to timing differences between when we incur electric supply costs and when we recover these costs in rates from our customers, which has a minimal impact on utility margin. Our wholesale and other revenues are largely utility margin neutral as they are offset by changes in fuel, purchased supply and direct transmission expenses.
Current report — wording carried from elsewhere
The following summarizes the components of the changes in natural gas utility margin for the six months ended June 30, 2024 and 2023: