NorthWestern Energy Group, Inc.
For the period ended Sep 30, 2025. Filed Oct 30, 2025.
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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.
Sep 30, 2025 · Filed Oct 30, 2025
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 2025-06-30; filed 2025-07-31.
0001993004-25-000121
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-10-30.
0001993004-25-000184
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 172 previous paragraphs and 163 current paragraphs.
102 unchanged; 39 reworded; 22 added; 27 removed; 4 previous and 0 current paragraphs rearranged.
Tables are not compared: 33 previous and 31 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 (22)
Current report
On August 18, 2025, we entered into the Merger Agreement with Black Hills and Merger Sub that provides for an all-stock merger of equals between NorthWestern and Black Hills. The Merger Agreement provides for Merger Sub to merge with and into NorthWestern, with NorthWestern continuing as the surviving entity and a direct wholly owned subsidiary of Black Hills, which would assume a new corporate name as the resulting parent company of the combined corporate group. The Merger will combine the strengths of both companies, resulting in an organization with greater scale, financial stability, and operational expertise. It is designed to create a stronger, more resilient energy company focused on delivering safe, reliable, and affordable energy solutions to customers. Under the provisions of Accounting Standards Codification Topic 805, which requires the identification of an acquirer in a business combination, Black Hills is the accounting acquirer. Pursuant to the Merger Agreement, at the effective time of the Merger, each share of common stock of NorthWestern issued and outstanding as of immediately prior to closing will be converted into the right to receive 0.98 validly issued, fully paid and non-assessable shares of Black Hills Common Stock. See Note 2 - Pending Merger with Black Hills Corporation to the Condensed Consolidated Financial Statements included herein for additional information regarding this pending Merger.
Current report
Consolidated net income for the three months ended September 30, 2025 was $38.2 million as compared with $46.8 million for the same period in 2024. This decrease was primarily due to higher operating expenses, including merger-related costs and depreciation, higher interest expense, and a prior year income tax benefit from a gas repairs safe harbor method change. These were offset in part by new rates and customer usage.
Current report
Montana Rate Review
Current report
For further information on our Montana rate review, see Note 4 - Regulatory Matters to the Condensed Consolidated Financial Statements included herein.
Current report
Montana Large Load Tariff
Current report
Data Center Development
Current report
Resources and regulatory mechanisms to be utilized for serving these requests are pending further evaluation and regulatory considerations.
Current report
Avista Interests - The 222 megawatts of generation capacity from Colstrip Units 3 and 4 to be acquired from Avista (Avista Interests) was identified as a key element in our strategy to achieve resource adequacy for customers, as outlined in our 2023 Montana Integrated Resource Plan. Noting the costs associated with operating this resource are not currently reflected in utility customer rates, in August 2025, we filed a temporary PCCAM tariff waiver request with the MPSC that would provide a near-term cost-recovery mechanism expected to largely offset approximately $18.0 million in annual incremental operating and maintenance costs associated with the Avista Interests. This waiver requests that the MPSC allow us to keep 100 percent of the net revenue associated with certain designated power sales contracts up to the amount of the operating and maintenance expenses we incur associated with our Avista Interest. Under the PCCAM design, market sales, which include long-term power sales contracts, flow back to retail customers as a reduction to energy supply costs and would be subject to the 90/10 sharing mechanism. Furthermore, the waiver request indicates that any net revenues from the designated contracts exceeding the operating and maintenance expenses associated with our Avista Interest would continue to flow back to retail customers through the PCCAM as a reduction to energy supply costs. We expect a decision from the MPSC by the first quarter of 2026.
Current report
Puget Interests - The incremental interest in Colstrip Units 3 and 4 to be acquired from Puget (Puget Interests) increases our ownership share of the facility to 55 percent and provides an increase in voting share in determining strategic direction and investment decisions at the facility. While we expect our future opportunity to serve large load customers may be supported by this resource, we expect to sell excess capacity in the near term. We expect to sign a contract in the fourth quarter of 2025 to sell the dispatchable capacity and associated energy from the Puget Interest beginning January 1, 2026, through late 2027. Revenues from this agreement are expected to largely offset the estimated $30.0 million of annual incremental operating and maintenance costs associated with the Puget Interests. In addition, in October 2025, we submitted a request to the FERC for approval of cost-based rates for our subsidiary that will own the Puget Interests. We expect this rate approval to be effective by January 1, 2026.
Current report
Generation Capacity in South Dakota
Current report
The Southwest Power Pool (SPP) has recently updated its resource accreditation and Planning Reserve Margin (PRM) requirements in response to growing reliability concerns. As a result, SPP is requiring additional accredited capacity by 2030 to meet the updated PRM targets. In October 2025, we submitted a project with the Southwest Power Pool (SPP) under their Expedited Resource Adequacy Study program for the construction of a 131 MW natural gas generating facility located in Aberdeen, South Dakota, to meet regional capacity needs by 2030. Anticipated costs for this project are approximately $300 million. This project represents incremental capital expenditures not currently reflected in our five year estimated capital expenditure forecast included within Management’s Discussion and Analysis in the NorthWestern Energy Group Annual Report on Form 10-K for the year ended December 31, 2024. We expect to update our capital expenditures forecast in the first half of 2026 upon the completion of the transmission interconnection study regarding the necessary transmission upgrades needed for this additional generation capacity.
Current report
Consolidated net income for the three months ended September 30, 2025 was $38.2 million as compared with $46.8 million for the same period in 2024. This decrease was primarily due to higher operating expenses, including merger-related costs and depreciation, higher interest expense, and a prior year income tax benefit from a gas repairs safe harbor method change. These were offset in part by new rates and customer usage.
Current report
Consolidated income tax expense was $8.8 million for the three months ended September 30, 2025 as compared to an income tax benefit of $3.2 million for the same period of 2024. Our 2024 results included an income tax benefit related to a natural gas repairs safe harbor method change. Our effective tax rate for the three months ended September 30, 2025 was 18.7% as compared with (7.3)% for the same period in 2024.
Current report
Consolidated net income for the nine months ended September 30, 2025 was $136.4 million as compared with $143.6 million for the same period in 2024. This decrease was primarily due to higher operating expenses, including merger-related costs and depreciation, higher Montana property tax tracker collections, interest expense, and a prior year income tax benefit from a gas repairs safe harbor method change. These were offset in part by new rates, customer usage, and higher electric transmission revenues.
Current report
Electric retail volumes were driven by favorable weather in South Dakota impacting residential demand, higher commercial demand in Montana, and customer growth in all jurisdictions, partly offset by unfavorable weather in Montana impacting residential demand, lower commercial demand in South Dakota, and lower industrial demand. Natural gas retail volumes were driven by favorable weather in South Dakota and Nebraska, higher commercial demand, and customer growth in all jurisdictions, partly offset by unfavorable weather in Montana.
Current report
For the nine months ended September 30, 2025, we under-collected supply costs of $52.7 million resulting in an increase to our under collection of costs, and recorded a decrease in pre-tax earnings of $5.9 million (10 percent of the PCCAM Base cost variance). For the nine months ended September 30, 2024, we under-collected supply costs of $10.1 million resulting in an increase to our under collection of costs, and recorded a decrease in pre-tax earnings of $1.2 million (10 percent of the PCCAM Base cost variance).
Current report
Consolidated income tax expense for the nine months ended September 30, 2025 was $27.4 million as compared to $11.4 million in the same period of 2024. Our 2024 results included an income tax benefit related to a natural gas repairs safe harbor method change. Our effective tax rate for the nine months ended September 30, 2025 was 16.7% as compared with 7.4% for the same period in 2024.
Current report
Electric retail volumes were driven by favorable weather in South Dakota impacting residential demand, higher residential and commercial demand in Montana, and customer growth in all jurisdictions, partly offset by lower commercial demand in South Dakota and lower industrial demand.
Current report
Electric retail volumes were driven by favorable weather in South Dakota impacting residential demand, higher commercial demand in Montana, and customer growth in all jurisdictions, partly offset by unfavorable weather in Montana impacting residential demand, lower commercial demand in South Dakota, and lower industrial demand.
Current report
For the nine months ended September 30, 2025, we under-collected supply costs of $52.7 million resulting in an increase to our under collection of costs, and recorded a decrease in pre-tax earnings of $5.9 million (10 percent of the PCCAM Base cost variance). For the nine months ended September 30, 2024, we under-collected supply costs of $10.1 million resulting in an increase to our under collection of costs, and recorded a decrease in pre-tax earnings of $1.2 million (10 percent of the PCCAM Base cost variance).
Current report
Natural gas retail volumes were impacted by favorable weather in South Dakota and Nebraska, higher commercial demand, and customer growth in all jurisdictions, partly offset by unfavorable weather in Montana.
Current report
Natural gas retail volumes were driven by favorable weather in South Dakota and Nebraska, higher commercial demand, and customer growth in all jurisdictions, partly offset by unfavorable weather in Montana.
Removed paragraphs (27)
Previous report
Consolidated net income for the three months ended June 30, 2025 was $21.2 million as compared with $31.7 million for the same period in 2024. This decrease was primarily due to lower retail natural gas and electric usage primarily driven by weather, Montana property tax tracker collections, non-recoverable Montana electric supply costs, depreciation, operating, administrative and general costs, and interest expense. These were partly offset by higher retail rates, higher electric transmission, and natural gas transportation revenues.
Previous report
Regulatory Update
Previous report
The details of our filing request, as adjusted in rebuttal testimony are set forth below:
Previous report
The details of our interim rates granted are set forth below:
Previous report
(1) These electric interim rates were effective December 1, 2024, through May 22, 2025. See further discussion on revised electric interim rates below.
Previous report
(2) These natural gas interim rates were effective December 1, 2024, and are expected to remain in effect until the MPSC final order rates are effective.
Previous report
(4) Our requested interim property tax base increase went into effect on January 1, 2025, as part of our 2024 property tax tracker filing.
Previous report
Nebraska Natural Gas Rate Review - In June 2025, the NPSC approved a settlement agreement increasing base rate annual revenue by $2.4 million and final rates were implemented on July 1, 2025.
Previous report
EPA Rules
Previous report
In April 2024, the EPA released GHG Rules for existing coal-fired facilities and new coal and natural gas-fired facilities as well as MATS Rules. Compliance with the rules would 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. On April 8, 2025, President Trump issued a proclamation, "Regulatory Relief for Certain Stationary Sources to Promote American Energy," exempting certain coal plants, including Colstrip Units 3 and 4, Big Stone Plant, and Coyote Plant, from compliance with the MATS Rule through July 8, 2029. On June 11, 2025, the EPA issued Notices of Proposed Rulemaking to, among other things, rescind the 2024 MATS Rule. See Note 11 - Commitments and Contingencies to the Condensed Consolidated Financial Statements included herein for additional information regarding these rules.
Previous report
In August 2024, the U.S. Department of Energy awarded a $700.0 million grant through the Grid Resilience and Innovation Partnership (GRIP) program to advance the North Plains Connector (NPC) Consortium project. The 415-mile, high-voltage direct-current transmission line is intended to connect Montana's Colstrip substation, of which we are the operator and a joint owner, to central North Dakota, bridging the eastern and western U.S. energy grids. The NPC Consortium includes potential upgrades to our jointly owned Colstrip Transmission System and $70.0 million of the award is earmarked for the Colstrip Transmission System Upgrade. The NPC project aims to enhance grid reliability, support renewable energy integration, and provide additional capacity across multiple states. We collaborated with Grid United, the Montana Department of Commerce, and other regional utilities on the successful GRIP grant application.
Previous report
President Trump issued an Executive Order on January 20, 2025, "Unleashing American Energy," directing all federal executive agency heads to review all agency actions implicating energy reliability and affordability or potentially burdening the development of domestic energy resources. This Executive Order has delayed the disbursement of the funds granted by the U.S. Department of Energy for the NPC Consortium project.
Previous report
Montana Large Load Customers
Previous report
Montana Data Centers
Previous report
Montana Electric Transmission Construction
Previous report
In May 2025, Senate Bill 301 was passed by the Montana Legislature with unanimous bipartisan support and signed into law. The intention of this bill is to expedite and streamline the process for a public utility to construct electric transmission lines to serve the increasing demand for electricity, enhance grid reliability, and address current transmission congestion within Montana. This bill allows a public utility to request a Certificate of Public Convenience & Necessity for electric transmission lines rated higher than 69 kilovolts from the MPSC and also provides a process for a public utility to apply for advanced cost approval of electric transmission lines and related facilities before actual construction begins.
Previous report
Consolidated net income for the three months ended June 30, 2025 was $21.2 million as compared with $31.7 million for the same period in 2024. This decrease was primarily due to lower retail natural gas and electric usage primarily driven by weather, Montana property tax tracker collections, non-recoverable Montana electric supply costs, depreciation, operating, administrative and general costs, and interest expense. These were partly offset by higher retail rates, and higher electric transmission and natural gas transportation revenues.
Previous report
Lower electric retail volumes were driven by unfavorable spring weather in all jurisdictions impacting residential demand, and lower commercial and industrial demand, partly offset by customer growth in all jurisdictions. Lower natural gas retail volumes were driven by unfavorable weather in all jurisdictions, partly offset by customer growth in all jurisdictions.
Previous report
Consolidated income tax expense was $3.4 million for the three months ended June 30, 2025 as compared to $4.2 million for the same period of 2024. Our effective tax rate for the three months ended June 30, 2025 was 13.7% as compared with 11.8% for the same period in 2024.
Previous report
Consolidated net income for the six months ended June 30, 2025 was $98.2 million as compared with $96.7 million for the same period in 2024. This increase was primarily due to higher retail rates, higher electric transmission, higher retail electric usage primarily driven by weather, and Montana natural gas transportation. These were offset in part by Montana property tax collections, non-recoverable Montana electric supply costs, depreciation, operating, and administrative and general costs, and interest expense.
Previous 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, 2025, we under-collected supply costs of $31.6 million resulting in an increase to our under collection of costs, and recorded a decrease in pre-tax earnings of $3.5 million (10 percent of the PCCAM Base cost variance). 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).
Previous report
Consolidated income tax expense for the six months ended June 30, 2025 was $18.6 million as compared to $14.6 million in the same period of 2024. Our effective tax rate for the six months ended June 30, 2025 was 15.9% as compared with 13.1% for the same period in 2024.
Previous report
Lower electric retail volumes were driven by unfavorable spring weather in all jurisdictions impacting residential demand, and lower commercial and industrial demand, partly offset by customer growth in all jurisdictions.
Previous report
Electric retail volume impact was favorable due to higher residential usage in all jurisdictions due to favorable weather, higher commercial demand in Montana, and customer growth in all jurisdictions, partly offset by lower commercial demand in South Dakota, and lower industrial demand.
Previous 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, 2025, we under-collected supply costs of $31.6 million resulting in an increase to our under collection of costs, and recorded a decrease in pre-tax earnings of $3.5 million (10 percent of the PCCAM Base cost variance). 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).
Previous report
Lower retail volumes were driven by unfavorable weather in all jurisdictions, partly offset by customer growth in all jurisdictions.
Previous report
Higher retail volumes were driven by favorable weather in all jurisdictions and customer growth in all jurisdictions.
Reworded paragraphs (39)
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 and six months ended June 30, 2025 and 2024.
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 nine months ended September 30, 2025 and 2024.
Previous wording
HOW WE PERFORMED AGAINST OUR SECOND QUARTER 2024 RESULTS
Current wording
HOW WE PERFORMED AGAINST OUR THIRD QUARTER 2024 RESULTS
Previous wording
Montana Rate Review - In July 2024, we filed a Montana electric and natural gas rate review with the MPSC. In November 2024, the MPSC partially approved our requested interim rates effective December 1, 2024, subject to refund. Subsequently, we modified our request through rebuttal testimony. In March 2025, we filed a natural gas settlement with certain parties. In April 2025, we filed a partial electric settlement with certain other parties. Both settlements are subject to approval by the MPSC.
Current wording
In July 2024, we filed a Montana electric and natural gas rate review with the MPSC. In March 2025, we filed a natural gas settlement with certain parties. In April 2025, we filed a partial electric settlement with certain other parties. Both settlements are subject to approval by the MPSC.
Previous wording
(excluding property taxes associated with YCGS), regulatory policy issues related to requested changes in regulatory mechanisms, and agreement to support a separate motion for revised electric interim rates. The partial electric settlement provides for the deferral and annual recovery of incremental operating costs related to wildfire mitigation and insurance expenses through the Wildfire Mitigation Balancing Account.
Current wording
The partial electric settlement includes, among other things, agreement on base revenue increases (excluding base revenues associated with YCGS), allocated cost of service, rate design, updates to the amount of revenues associated with property taxes (excluding property taxes associated with YCGS), regulatory policy issues related to requested changes in regulatory mechanisms, and agreement to support a separate motion for revised electric interim rates. The partial electric settlement provides for the deferral and annual recovery of incremental operating costs related to wildfire mitigation and insurance expenses through the Wildfire Mitigation Balancing Account.
Previous wording
On May 23, 2025, as permitted by Montana statute, we implemented our initially requested electric rates, reflecting a base rate revenue increase of $156.5 million, on an interim basis, subject to refund with interest. Within our June 30, 2025 financial statements, we have deferred base rate revenues collected between May 23, 2025, and June 30, 2025, down to our requested revised electric interim rates of $110.3 million as shown within the above table. As of June 30, 2025, we have deferred approximately $3.5 million of base rate revenues collected. On June 20, 2025, we submitted the revised electric interim rates as shown within the above table to the MPSC for approval. The MPSC subsequently approved this request and the rates were implemented on July 2, 2025.
Current wording
On June 20, 2025, we submitted the revised electric interim rates of $110.3 million as shown within the above table to the MPSC for approval. The MPSC subsequently approved this request and the rates were implemented on July 2, 2025.
Previous wording
A hearing on the electric and natural gas rate review was held in June 2025, and final briefs are due in August 2025. Interim rates will remain in effect on a refundable basis, with interest, until the MPSC issues a final order.
Current wording
A hearing on the electric and natural gas rate review was held in June 2025, and final briefs were submitted in August 2025. Interim rates will remain in effect on a refundable basis, with interest, until the MPSC issues a final order. A final order is expected during the fourth quarter of 2025.
Previous wording
The MPSC requested information on our plan to serve potential large load customers and related resource adequacy issues. We responded in March 2025, outlining our policy and legal positions, emphasizing the importance of economic development for Montana and our commitment to serving our existing customers.
Current wording
The MPSC requested information on our plan to serve potential large load customers and related resource adequacy issues. We responded in March 2025, outlining our policy and legal positions, emphasizing the importance of economic development for Montana and our commitment to serving our existing customers. We expect to submit a filing with the MPSC during the fourth quarter of 2025 to address data center development discussed below, incorporating rate design that prevents cost shifting of infrastructure upgrades needed to serve large load customers to other retail customers.
Previous wording
In July 2025, we entered into a nonbinding letter of intent with Quantica Infrastructure to evaluate the transmission infrastructure and generation resources needed to support their proposed Phase 1 need of 5 megawatts in 2026 with growth up to 500 megawatts by 2030. This is our third signed letter of intent for data center load growth. In December 2024, we announced two separate nonbinding letters of intent to provide electric supply services for data centers being developed in Montana with a combined energy service requirement expected to be 75 megawatts beginning in early 2026 with growth of up to 400 megawatts or more by 2030. We anticipate that service could be provided through our regulated business, pending further evaluation and regulatory considerations.
Current wording
In July 2025, we entered into a nonbinding letter of intent with Quantica Infrastructure to evaluate the transmission infrastructure and generation resources needed to support their proposed need. We had previously disclosed in December 2024, two separate nonbinding letters of intent to provide electric supply services for data centers being developed in Montana. The combined energy service requirement associated with these letters of intent is currently expected to be 175 megawatts beginning in late 2027, or earlier, with growth of up to 1,100 megawatts or more by 2030. We have signed a development agreement with Sabey, and are working with each of these parties to execute electric service agreements.
Previous wording
As previously disclosed, we entered into definitive agreements with Avista Corporation (Avista) and Puget Sound Energy (Puget) to acquire their respective interests in Colstrip Units 3 and 4 for $0 and expect to complete these acquisitions on December 31, 2025. Accordingly, we will be responsible for associated operating costs on January 1, 2026. Puget and Avista will remain responsible for their respective 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 decommissioning and demolition costs associated with the existing facilities that comprise their interests. During the second half of 2025 we intend to make filings with the MPSC and FERC associated with these transactions, including recovery of incremental operating costs.
Current wording
As previously disclosed, we entered into definitive agreements with Avista and Puget to acquire their respective interests in Colstrip Units 3 and 4 for $0 and expect to complete these acquisitions on January 1, 2026. Accordingly, we will be responsible for associated operating costs beginning on January 1, 2026, which we will not collect through utility base rates, until requested in a future Montana rate review. Puget and Avista will remain responsible for their respective 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 decommissioning and demolition costs associated with the existing facilities that comprise their interests. At closing, we will reimburse Puget and Avista for the proportionate amount of the long-term capital enhancement work they each funded subsequent to executing the definitive agreements and up until the acquisition close date.
Previous wording
Acquisition of Energy West Montana Assets
Current wording
Acquisition of Energy West Montana Operations
Previous wording
In July 2024, NW Corp entered into an Asset Purchase Agreement with Hope Utilities to acquire its Energy West natural gas distribution and system operations serving approximately 33,000 customers located in Great Falls, Cut Bank, and West Yellowstone, Montana. In May 2025, the MPSC approved this acquisition and on July 1, 2025, NW Corp completed this acquisition for approximately $36.5 million in cash, which is subject to certain post-close working capital adjustments that we expect to finalize in the second half of 2025.
Current wording
In July 2024, NW Corp entered into an Asset Purchase Agreement with Hope Utilities to acquire its Energy West natural gas distribution and system operations serving approximately 33,000 customers located in Great Falls, Cut Bank, and West Yellowstone, Montana. In May 2025, the MPSC approved this acquisition and on July 1, 2025, NW Corp completed this acquisition for approximately $35.9 million in cash, which is subject to certain post-close working capital adjustments that we expect to finalize in the fourth quarter of 2025.
Previous wording
In addition to the Colstrip Transmission System Upgrade, in December 2024, we signed a nonbinding memorandum of understanding (MOU) with North Plains Connector LLC, a wholly owned subsidiary of Grid United, to own 10 percent (300 megawatts) of the NPC Consortium project. The project is entering the permitting phase and initiating regulatory filings with approvals targeted in 2026. Construction is expected to commence in 2028, with the project expected to be operational by 2032. Under the terms of the MOU, Grid United will continue to fund the development of the NPC and we will make our investment decision when the regulatory approvals and permits are in place. The project is a critical infrastructure investment that aligns with our commitment to providing reliable and affordable energy to our customers while also supporting broader grid resilience efforts in the region.
Current wording
In December 2024, we signed a nonbinding memorandum of understanding (MOU) with North Plains Connector LLC, a wholly owned subsidiary of Grid United, to own 10 percent (300 megawatts) of the North Plains Connector (NPC) Consortium project. The project is entering the permitting phase and we expect initial regulatory filings in 2026. Construction is expected to commence in 2028, with the project expected to be operational by 2032. Under the terms of the MOU, Grid United will continue to fund the development of the NPC and we will make our investment decision when the regulatory approvals and permits are in place. The project is a critical infrastructure investment that aligns with our commitment to providing reliable and affordable energy to our customers while also supporting broader grid resilience efforts in the region.
Previous wording
The Montana Legislature approved House Bill 490 in April 2025, with broad bipartisan support in both the House (90-0) and Senate (40-8), and the Governor signed this bill into law in May 2025. This bill requires development, approval, and implementation of electric facilities providers' wildfire mitigation plans. Importantly, House Bill 490 helps address some preexisting liability risks facing electric facilities providers in Montana. It changes Montana law, recognizing utilities' obligation to provide a public service for customers that is different from typical businesses; circumscribes certain damages; and enacts liability protections related to wildfire and wildfire prevention efforts involving providers. More specifically, House Bill 490 precludes common law strict liability claims for damages related to wildfire and electric activities or wildfire mitigation activities; establishes a statutory standard of care, supplanting common law causes of action and other theories of recovery; and creates a rebuttable presumption that an electric facilities provider acted reasonably if it substantially followed an approved wildfire mitigation plan. The legislation also defines the availability of damages by allowing noneconomic personal injury damages only when there is bodily injury and punitive damages only when an injured party proves by clear and convincing evidence that an electric facilities provider's actions were grossly negligent or intentional. We expect to file our wildfire mitigation plan with the MPSC in the third quarter of 2025 for review and approval.
Current wording
The Montana Legislature approved House Bill 490 in April 2025, with broad bipartisan support in both the House (90-0) and Senate (40-8), and the Governor signed this bill into law in May 2025. This bill requires development, approval, and implementation of electric facilities providers' wildfire mitigation plans. Importantly, House Bill 490 helps address some preexisting liability risks facing electric facilities providers in Montana. It changes Montana law, recognizing utilities' obligation to provide a public service for customers that is different from typical businesses; circumscribes certain damages; and enacts liability protections related to wildfire and wildfire prevention efforts involving providers. More specifically, House Bill 490 precludes common law strict liability claims for damages related to wildfire and electric activities or wildfire mitigation activities; establishes a statutory standard of care, supplanting common law causes of action and other theories of recovery; and creates a rebuttable presumption that an electric facilities provider acted reasonably if it substantially followed an approved wildfire mitigation plan. The legislation also defines the availability of damages by allowing noneconomic personal injury damages only when there is bodily injury and punitive damages only when an injured party proves by clear and convincing evidence that an electric facilities provider's actions were grossly negligent or intentional. We filed our wildfire mitigation plan with the MPSC in August 2025 for review and approval.
Previous wording
Consolidated gross margin for the three months ended June 30, 2025 was $94.5 million as compared with $92.8 million in 2024, an increase of $1.7 million, or 1.8 percent. This increase was primarily due to higher retail rates, higher electric transmission, and natural gas transportation revenues. These were partly offset by lower retail natural gas and electric usage primarily driven by weather, Montana property tax tracker collections, non-recoverable Montana electric supply costs, depreciation, and operating and maintenance costs.
Current wording
Consolidated gross margin for the three months ended September 30, 2025 was $127.1 million as compared with $102.8 million in 2024, an increase of $24.3 million, or 23.6 percent. This increase was primarily due to higher retail rates, natural gas and electric usage, electric transmission revenues, and natural gas transportation revenues. These were partly offset by higher operating and maintenance costs, depreciation, Montana property tax tracker collections, and non-recoverable Montana electric supply costs.
Previous wording
Consolidated utility margin for the three months ended June 30, 2025 was $267.4 million as compared with $243.4 million for the same period in 2024, an increase of $24.0 million, or 9.9 percent. Primary components of the change in utility margin include the following (in millions):
Current wording
Consolidated utility margin for the three months ended September 30, 2025 was $300.1 million as compared with $257.3 million for the same period in 2024, an increase of $42.8 million, or 16.6 percent. Primary components of the change in utility margin include the following (in millions):
Previous wording
Electric retail volume impact was due to higher residential usage in all jurisdictions due to favorable weather, higher commercial demand in Montana, and customer growth in all jurisdictions, partly offset by lower commercial demand in South Dakota, and lower industrial demand. Natural gas retail volumes were impacted by favorable weather in all jurisdictions and customer growth in all jurisdictions.
Current wording
Electric retail volumes were driven by favorable weather in South Dakota impacting residential demand, higher residential and commercial demand in Montana, and customer growth in all jurisdictions, partly offset by lower commercial demand in South Dakota and lower industrial demand. Natural gas retail volumes were impacted by favorable weather in South Dakota and Nebraska, higher commercial demand, and customer growth in all jurisdictions, partly offset by unfavorable weather in Montana.
Previous wording
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, 2025, we under-collected supply costs of $7.6 million resulting in an increase to our under collection of costs, and recorded a decrease in pre-tax earnings of $0.8 million (10 percent of the PCCAM Base cost variance). 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).
Current wording
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 September 30, 2025, we under-collected supply costs of $21.1 million resulting in an increase to our under collection of costs, and recorded a decrease in pre-tax earnings of $2.3 million (10 percent of the PCCAM Base cost variance). For the three months ended September 30, 2024, we over-collected supply costs of $5.9 million resulting in a reduction to our under collection of costs, and recorded an increase in pre-tax earnings of $0.7 million (10 percent of the PCCAM Base cost variance).
Previous wording
Consolidated operating expenses, excluding fuel, purchased supply and direct transmission expense, were $206.7 million for the three months ended June 30, 2025, as compared with $181.9 million for the three months ended June 30, 2024. Primary components of the change include the following (in millions):
Current wording
Consolidated operating expenses, excluding fuel, purchased supply and direct transmission expense, were $219.7 million for the three months ended September 30, 2025, as compared with $189.4 million for the three months ended September 30, 2024. Primary components of the change include the following (in millions):
Previous wording
Consolidated operating income for the six months ended June 30, 2025 was $185.5 million as compared with $163.7 million in the same period of 2024. This increase was primarily due to higher retail rates, higher electric transmission, higher retail electric usage primarily driven by weather, and Montana natural gas transportation. These were offset in part by Montana property tax collections, non-recoverable Montana electric supply costs, depreciation, and operating, administrative and general costs.
Current wording
Consolidated operating income for the three months ended September 30, 2025 was $80.3 million as compared with $67.9 million in the same period of 2024. This increase was primarily due to new rates, customer usage, electric transmission revenues, and natural gas transportation revenues. These were partly offset by unfavorable weather in Montana, higher operating, administrative, and general costs, including merger-related costs, depreciation, Montana property tax tracker collections, and non-recoverable Montana electric supply costs.
Previous wording
Consolidated interest expense was $36.3 million for the three months ended June 30, 2025 as compared with $31.9 million for the same period of 2024. This increase was due to higher borrowings and interest rates and lower capitalization of Allowance for Funds Used During Construction (AFUDC).
Current wording
Consolidated interest expense was $38.4 million for the three months ended September 30, 2025 as compared with $33.4 million for the same period of 2024. This increase was due to higher borrowings and interest rates and lower capitalization of Allowance for Funds Used During Construction (AFUDC).
Previous wording
Consolidated other income was $0.1 million for the three months ended June 30, 2025 as compared with $6.2 million for the same period of 2024. This decrease was primarily due to lower capitalization of AFUDC, a decrease in the value of deferred shares held in trust for deferred compensation, higher non-service component pension expense, and a $1.0 million expense accrual related to an estimated penalty for the previously disclosed Community Renewable Energy Project (CREP) informed by a recent MPSC ruling.
Current wording
Consolidated other income was $5.1 million for the three months ended September 30, 2025 as compared with $9.1 million for the same period of 2024. This decrease was primarily due to lower capitalization of AFUDC and higher non-service component pension expense.
Previous wording
Consolidated gross margin for the six months ended June 30, 2025 was $260.9 million as compared with $235.4 million in 2024, an increase of $25.5 million, or 10.8 percent. This increase was primarily due to higher retail rates, higher electric transmission, higher retail electric usage primarily driven by weather, and Montana natural gas transportation. These were offset in part by Montana property tax tracker collections, non-recoverable Montana electric supply costs, depreciation, and operating and maintenance expenses.
Current wording
Consolidated gross margin for the nine months ended September 30, 2025 was $387.8 million as compared with $338.3 million in 2024, an increase of $49.5 million, or 14.6 percent. This increase was primarily due to higher retail rates, natural gas and electric usage, electric transmission revenues, and natural gas transportation revenues. These were partly offset by higher operating and maintenance expense, depreciation, Montana property tax tracker collections, and non-recoverable Montana electric supply costs.
Previous wording
Consolidated utility margin for the six months ended June 30, 2025 was $595.9 million as compared with $544.1 million for the same period in 2024, an increase of $51.8 million, or 9.5 percent. Primary components of the change in utility margin include the following (in millions):
Current wording
Consolidated utility margin for the nine months ended September 30, 2025 was $895.9 million as compared with $801.3 million for the same period in 2024, an increase of $94.6 million, or 11.8 percent. Primary components of the change in utility margin include the following (in millions):
Previous wording
Consolidated operating expenses, excluding fuel, purchased supply and direct transmission expense, were $410.3 million for the six months ended June 30, 2025, as compared with $380.3 million for the six months ended June 30, 2024. Primary components of the change include the following (in millions):
Current wording
Consolidated operating expenses, excluding fuel, purchased supply and direct transmission expense, were $630.1 million for the nine months ended September 30, 2025, as compared with $569.7 million for the nine months ended September 30, 2024. Primary components of the change include the following (in millions):
Previous wording
Consolidated operating income for the three months ended June 30, 2025 was $60.8 million as compared with $61.6 million in the same period of 2024. This decrease was primarily due to lower retail natural gas and electric usage primarily driven by weather, Montana property tax tracker collections, non-recoverable Montana electric supply costs, depreciation, and operating, administrative and general costs. These were partly offset by higher retail rates, higher electric transmission, and natural gas transportation revenues.
Current wording
Consolidated operating income for the nine months ended September 30, 2025 was $265.8 million as compared with $231.6 million in the same period of 2024. This increase was primarily due to new rates, customer usage, electric transmission revenues, and natural gas transportation revenues. These were partly offset by higher operating, administrative, and general costs, including merger-related costs, depreciation, Montana property tax tracker collections, and non-recoverable Montana electric supply costs.
Previous wording
Consolidated interest expense was $72.8 million for the six months ended June 30, 2025 as compared with $62.9 million for the same period of 2024. This increase was due to higher borrowings and interest rates and lower capitalization of AFUDC.
Current wording
Consolidated interest expense was $111.1 million for the nine months ended September 30, 2025 as compared with $96.3 million for the same period of 2024. This increase was due to higher borrowings and interest rates and lower capitalization of AFUDC.
Previous wording
Consolidated other income was $4.0 million for the six months ended June 30, 2025 as compared to $10.5 million during the same period of 2024. This decrease was primarily due to lower capitalization of AFUDC, a prior year reversal of $2.3 million from a previously disclosed CREP penalty due to a favorable legal ruling, and a $1.0 million expense accrual related to an estimated penalty for the CREP informed by a recent MPSC ruling, partly offset by an increase of $2.5 million driven by a prior year non-cash impairment of an alternative energy storage equity investment.
Current wording
Consolidated other income was $9.1 million for the nine months ended September 30, 2025 as compared to $19.6 million during the same period of 2024. This decrease was primarily due to lower capitalization of AFUDC, a prior year reversal of $2.3 million from a previously disclosed CREP penalty due to a favorable legal ruling, and a $1.0 million expense accrual related to an estimated penalty for the CREP informed by a recent MPSC ruling, partly offset by an increase of $2.5 million driven by a prior year non-cash impairment of an alternative energy storage equity investment.
Previous wording
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, 2025, we under-collected supply costs of $7.6 million resulting in an increase to our under collection of costs, and recorded a decrease in pre-tax earnings of $0.8 million (10 percent of the PCCAM Base cost variance). 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).
Current wording
For the three months ended September 30, 2025, we under-collected supply costs of $21.1 million resulting in an increase to our under collection of costs, and recorded a decrease in pre-tax earnings of $2.3 million (10 percent of the PCCAM Base cost variance). For the three months ended September 30, 2024, we over-collected supply costs of $5.9 million resulting in a reduction to our under collection of costs, and recorded an increase in pre-tax earnings of $0.7 million (10 percent of the PCCAM Base cost variance).
Previous wording
The following summarizes the components of the changes in electric utility margin for the six months ended June 30, 2025 and 2024 (in millions):
Current wording
The following summarizes the components of the changes in electric utility margin for the nine months ended September 30, 2025 and 2024 (in millions):
Previous wording
The following summarizes the components of the changes in natural gas utility margin for the six months ended June 30, 2025 and 2024:
Current wording
The following summarizes the components of the changes in natural gas utility margin for the nine months ended September 30, 2025 and 2024:
Previous wording
As of June 30, 2025, our total net liquidity was approximately $317.9 million, including $2.9 million of cash and cash equivalents and $315.0 million of revolving credit facility availability with no letters of credit outstanding.
Current wording
As of September 30, 2025, our total net liquidity was approximately $262.2 million, including $6.2 million of cash and cash equivalents and $256.0 million of revolving credit facility availability with no letters of credit outstanding.
Previous wording
As of June 30, 2025, cash, cash equivalents, and restricted cash were $26.5 million as compared with $29.0 million as of December 31, 2024 and $31.0 million as of June 30, 2024. Cash provided by operating activities totaled $211.6 million for the six months ended June 30, 2025 as compared with $223.9 million during the six months ended June 30, 2024. The changes in cash flows from operating activities generally follow the results of operations, as discussed above in the consolidated results of operations for the six months ended June, 2025, and are affected by changes in working capital. The decrease in cash provided by operating activities is primarily due to lower collections of accounts receivable balances due to timing of colder weather and an increase in our net cash outflows for energy supply costs, as shown in the table below.
Current wording
As of September 30, 2025, cash, cash equivalents, and restricted cash were $30.5 million as compared with $29.0 million as of December 31, 2024 and $27.9 million as of September 30, 2024. Cash provided by operating activities totaled $338.3 million for the nine months ended September 30, 2025 as compared with $343.9 million during the nine months ended September 30, 2024. The changes in cash flows from operating activities generally follow the results of operations, as discussed above in the consolidated results of operations for the nine months ended September, 2025, and are affected by changes in working capital. The decrease in cash provided by operating activities is primarily due to merger transaction costs, lower collections of accounts receivable balances due to timing of colder weather, and an increase in our net cash outflows for energy supply costs, as shown in the table below, partly offset by the proceeds from production tax credits transferred.
Previous wording
Cash used in investing activities totaled $226.8 million during the six months ended June 30, 2025, as compared with $248.3 million during the six months ended June 30, 2024. Plant additions during the first six months of 2025 include maintenance additions of approximately $149.4 million and capacity related capital expenditures of $71.6 million. Plant additions during the first six months of 2024 included maintenance additions of approximately $130.5 million and capacity related capital expenditures of approximately $116.9 million.
Current wording
Cash used in investing activities totaled $418.5 million during the nine months ended September 30, 2025, as compared with $405.1 million during the nine months ended September 30, 2024. Plant additions during the first nine months of 2025 include maintenance additions of approximately $261.3 million and capacity related capital expenditures of $113.2 million. Plant additions during the first nine months of 2024 included maintenance additions of approximately $216.5 million and capacity related capital expenditures of approximately $184.0 million. During the nine months ended September 30, 2025, we completed the acquisition of the Energy West Operations for $35.9 million. See Note 3 - Acquisition of Energy West Operations to the Condensed Consolidated Financial Statements included herein for additional information regarding this acquisition.
Previous wording
Cash provided by financing activities totaled $12.7 million during the six months ended June 30, 2025, as compared with $30.2 million during the six months ended June 30, 2024. During the six months ended June 30, 2025, cash provided by financing activities reflects proceeds from the issuance of debt of $500.0 million, partly offset by repayment of $300.0 million of Montana and South Dakota First Mortgage bonds, net repayments under our revolving lines of credit of $103.0 million, and payment of dividends of $80.7 million. 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 $100.0 million of Montana First Mortgage Bonds and payment of dividends of $79.3 million.
Current wording
Cash provided by financing activities totaled $81.7 million during the nine months ended September 30, 2025, as compared with $63.9 million during the nine months ended September 30, 2024. During the nine months ended September 30, 2025, cash provided by financing activities reflects proceeds from the issuance of long-term debt of $500.0 million and short-term borrowings of $50.0 million, partly offset by repayment of $300.0 million of Montana and South Dakota First Mortgage bonds, net repayments under our revolving lines of credit of $44.0 million, and payment of dividends of $121.0 million. During the nine months ended September 30, 2024, cash provided by financing activities reflects proceeds from the issuance of long-term debt of $215.0 million and short-term borrowings of $100.0 million, partly offset by payment of dividends of $118.9 million, repayment of 1.00 percent, $100.0 million of Montana First Mortgage Bonds, and net repayments under our revolving lines of credit of $32.0 million.
Previous wording
For information on our recent short-term borrowings activity, see Note 6 - Financing Activities to the Condensed Consolidated Financial Statements included herein. For further information on our short-term borrowings, see Note 10 - Short-
Current wording
For information on our recent short-term borrowings activity, see Note 7 - Financing Activities to the Condensed Consolidated Financial Statements included herein. For further information on our short-term borrowings, see Note 10 - Short-Term Borrowings and Credit Arrangements in the NorthWestern Energy Group Annual Report on Form 10-K for the year ended December 31, 2024.
Previous wording
As of June 30, 2025 and 2024, the outstanding balances of our credit facilities were $310.0 million and $213.0 million, respectively. As of July 25, 2025, the availability under our credit facilities was approximately $265.0 million, and there were no letters of credit outstanding.
Current wording
As of September 30, 2025 and 2024, the outstanding balances of our credit facilities were $369.0 million and $286.0 million, respectively. As of October 24, 2025, the availability under our credit facilities was approximately $278.0 million, and there were no letters of credit outstanding.
Previous wording
(1)Represents cash payments for long-term debt and excludes $15.1 million of debt discounts and debt issuance costs, net.
Current wording
(1)Represents cash payments for long-term debt and excludes $14.5 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 $124 to $130 per MWH through 2029. Ourestimated gross contractual obligation related to these QFs is approximately $198.8 million. A portion of the costs incurred to purchase this energy is recoverable through rates authorized by the MPSC, totaling approximately $179.3 million.
Current wording
(3)Certain QFs require us to purchase minimum amounts of energy at prices ranging from $124 to $130 per MWH through 2029. Ourestimated gross contractual obligation related to these QFs is approximately $183.7 million. A portion of the costs incurred to purchase this energy is recoverable through rates authorized by the MPSC, totaling approximately $166.1 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 5.68 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 5.51 percent on the outstanding balance through maturity of the facilities.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
The partial electric settlement includes, among other things, agreement on base revenue increases (excluding base revenues associated with YCGS), allocated cost of service, rate design, updates to the amount of revenues associated with property taxes
Previous report — wording carried elsewhere
(3) These items are flow-through costs. PCCAM reflects our fuel and purchased power costs.
Previous report — wording carried elsewhere
(4) These items are flow-through costs. PCCAM reflects our fuel and purchased power costs.
Previous report — wording carried elsewhere
Term Borrowings and Credit Arrangements in the NorthWestern Energy Group Annual Report on Form 10-K for the year ended December 31, 2024.