NorthWestern (US:NWE)2023-02-16 23:48Customer Base and Service Areas - NorthWestern Corporation provides electricity and natural gas to approximately 764,200 customers across Montana, South Dakota, Nebraska, and Yellowstone National Park[50] - The company serves approximately 398,200 customers in Montana, with residential, commercial, industrial, and other sales accounting for approximately 45%, 46%, 5%, and 4% of retail electric utility revenue, respectively[64] - In South Dakota, the company provides retail electricity to over 64,700 customers, with residential and commercial sales making up approximately 38% and 60% of retail electric utility revenue, respectively[80] - The company distributed natural gas to approximately 209,100 customers in 118 Montana communities, with a total transportation volume of approximately 47 Bcf for the year ended December 31, 2022[95] - In South Dakota, the company provided natural gas to approximately 49,200 customers, with supply requirements for the year ended December 31, 2022, being approximately 6.3 Bcf[99] Business Segments and Operations - The company operates in three business segments: electric utility operations, natural gas utility operations, and unallocated corporate costs[51] - Utility operations are seasonal, with higher electricity consumption in summer and winter months, and significant natural gas revenues recognized in the first and fourth quarters[52] - The company has a total of 6,597 miles of electric transmission lines and 18,534 miles of electric distribution lines in Montana[66] - The company operates approximately 5,100 miles of underground distribution pipelines in Montana, with 135 city gate stations[96] - The company has capacity agreements with interstate pipelines in South Dakota and Nebraska, which are subject to FERC jurisdiction[120] Sustainability and Environmental Goals - The company emphasizes sustainability by balancing economic, societal, and environmental objectives to meet current and future energy infrastructure needs[55] - In 2022, approximately 55% of the company's retail electricity needs were sourced from carbon-free resources, a decrease from 56% in 2021[57] - The company aims for a carbon-free power sector by 2035 and net zero carbon emissions by 2050, aligning with federal climate initiatives[128] - The company has committed to achieving Net-Zero for Scope 1 and Scope 2 carbon and methane emissions by 2050[56] - The transition to Net-Zero carbon emissions by 2050 will depend on technological advancements and the retirement of existing coal fleet[59] Generation and Resource Management - Owned generation resources supplied approximately 65% of retail load requirements in 2022, with expectations to maintain this level in 2023[69] - The company has contracts with Qualifying Facilities (QFs) totaling 469 MWs of nameplate capacity, including resources from wind, hydro, and solar projects[69] - The company completed the construction of the 58 MW Bob Glanzer Generating Station in the summer of 2022, which includes flexible reciprocating internal combustion engines[89] - The company develops an Integrated Resource Plan (IRP) every two to three years to identify resource needs and risks, which informs the resource solicitation process[60] - The company plans to file an updated Integrated Resource Plan (IRP) in the first quarter of 2023 to address projected generation capacity deficits[76] Financial Overview and Regulatory Environment - The company has a total rate base of approximately $4,537.7 million across its jurisdictions as of December 31, 2022, with authorized returns on equity ranging from 6.92% to 10.40%[106] - The company expects a final order regarding its Montana electric and natural gas rate review filing in 2023, which includes requests for an increase in authorized rate base and return on equity[108] - The company is subject to various regulatory bodies, including the MPSC, SDPUC, NPSC, and FERC, which oversee its utility service operations and rate adjustments[104] Workforce and Safety - The company has 1,530 employees as of December 31, 2022, with 1,232 in Montana and 298 in South Dakota or Nebraska[136] - 37% of Montana employees are covered by collective bargaining agreements, which were renegotiated in 2022 and will expire in 2026[136] - The recordable incident rate for work-related injuries was 1.57 in 2022, compared to 1.77 in 2021, indicating an improvement in safety performance[144] Corporate Governance and Diversity - Approximately 79% of the targeted compensation for the CEO is at risk based on performance metrics[140] - The executive team is 50% female, and the board of directors is 38% female, reflecting the company's commitment to diversity[143] - The company offers competitive salaries and benefits, with a focus on internal pay equity, where the CEO's compensation was 26 times that of the median employee in 2022[139] Infrastructure and Capacity - The total control area peak demand reached an all-time high of approximately 2,073 MWs on December 22, 2022, with an average demand of approximately 1,379 MWs per hour for the year[66] - The annual retail electric supply load requirements average approximately 750 MWs, with a peak load of approximately 1,250 MWs, supplied by owned and contracted resources and market purchases[68] - The electric transmission system includes 6,597 miles of electric transmission lines and 18,534 miles of electric distribution lines, with a total of 394 substations[66] Policy and Investment - The company supports policies that enable investment in critical infrastructure and responsible stewardship, emphasizing the importance of public policy for service reliability[58] - The company is subject to extensive environmental regulations that may impact operations and require compliance modifications[127] - The company has increased its environmental sustainability efforts over the past 100 years while maintaining reliable and affordable services[56]