NorthWestern (US:NWE)2021-02-12 00:35Customer Base and Service Areas - NorthWestern Corporation serves approximately 743,000 customers across Montana, South Dakota, Nebraska, and Yellowstone National Park[48]. - The Montana electric utility business serves approximately 384,700 customers across 208 communities, with residential, commercial, industrial, and other sales contributing 44%, 47%, 5%, and 4% respectively to retail electric utility revenue in 2020[60]. - In South Dakota, the electric utility serves over 63,900 customers, with residential, commercial, and other sales contributing approximately 39%, 59%, and 2% respectively to retail electric utility revenue in 2020[79]. - The company serves approximately 48,000 customers in South Dakota and 42,700 customers in Nebraska, delivering approximately 27.5 Bcf and 3.7 Bcf of third-party transportation volume, respectively, during 2020[95]. Business Segments and Operations - The company operates in three business segments: electric utility operations, natural gas utility operations, and unallocated corporate costs[49]. - Electric utility operations include generation, purchase, transmission, and distribution of electricity, while natural gas operations encompass production, purchase, transmission, storage, and distribution[50]. - The utility operations are not dependent on a single customer, reducing the risk of financial impact from losing major clients[50]. - The company has contracted resources totaling 388 MWs, including 268 MWs from wind and 17 MWs from solar projects[64]. Sustainability and Environmental Commitment - The company emphasizes sustainability by balancing economic, societal, and environmental objectives to meet current and future energy infrastructure needs[53]. - Approximately 65% of the company's retail energy needs in 2020 were sourced from carbon-free resources, significantly higher than the U.S. electric power industry's average of 29%[54]. - In Montana, nearly 70% of the energy supplied comes from carbon-free sources, with a commitment to reduce carbon intensity by 90% by 2045 compared to 2010 levels[58]. - The company has committed to reducing the carbon intensity of its electric energy portfolio for Montana by 90% by 2045 compared to 2010 levels, having already reduced it by over 50% in the last decade[58]. Financial Performance and Regulatory Oversight - The company is subject to regulatory oversight, which can impact financial performance and operational costs[15]. - The total rate base for Montana electric delivery and production is approximately $2,764.3 million, with an authorized overall rate of return of 6.92%[100]. - The company has faced risks from external events, regulatory changes, and economic conditions that could materially affect its financial performance[15]. Energy Demand and Supply - The demand for natural gas is heavily influenced by weather patterns, with significant revenue recognized in the first and fourth quarters due to heating needs[50]. - Seasonal weather patterns significantly affect operating performance, with higher electricity consumption during summer and winter months[50]. - The total control area peak demand reached approximately 1,799 MW on January 14, 2020, with an average demand of approximately 1,305 MW per hour and total energy delivered exceeding 12.0 million MWh in 2020[61]. - The company forecasts a generation capacity deficit of 725 MW by 2025, necessitating resource planning and acquisition activities[73]. Workforce and Employee Relations - As of December 31, 2020, the company employed 1,530 individuals, with 1,225 in Montana and 305 in South Dakota or Nebraska[128]. - The company has a diverse workforce, with 28% of employees being female and 24% of management positions held by women[136]. - The company has engaged third-party evaluations to ensure pay equity between male and female employees[136]. - The company has a good relationship with employees, with 38% of Montana employees covered by collective bargaining agreements[128]. Safety and Compliance - The company achieved a record safety year in 2020, reducing the recordable incident rate from 1.86 to 1.36 and the lost time incident rate from 0.58 to 0.39 compared to 2019[137]. - The company is committed to maintaining compliance with extensive environmental regulations, which may impact operations and require modifications to facilities[122]. - The company is subject to FERC regulations regarding electric transmission service and must comply with mandatory reliability standards enforced by NERC[115]. Infrastructure and Resource Management - The total electric transmission lines span 6,809 miles, with 497 miles at 500 kV and 956 miles at 230 kV[61]. - The total electric distribution lines measure 18,068 miles, including 13,071 miles of overhead lines and 4,997 miles of underground lines[61]. - Owned generation resources accounted for approximately 60% of retail load requirements in 2020, with expectations to increase to 65% in 2021[64]. - The company is focused on maintaining a diverse energy portfolio with a mix of owned and contracted resources[66].