NorthWestern Energy Group, Inc. provides electricity and natural gas to customers in Montana, South Dakota, Nebraska, and Yellowstone National Park.
The company operates through its subsidiaries NW Corp and NWE Public Service. The company has generated and distributed electricity in South Dakota and distributed natural gas in South Dakota and Nebraska and has generated and distributed electricity and distributed natural gas in Montana.
On January 1, 2024, the company completed the second and f...
NorthWestern Energy Group, Inc. provides electricity and natural gas to customers in Montana, South Dakota, Nebraska, and Yellowstone National Park.
The company operates through its subsidiaries NW Corp and NWE Public Service. The company has generated and distributed electricity in South Dakota and distributed natural gas in South Dakota and Nebraska and has generated and distributed electricity and distributed natural gas in Montana.
On January 1, 2024, the company completed the second and final phase of its holding company reorganization.
Segments
The company operates through two segments: Electric Utility Operations and Natural Gas Utility Operations.
Electric Utility Operations
This segment includes the generation, purchase, transmission and distribution of electricity.
Natural Gas Utility Operations
This segment includes the production, purchase, transmission, storage, and distribution of natural gas.
The company’s customer base consists of a mix of residential, commercial, and diversified industrial customers.
The company’s energy portfolio reflects a balanced mix of clean and traditional resources, ensuring it can deliver reliable electricity to customers around the clock. In 2024, approximately 58 percent of the company’s electric portfolio—comprising owned and long-term resources—was carbon-free.
Montana Electric Operations
The company’s regulated electric utility business in Montana, which is conducted through NW Corp, includes generation, transmission, and distribution. The company’s service territory covers approximately 107,600 square miles, representing approximately 73 percent of Montana's land area. During 2024, the company delivered electricity to approximately 413,400 customers in 224 communities and their surrounding rural areas, 13 rural electric cooperatives and, in Wyoming, to the Yellowstone National Park.
Transmission and Distribution
The company’s electric system is composed of high voltage transmission lines and low voltage distribution lines.
In addition to delivering energy to distribution systems to serve customers, the company also transmits electricity for nonregulated entities owning generation, and utilities, cooperatives, and power marketers serving the Montana electricity market. The company’s total control area peak demand reached a peak of approximately 2,079 MWs on January 13, 2024. The company’s control area average demand for 2024 was approximately 1,372 MWs per hour, with total energy delivered of approximately 11.53 million MWHs.
The company’s transmission system is directly interconnected with Avista Corporation; Idaho Power Company; PacifiCorp; the Bonneville Power Administration; WAPA; and Montana Alberta Tie. Such interconnections, coupled with transmission line capacity made available under agreements with some of the above entities, permit the interchange, purchase, and sale of power among all major electric systems in the west interconnecting with the winter-peaking northern and summer-peaking southern regions of the western power system. The company provides wholesale transmission service and firm and non-firm transmission services for eligible transmission customers pursuant to its FERC OATT.
Electric Supply
The company’s annual retail electric supply load requirement averages approximately 759 MWs per day, with a peak load of approximately 1,300 MWs, and are supplied by owned and contracted resources and market purchases with multiple counterparties.
Owned generation resources supplied approximately 65 percent of the company’s retail load requirements for 2024. The company expects that approximately 81 percent of its retail obligations will be met by owned generation resources in 2025, reflecting the full year addition of YCGS which was placed into service in October 2024. In addition, the company has contracts with QFs totaling 556 MWs of nameplate capacity, including 94 MWs from waste petroleum coke and waste coal, 268 MWs from wind, 17 MWs from hydro, and 177 MWs from solar projects. The company’s several other long-term power purchase agreements, including contracts for 135 MWs nameplate capacity from wind generation, 310 MWs from unspecified resources, 52 MWs of natural gas generation, and 13 MWs of hydro supply. Load requirements during peak demand in excess of the company owned and long-term contracted resources will be satisfied with market purchases.
Western Energy Imbalance Market
The company entered the Western Energy Imbalance Market (EIM), operated by the California Independent System Operator, on June 16, 2021. The company has EIM transfer capability with PacifiCorp, Idaho Power Company, Bonneville Power Administration, Avista Corp, and Tacoma Power.
South Dakota Electric Operations
The company’s South Dakota electric utility business, which is conducted through NWE Public Service, operates as a vertically integrated generation, transmission and distribution utility. The company has the exclusive right to serve an area in South Dakota consisted of 25 counties. The company provides retail electricity to more than 65,300 customers in 117 communities in South Dakota.
Transmission and Distribution
The company’s electric system includes high voltage transmission and low voltage distribution lines.
The company’s South Dakota system is interconnected with the transmission facilities of Otter Tail Power Company; Montana-Dakota Utilities Co.; Xcel Energy Inc.; and WAPA. The company also has emergency interconnections with the transmission facilities of East River Electric Cooperative, Inc. and West Central Electric Cooperative.
The company is a transmission-owning member in the SPP, with its transmission facilities residing in zone 19 of the SPP footprint. Each year, the company reviews all new or modified transmission assets and transfer functional control of assets that qualify under the SPP Tariff to the SPP. This annual update goes into effect on April 1st each year. As of 31 December 2024, the company transferred control of 333 line miles of 115 kV facilities and over 158 line miles of 69 kV facilities. Along with SPP, the company’s South Dakota facilities have ties to MISO. The company has grandfathered agreements in MISO, which provides the company the access to move the power from the Coyote, Big Stone, and Neal power plants to its customers. Along with operating the transmission system, SPP also coordinates regional transmission planning for all of its members on an annual basis through its Integrated Transmission Planning (ITP) process. The company’s annual participation in the ITP process includes model development, system needs assessment, and solution development to address identified needs.
Electric Supply
The company’s annual retail electric supply load requirements average approximately 200 MWs, with a peak load of approximately 325 MWs, and are supplied by owned and contracted resources and market purchases. The company uses market purchases and peaking generation to provide peak supply in excess of its base-load capacity. The company is a member of the SPP. As a market participant in SPP, the company buys and sells wholesale energy and reserves in both day-ahead and real-time markets through the operation of a single, consolidated SPP balancing authority. The company and other SPP members submit into the SPP market both offers to sell its generation and bids to purchase power to serve its load. SPP optimizes next-day and real-time generation dispatch across the region and provides participants with greater access to economic energy. Marketing activities in SPP are handled for the company by a third-party provider acting as its agent.
Electric supply resources include 211 MWs from jointly owned coal plants and 138 MWs from two natural gas-fired plants. Additional resources include several peaking units and an 80 MW wind facility. The company also purchases the output of four wind projects, three of which are QFs, under power purchase agreements. Actual output for the company’s wind resources varies based upon weather conditions.
Natural Gas Operations
Montana
The company’s regulated natural gas utility business in Montana, which is conducted through NW Corp, includes production, storage, transmission and distribution. During 2024, the company distributed natural gas to approximately 214,500 customers in 121 Montana communities over a system that consists of approximately 5,200 miles of underground distribution pipelines. The company also serves several smaller distribution companies that provide service to approximately 34,000 customers. The company transmits natural gas in Montana from production receipt points and storage facilities to distribution points and other nonaffiliated transmission systems. The company’s transported natural gas volumes of approximately 50 Bcf during the year ended December 31, 2024.
The company has connections in Montana with four major, unaffiliated transmission systems: Williston Basin Interstate Pipeline, NOVA Gas Transmission Ltd., Colorado Interstate Gas, and Spur Energy. Twelve compressor sites provide more than 48,600 horsepower on the transmission line and an additional 15,900 horsepower at the company’s storage fields, capable of moving more than 400,000 dekatherms per day. In addition, the company owns and operates two transmission pipelines through its subsidiaries, Canadian-Montana Pipe Line Corporation and Havre Pipeline Company, LLC.
Natural gas is used primarily for residential and commercial heating, and as fuel for three electric generating facilities. The demand for natural gas largely depends upon weather conditions. The company’s Montana retail natural gas supply requirements for the year ended December 31, 2024, were approximately 22.4 Bcf. The company’s Montana natural gas supply requirements for electric generation fuel for the year ended December 31, 2024, were approximately 8.0 Bcf. The company’s contracted with several major producers and marketers with varying contract durations to provide the anticipated supply to meet ongoing requirements. The company’s natural gas supply requirements are fulfilled through third-party fixed-term purchase contracts, short-term market purchases and owned production. The company’s portfolio approach to natural gas supply is intended to enable it to maintain a diversified supply of natural gas sufficient to meet its supply requirements.
Owned Production and Storage - As of December 31, 2024, these owned reserves totaled approximately 28.2 Bcf and are estimated to provide approximately 2.6 Bcf in 2025, or approximately 11 percent of the company’s expected annual retail natural gas load in Montana. In addition, the company owns and operates three working natural gas storage fields in Montana with aggregate working gas capacity of approximately 17.85 Bcf and maximum aggregate daily deliverability of approximately 194,000 dekatherms.
South Dakota and Nebraska
Through NWE Public Service, the company provides natural gas to approximately 50,500 customers in 81 South Dakota communities and approximately 43,300 customers in 4 Nebraska communities. In South Dakota, the company’s also transport natural gas for nine gas-marketing firms and three large end-user accounts. In Nebraska, the company transports natural gas for four gas-marketing firms and one large end-user account. The company delivered approximately 31.4 Bcf of third-party transportation volume on its South Dakota distribution system and approximately 3.7 Bcf of third-party transportation volume on its Nebraska distribution system during 2024.
The company’s South Dakota natural gas supply requirements for the year ended December 31, 2024, were approximately 5.5 Bcf. The company contracts with a third party under an asset management agreement to manage transportation and storage of supply to minimize cost and price volatility to its customers. In Nebraska, the company’s natural gas supply requirements for the year ended December 31, 2024, were approximately 4.0 Bcf. The company contracts with a third party under an asset management agreement that includes pipeline capacity, supply, and asset optimization activities. To supplement firm gas supplies in South Dakota and Nebraska, the company contracts for firm natural gas storage services to meet the heating season and peak day requirements of its customers.
Municipal Natural Gas Franchise Agreements
The company has municipal franchises to provide natural gas service in the communities it serves. The terms of the franchises vary by community. The company’s Montana franchises typically have a fixed 10-year term and continue for additional 10-year terms unless and until canceled, with 5 years notice. The maximum term permitted under Nebraska law for these franchises is 25 years while the maximum term permitted under South Dakota law is 20 years. The company’s policy generally is to seek renewal or extension of a franchise in the last year of its term. The company continues to serve those customers while it obtains formal renewals. During the next five years, eleven of the company’s Montana franchises could expire by action taken by the franchises' city or town, which account for approximately 79,362 or 37.95 percent of its Montana natural gas customers.
Seasonality
The company’s utility operations are seasonal, and weather patterns can have a material impact on operating performance. Consumption of electricity is often greater in the summer and winter months for cooling and heating, respectively. Because natural gas is used primarily for residential and commercial heating, the demand for this product depends heavily upon weather patterns throughout its service territory, and a significant amount of natural gas revenues are recognized in the first and fourth quarters related to the heating season.
Customers
The company provides electricity and / or natural gas to approximately 787,000 customers in Montana, South Dakota, Nebraska and Yellowstone National Park, through its subsidiaries NW Corp and NWE Public Service.
Government Regulation
The company’s provision of utility service is regulated by the Montana Public Service Commission (MPSC), the South Dakota Public Utilities Commission (SDPUC), the Nebraska Public Service Commission (NPSC), and the Federal Energy Regulatory Commission (FERC). The company is also regulated by many other state and federal agencies. For example, because the company's operations impact land, waterways and the air, it is subject to a wide range of regulations administered by the federal EPA, the U.S. Fish & Wildlife Service, and parallel state agencies regulating environmental and natural resources in Montana, South Dakota and Nebraska. Another example relates to the company’s provision of natural gas service. The U.S. Department of Transportation through the Pipeline and Hazardous Materials Safety Administration, along with its state partners, regulates natural gas pipeline and natural gas storage field safety. As a publicly-traded company, the company is subject to the SEC’s requirements regarding financial reporting, disclosures, and laws and regulations protecting investors. The company is subject to the Occupational Safety and Health Administration (OSHA), which regulates workplace safety. The company is also subject to local zoning laws and regulations.
The company’s Montana operations are subject to the jurisdiction of the MPSC with respect to rates, terms and conditions of service, accounting records, electric service territorial issues and other aspects of its operations, including when the company issues, assumes, or guarantees securities in Montana, or when it creates liens on its regulated Montana properties.
The company’s South Dakota operations are subject to SDPUC jurisdiction with respect to rates, terms and conditions of service, accounting records, electric service territorial issues and other aspects of its electric and natural gas operations.
The company’s Nebraska natural gas rates and terms and conditions of service for residential and smaller commercial customers are regulated by the NPSC. Under the Nebraska State Natural Gas Regulation Act, a regulated natural gas utility may propose a change in rates to its regulated customers, if it files an application for a rate increase with the NPSC and with the communities in which it serves customers.
The company is subject to FERC's jurisdiction and regulations with respect to rates for electric transmission service and electricity sold at wholesale, hydro licensing and operations, the issuance of certain securities, incurrence of certain long-term debt, and compliance with mandatory reliability standards, among other things.
The company’s Montana wholesale transmission customers, such as cooperatives, industrial customers, and other customers that have third-party commodity supply providers, receive transmission delivery service under its Open Access Transmission Tariff (OATT), which is on file with FERC. The OATT defines the terms, conditions, and rates of the company’s Montana transmission service, including ancillary services. These transmission rates are adjusted annually through formula rates. The company’s South Dakota transmission operations are in the Southwest Power Pool (SPP), and transmission service is provided under the SPP OATT.
The company conducts limited interstate transportation in Montana and South Dakota that is subject to FERC jurisdiction, and FERC has allowed the MPSC and SDPUC to set the rates for this interstate service. The company has capacity agreements in South Dakota and Nebraska with interstate pipelines that are also subject to FERC jurisdiction.
The company hydroelectric generating facilities are licensed by the FERC and operated under the terms of those licenses and FERC regulations.
The company must comply with the standards and requirements that apply to the NERC functions for which it has registered in both the Midwest Reliability Organization (MRO) for its South Dakota operations and the Western Electricity Coordination Council (WECC) for its Montana operations.
History
NorthWestern Energy Group, Inc. was founded in 1923. The company was incorporated in 1923.
