- Third quarter 2024 GAAP EPS of $0.76, compared to $0.48 in 2023
- Third quarter 2024 adjusted non-GAAP EPS of $0.65, compared to $0.49 in 2023
- Announces $0.65 per share quarterly dividend
- Revises 2024 earnings guidance in light of delayed Montana interim rate decision
BUTTE, Mont. & SIOUX FALLS, S.D.–(BUSINESS WIRE)–NorthWestern Energy Group, Inc. d/b/a NorthWestern Energy (Nasdaq: NWE) reported financial results for the third quarter 2024. Net income for the period was $46.8 million, or $0.76 per diluted share, as compared with net income of $29.3 million, or $0.48 per diluted share, for the same period in 2023. NorthWestern’s third quarter 2024 non-GAAP net income and non-GAAP earnings per share were $39.7 million and $0.65, respectively, compared to $30.0 million and $0.49 in 2023. See “Adjusted Non-GAAP Earnings” and “Non-GAAP Financial Measures” sections below for more information on these measures.
Third quarter earnings were driven by rate relief in Montana and South Dakota, higher electric transmission revenues, and an income tax benefit, partly offset by mild weather, insurance costs, depreciation, and interest expense.
“As we continue to execute on our strategic priorities, we are pleased to report another quarter of solid earnings growth,” said Brian Bird, President and CEO. “We remain committed to providing reliable and affordable energy for our customers. Yellowstone County Generating Station began to serve customers in October, providing critical capacity as we go into the winter season. Meanwhile, we are actively working with the commissions in Montana, South Dakota, and Nebraska to advance our rate reviews and ensure timely recovery of the substantial investments we’ve made on our customers behalf.”
THIRD QUARTER 2024 COMPARED TO THIRD QUARTER 2023
The increase in net income was primarily due to new base rates in Montana and South Dakota, electric transmission revenues, electric retail volumes, Montana property tax tracker collections, lower non-recoverable Montana electric supply costs, and an income tax benefit from a change to the gas repairs safe harbor method. These were offset in part by natural gas retail volumes, depreciation, operating, administrative and general costs, and interest expense. Diluted earnings per share increased as a result of higher net income but was partially offset by increased average shares outstanding due to equity issuances during 2023.
EARNINGS GUIDANCE
We are revising our 2024 non-GAAP EPS guidance range to $3.32 to $3.47 from our original guidance of $3.42 to $3.62 in light of the delay in interim rate relief in our Montana rate review. The revised 2024 midpoint of approximately $3.40 represents a 4% increase off our 2023 non-GAAP earnings per share of $3.27.
This guidance is based upon, but not limited to, the following major assumptions:
- Normal weather in our service territories;
- Interim rates in Montana in December 2024;
- An effective income tax rate of approximately 9%-11%; and
- Diluted average shares outstanding of approximately 61.4 million.
We are also affirming our long-term (5 year) diluted earnings per share growth guidance of 4% to 6% from a 2022 base year of $3.18 diluted earnings per share on a non-GAAP basis. We expect rate base growth of 4% to 6%. Our current capital investment program is sized to provide for no equity issuances. Future generation capacity additions or other strategic opportunities may require equity financing.
Dividend Declared
NorthWestern Energy Group’s Board of Directors declared a quarterly common stock dividend of $0.65 per share payable December 31, 2024 to common shareholders of record as of December 13, 2024. While currently above our targeted 60-70 percent dividend payout range, over the longer-term we expect to maintain a payout within the range.
Additional information regarding this release can be found in the earnings presentation at https://www.northwesternenergy.com/investors/earnings.
COMPANY UPDATES
Yellowstone County 175 MW plant
Construction of the new generation facility was substantially completed and the plant placed in service in October 2024. The lawsuit challenging the Yellowstone County Generating Station 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 September 30, 2024, total costs of approximately $305.6 million have been incurred, with expected total costs of approximately $310.0 million to $320.0 million.
Regulatory Update
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:
Montana Rate Review – In July 2024, we filed a Montana electric and natural gas rate review with the Montana Public Service Commission (MPSC). The filing requests a base rate annual revenue increase of $156.5 million 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 was placed in service in October 2024.
Our filing included a request for interim base rates to be effective October 1, 2024. Implementation of interim base rates, if any, has been delayed beyond our requested effective date as the MPSC has not yet made a decision on the interim rate request.
The MPSC has developed its procedural schedule for our rate review request including a hearing scheduled to commence on April 22, 2025. If a final order is not received by May 23, 2025, which is 270 days from acceptance of our filing, we intend to implement, as permitted by the MPSC regulations, our requested rates, which will be subject to refund, until a final order is received.
South Dakota Natural Gas Rate Review – In June 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.
Nebraska Natural Gas Rate Review – In June 2024, we filed a natural gas rate review with the Nebraska Public Service Commission (NPSC). 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 rates, which increased base natural gas rates $2.3 million, were implemented on October 1, 2024. Interim rates will remain in effect on a refundable basis until the NPSC issues a final order.
Environmental Protection Agency (EPA) Rules
On April 25, 2024, the EPA released Greenhouse Gas (GHG) Rules for existing coal-fired facilities and new coal and natural gas-fired facilities as well as Mercury and Air Toxics Standard (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.
Acquisition of Energy West Montana Assets
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.
Colstrip – Puget Sound Energy Transaction
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. The ultimate amount of Puget’s ownership interest we acquire is contingent on a right-of-first-refusal held by other Colstrip owners which, if exercised prior to expiration in fourth quarter 2024, would reduce our acquired interest proportionately.
Acquisition of Puget’s entire 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), would 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.
Transmission Investment
In August 2024, the U.S. Department of Energy awarded a $700 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 million of the award is earmarked for the Colstrip Transmission System Upgrade. The NPC project, estimated to be a $3.6 billion investment, 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. 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. In addition to the Colstrip Transmission System Upgrade, we are considering an investment in NPC and are engaged in regional transmission development activities.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
|
(in millions) |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
Reconciliation of gross margin to utility margin: |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|||||||||||||
|
Operating Revenues |
|
$ |
345.2 |
|
$ |
321.1 |
$ |
1,140.4 |
|
$ |
1,066.1 |
|||||
|
Less: Fuel, purchased supply and direct transmission expense (exclusive of depreciation and depletion shown separately below) |
|
|
87.9 |
|
|
|
88.9 |
|
|
339.1 |
|
|
|
322.0 |
|
|
|
Less: Operating and maintenance |
|
|
55.9 |
|
|
|
53.2 |
|
|
167.4 |
|
|
|
163.9 |
|
|
|
Less: Property and other taxes |
|
|
41.6 |
|
|
|
43.3 |
|
|
125.0 |
|
|
|
132.6 |
|
|
|
Less: Depreciation and depletion |
|
|
57.0 |
|
|
|
52.2 |
|
|
170.6 |
|
|
|
157.8 |
|
|
|
Gross Margin |
|
|
102.8 |
|
|
|
83.5 |
|
|
338.3 |
|
|
|
289.8 |
|
|
|
Operating and maintenance |
|
|
55.9 |
|
|
|
53.2 |
|
|
167.4 |
|
|
|
163.9 |
|
|
|
Property and other taxes |
|
|
41.6 |
|
|
|
43.3 |
|
|
125.0 |
|
|
|
132.6 |
|
|
|
Depreciation and depletion |
|
|
57.0 |
|
|
|
52.2 |
|
|
170.6 |
|
|
|
157.8 |
|
|
|
Utility Margin(1) |
|
$ |
257.3 |
|
|
$ |
232.2 |
|
$ |
801.3 |
|
|
$ |
744.1 |
|
|
|
(1) Non-GAAP financial measure. See “Non-GAAP Financial Measures” below. |
||||||||||||||||
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
(in millions, except per share amounts) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Revenues |
$ |
345.2 |
|
$ |
321.1 |
|
$ |
1,140.4 |
|
$ |
1,066.1 |
||||
|
Fuel, purchased supply and direct transmission expense(1) |
|
87.9 |
|
|
|
88.9 |
|
|
|
339.1 |
|
|
|
322.0 |
|
|
Utility Margin (2) |
|
257.3 |
|
|
|
232.2 |
|
|
|
801.3 |
|
|
|
744.1 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Operating and maintenance |
|
55.9 |
|
|
|
53.2 |
|
|
|
167.4 |
|
|
|
163.9 |
|
|
Administrative and general |
|
34.9 |
|
|
|
29.4 |
|
|
|
106.7 |
|
|
|
94.1 |
|
|
Property and other taxes |
|
41.6 |
|
|
|
41.8 |
|
|
|
125.0 |
|
|
|
131.0 |
|
|
Depreciation and depletion |
|
57.0 |
|
|
|
52.2 |
|
|
|
170.6 |
|
|
|
157.8 |
|
|
Total Operating Expenses (3) |
|
189.4 |
|
|
|
176.6 |
|
|
|
569.7 |
|
|
|
546.8 |
|
|
Operating income |
|
67.9 |
|
|
|
55.6 |
|
|
|
231.6 |
|
|
|
197.3 |
|
|
Interest expense, net |
|
(33.4 |
) |
|
|
(28.7 |
) |
|
|
(96.3 |
) |
|
|
(85.1 |
) |
|
Other income, net |
|
9.1 |
|
|
|
4.1 |
|
|
|
19.6 |
|
|
|
12.9 |
|
|
Income before income taxes |
|
43.7 |
|
|
|
31.0 |
|
|
|
155.0 |
|
|
|
125.1 |
|
|
Income tax benefit (expense) |
|
3.2 |
|
|
|
(1.7 |
) |
|
|
(11.4 |
) |
|
|
(14.1 |
) |
|
Net Income |
|
46.8 |
|
|
|
29.3 |
|
|
|
143.6 |
|
|
|
111.0 |
|
|
Basic Shares Outstanding |
|
61.3 |
|
|
|
60.4 |
|
|
|
61.3 |
|
|
|
60.0 |
|
|
Earnings per Share – Basic |
$ |
0.76 |
|
|
$ |
0.48 |
|
|
$ |
2.34 |
|
|
$ |
1.85 |
|
|
Diluted Shares Outstanding |
|
61.4 |
|
|
|
60.5 |
|
|
|
61.4 |
|
|
|
60.0 |
|
|
Earnings per Share – Diluted |
$ |
0.76 |
|
|
$ |
0.48 |
|
|
$ |
2.34 |
|
|
$ |
1.85 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Dividends Declared per Common Share |
$ |
0.65 |
|
|
$ |
0.64 |
|
|
$ |
1.95 |
|
|
$ |
1.92 |
|
|
(1) Exclusive of depreciation and depletion expense. |
|||||||||||||||
|
(2) Utility Margin is a Non-GAAP financial measure. See “Reconciliation of gross margin to utility margin” above and “Non-GAAP Financial Measures” below. |
|||||||||||||||
|
(3) Excluding fuel, purchased supply and direct transmission expense. |
|||||||||||||||
|
Note: Subtotal variances may exist due to rounding. |
|||||||||||||||
RECONCILIATION OF PRIMARY CHANGES DURING THE QUARTER
|
|
Three Months Ended September 30, 2024 vs. 2023 |
||||||||||||||
|
|
Pre-tax Income |
|
Income Tax (Expense) Benefit (3) |
|
Net Income |
|
Diluted Earnings Per Share |
||||||||
|
|
(in millions, except EPS) |
|
|
||||||||||||
|
Third Quarter, 2023 |
$ |
31.0 |
|
|
$ |
(1.7 |
) |
|
$ |
29.3 |
|
|
$ |
0.48 |
|
|
Variance in revenue and fuel, purchased supply, and direct transmission expense(1) items impacting net income: |
|
|
|
|
|
|
|
||||||||
|
Base rates |
|
17.2 |
|
|
|
(4.4 |
) |
|
|
12.8 |
|
|
|
0.21 |
|
|
Electric transmission revenue |
|
5.9 |
|
|
|
(1.5 |
) |
|
|
4.4 |
|
|
|
0.07 |
|
|
Electric retail volumes |
|
3.6 |
|
|
|
(0.9 |
) |
|
|
2.7 |
|
|
|
0.04 |
|
|
Montana property tax tracker collections |
|
1.5 |
|
|
|
(0.4 |
) |
|
|
1.1 |
|
|
|
0.02 |
|
|
Montana natural gas transportation |
|
0.9 |
|
|
|
(0.2 |
) |
|
|
0.7 |
|
|
|
0.01 |
|
|
Non-recoverable Montana electric supply costs |
|
0.6 |
|
|
|
(0.2 |
) |
|
|
0.4 |
|
|
|
0.01 |
|
|
Natural gas retail volumes |
|
(0.3 |
) |
|
|
0.1 |
|
|
|
(0.2 |
) |
|
|
— |
|
|
Production tax credits, offset within income tax benefit |
|
(0.2 |
) |
|
|
0.2 |
|
|
|
— |
|
|
|
— |
|
|
Other |
|
(1.2 |
) |
|
|
0.3 |
|
|
|
(0.9 |
) |
|
|
(0.01 |
) |
|
|
|
|
|
|
|
|
|
||||||||
|
Variance in expense items(2) impacting net income: |
|
|
|
|
|
|
|
||||||||
|
Operating, maintenance, and administrative |
|
(5.5 |
) |
|
|
1.4 |
|
|
|
(4.1 |
) |
|
|
(0.07 |
) |
|
Depreciation |
|
(4.8 |
) |
|
|
1.2 |
|
|
|
(3.6 |
) |
|
|
(0.06 |
) |
|
Interest expense |
|
(4.7 |
) |
|
|
1.2 |
|
|
|
(3.5 |
) |
|
|
(0.06 |
) |
|
Property and other taxes not recoverable within trackers |
|
(1.9 |
) |
|
|
0.5 |
|
|
|
(1.4 |
) |
|
|
(0.02 |
) |
|
Gas repairs safe harbor method change |
|
— |
|
|
|
7.0 |
|
|
|
7.0 |
|
|
|
0.12 |
|
|
Other |
|
1.5 |
|
|
|
0.6 |
|
|
|
2.1 |
|
|
|
0.03 |
|
|
Dilution from higher share count |
|
|
|
|
|
|
|
(0.01 |
) |
||||||
|
Third Quarter, 2024 |
$ |
43.6 |
|
|
$ |
3.2 |
|
|
$ |
46.8 |
|
|
$ |
0.76 |
|
|
Change |
|
|
|
|
$ |
17.5 |
|
|
$ |
0.28 |
|
||||
|
(1) Exclusive of depreciation and depletion shown separately below |
|||||||||||||||
|
(2) Excluding fuel, purchased supply, and direct transmission expense |
|||||||||||||||
|
(3) Income Tax (Expense) Benefit calculation on reconciling items assumes blended federal plus state effective tax rate of 25.3%. |
|||||||||||||||
EXPLANATION OF CONSOLIDATED RESULTS
Three Months Ended September 30, 2024 Compared with the Three Months Ended September 30, 2023
Consolidated gross margin for the three months ended September 30, 2024 was $102.8 million as compared with $83.5 million in 2023, an increase of $19.3 million, or 23.1 percent. This increase was primarily due to new base rates in Montana and South Dakota, electric transmission revenues, electric retail volumes, Montana property tax tracker collections, and lower non-recoverable Montana electric supply costs. These were offset in part by natural gas retail volumes, depreciation, and operating and maintenance costs.
|
|
|
Three Months Ended September 30, |
||||||
|
(in millions) |
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|||||||
|
Reconciliation of gross margin to utility margin: |
|
|
|
|
||||
|
Operating Revenues |
|
$ |
345.2 |
|
$ |
321.1 |
||
|
Less: Fuel, purchased supply and direct transmission expense (exclusive of depreciation and depletion shown separately below) |
|
|
87.9 |
|
|
|
88.9 |
|
|
Less: Operating and maintenance |
|
|
55.9 |
|
|
|
53.2 |
|
|
Less: Property and other taxes |
|
|
41.6 |
|
|
|
43.3 |
|
|
Less: Depreciation and depletion |
|
|
57.0 |
|
|
|
52.2 |
|
|
Gross Margin |
|
|
102.8 |
|
|
|
83.5 |
|
|
Operating and maintenance |
|
|
55.9 |
|
|
|
53.2 |
|
|
Property and other taxes |
|
|
41.6 |
|
|
|
43.3 |
|
|
Depreciation and depletion |
|
|
57.0 |
|
|
|
52.2 |
|
|
Utility Margin(1) |
|
$ |
257.3 |
|
|
$ |
232.2 |
|
|
(1) Non-GAAP financial measure. See “Non-GAAP Financial Measures” below. |
||||||||
|
|
Three Months Ended September 30, |
|||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
Change |
|
% Change |
|||
|
|
(dollars in millions) |
|||||||||||||
|
Utility Margin |
|
|
|
|
|
|
|
|||||||
|
Electric |
$ |
225.7 |
|
$ |
202.0 |
|
$ |
23.7 |
|
11.7 |
% |
|||
|
Natural Gas |
|
31.6 |
|
|
|
30.2 |
|
|
|
1.4 |
|
|
4.6 |
|
|
Total Utility Margin(1) |
$ |
257.3 |
|
|
$ |
232.2 |
|
|
$ |
25.1 |
|
|
10.8 |
% |
|
(1) Non-GAAP financial measure. See “Non-GAAP Financial Measures” below. |
||||||||||||||
Consolidated utility margin for the three months ended September 30, 2024 was $257.3 million as compared with $232.2 million for the same period in 2023, an increase of $25.1 million, or 10.8 percent.
Primary components of the change in utility margin include the following (in millions):
|
|
Utility Margin 2024 vs. 2023 |
||
|
Utility Margin Items Impacting Net Income |
|
||
|
Base rates |
$ |
17.2 |
|
|
Transmission revenue due to market conditions and rates |
|
5.9 |
|
|
Electric retail volumes |
|
3.6 |
|
|
Montana property tax tracker collections |
|
1.5 |
|
|
Montana natural gas transportation |
|
0.9 |
|
|
Non-recoverable Montana electric supply costs |
|
0.6 |
|
|
Natural gas retail volumes |
|
(0.3 |
) |
|
Other |
|
(1.2 |
) |
|
Change in Utility Margin Items Impacting Net Income |
|
28.2 |
|
|
Utility Margin Items Offset Within Net Income |
|
||
|
Property and other taxes recovered in revenue, offset in property and other taxes |
|
(2.0 |
) |
|
Operating expenses recovered in revenue, offset in operating and maintenance expense |
|
(0.9 |
) |
|
Production tax credits, offset in income tax expense |
|
(0.2 |
) |
|
Change in Utility Margin Items Offset Within Net Income |
|
(3.1 |
) |
|
Increase in Consolidated Utility Margin(1) |
$ |
25.1 |
|
|
(1) Non-GAAP financial measure. See “Non-GAAP Financial Measures” below. |
|||
Higher electric retail volumes were driven by favorable weather in Montana impacting residential demand, higher commercial and industrial demand, and customer growth in all jurisdictions, partly offset by unfavorable weather in South Dakota impacting residential demand. Lower natural gas retail volumes were driven by unfavorable weather in Montana partly offset by customer growth in all jurisdictions.
Under the PCCAM, net supply costs higher or lower than the PCCAM base rate (PCCAM Base) (excluding qualifying facility costs) are allocated 90 percent to Montana customers and 10 percent to shareholders. 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). For the three months ended September 30, 2023, we over-collected supply costs of $1.0 million resulting in a reduction to our under collection of costs, and recorded an increase in pre-tax earnings of $0.1 million.
|
|
Three Months Ended September 30, |
|||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
Change |
|
% Change |
|||
|
($ in millions) |
|
|||||||||||||
|
Operating Expenses (excluding fuel, purchased supply and direct transmission expense) |
|
|
|
|
|
|
|
|||||||
|
Operating and maintenance |
$ |
55.9 |
|
$ |
53.2 |
|
$ |
2.7 |
|
|
5.1 |
% |
||
|
Administrative and general |
|
34.9 |
|
|
|
29.4 |
|
|
|
5.5 |
|
|
18.7 |
|
|
Property and other taxes |
|
41.6 |
|
|
|
41.8 |
|
|
|
(0.2 |
) |
|
(0.5 |
) |
|
Depreciation and depletion |
|
57.0 |
|
|
|
52.2 |
|
|
|
4.8 |
|
|
9.2 |
|
|
Total Operating Expenses (excluding fuel, purchased supply and direct transmission expense) |
$ |
189.4 |
|
|
$ |
176.6 |
|
|
$ |
12.8 |
|
|
7.2 |
% |
Consolidated operating expenses, excluding fuel, purchased supply and direct transmission expense, were $189.4 million for the three months ended September 30, 2024, as compared with $176.6 million for the three months ended September 30, 2023. Primary components of the change include the following (in millions):
|
|
Operating Expenses |
||
|
|
2024 vs. 2023 |
||
|
Operating Expenses (excluding fuel, purchased supply and direct transmission expense) Impacting Net Income |
|
||
|
Depreciation expense due to plant additions and higher depreciation rates |
$ |
4.8 |
|
|
Insurance expense, primarily due to increased wildfire risk premiums |
|
3.4 |
|
|
Labor and benefits(1) |
|
3.0 |
|
|
Electric generation maintenance |
|
1.9 |
|
|
Property and other taxes not recoverable within trackers |
|
1.9 |
|
|
Technology implementation and maintenance expenses |
|
(0.1 |
) |
|
Partial recovery from previously impaired alternative energy storage investment |
|
(0.5 |
) |
|
Uncollectible accounts |
|
(1.1 |
) |
|
Other |
|
(1.1 |
) |
|
Change in Items Impacting Net Income |
|
12.2 |
|
|
|
|
||
|
Operating Expenses Offset Within Net Income |
|
||
|
Property and other taxes recovered in trackers, offset in revenue |
|
(2.0 |
) |
|
Operating and maintenance expenses recovered in trackers, offset in revenue |
|
(0.9 |
) |
|
Deferred compensation, offset in other income |
|
2.8 |
|
|
Pension and other postretirement benefits, offset in other income(1) |
|
0.7 |
|
|
Change in Items Offset Within Net Income |
|
0.6 |
|
|
Increase in Operating Expenses (excluding fuel, purchased supply and direct transmission expense) |
$ |
12.8 |
|
|
(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. |
|||
We estimate property taxes throughout each year, and update those estimates based on valuation reports received from the Montana Department of Revenue. Under Montana law, we are allowed to track the increases and decreases in the actual level of state and local taxes and fees and adjust our rates to recover the increase or decrease between rate cases less the amount allocated to Federal Energy Regulatory Commission-jurisdictional customers and net of the associated income tax benefit.
Consolidated operating income for the three months ended September 30, 2024 was $67.9 million as compared with $55.6 million in the same period of 2023. This increase was primarily due to new base rates in Montana and South Dakota, electric transmission revenues, electric retail volumes, Montana property tax tracker collections, and lower non-recoverable Montana electric supply costs. These were offset in part by natural gas retail volumes, depreciation, operating, and administrative and general expenses.
Consolidated interest expense was $33.4 million for the three months ended September 30, 2024 as compared with $28.7 million for the same period of 2023. This increase was due to higher borrowings and interest rates, partly offset by higher capitalization of Allowance for Funds Used During Construction (AFUDC).
Consolidated other income was $9.
Contacts
Investor Relations Contact:
Travis Meyer (605) 978-2967
Media Contact:
Jo Dee Black (866) 622-8081
