NorthWestern (NASDAQ:NWE) detailed a busy 2025 on its year-end results webcast, highlighting merger preparations, regulatory and legislative developments, and updates to its capital plan and 2026 earnings outlook.
2025 results and key drivers
Management reported full-year 2025 GAAP diluted earnings per share (EPS) of $2.94 and non-GAAP diluted EPS of $3.58. CEO Brian Bird said the company is raising its quarterly dividend by 1.5% to $0.67 per share.
For the fourth quarter on an adjusted basis, NorthWestern posted EPS of $1.17, compared with $1.13 in the fourth quarter of 2024. Lail said improved margin reflected new rates and regulatory execution, partially offset by mild weather and market price impacts within the Montana PCCAM mechanism, as well as higher operating costs, depreciation, and interest expense. She also pointed to a one-time charge tied to the Montana rate review outcome related to the Yellowstone County Generating Station and disallowed costs.
2026 guidance and updated capital plan
NorthWestern initiated 2026 earnings guidance of $3.68 to $3.83 per share, which management said represents about 5% growth at the midpoint from 2025 results.
The company also updated its five-year capital plan to $3.21 billion, which management described as a 17% increase from the prior plan. Lail said the increase reflects, among other items, inclusion of a 131-megawatt South Dakota natural gas generation project and incremental Colstrip ownership. Bird said the company recently submitted the South Dakota project (described as a $300 million project) to SPP’s Expedited Resource Adequacy Study and is now including it in the capital plan.
On financing, Lail said the base capital plan remains “self-funded,” consistent with the company’s stated approach of issuing equity only when accretive. However, she said incremental South Dakota generation investment would likely require equity beyond 2026, describing an anticipated 50/50 debt-to-equity approach for that incremental spending. She added that NorthWestern expects to issue debt in 2026 to refinance maturities and fund its existing capital plan.
Lail also said the company ended 2025 with a lower funds from operations (FFO) to debt level, driven by reduced cash flow from mild weather and under-collection of Montana supply costs, which she characterized as around $80 million, expected to reverse in 2026.
Merger with Black Hills: filings and timeline
Bird emphasized the planned all-stock “merger of equals” with Black Hills Corporation, which the company expects to close in the second half of 2026. He said joint merger approval requests were filed in Montana, Nebraska, and South Dakota, along with filings at FERC. He also noted the Form S-4 and joint proxy statement were filed on January 30, with shareholder votes scheduled for April 2.
Management said hearings in the state proceedings are expected in the second quarter of 2026. In the Q&A, the company said South Dakota’s statutory six-month review timeline is prompting work with staff on an extension to the procedural schedule, but management said it had no concerns and described the process as progressing as expected, including in Montana where intervenors have raised issues typical for the jurisdiction.
Large-load and data center discussions
Bird provided updates on large-load and data center activity in Montana and South Dakota, describing progress across letters of intent, development agreements, and the company’s goal to reach executed electric service agreements (ESAs).
- Sabey: The company said it progressed from a letter of intent to a development agreement, though Bird noted Sabey continues to work through land-related issues involving potential sites in Butte and Anaconda. NorthWestern said it hopes to reach an ESA by the end of Q2 2026.
- Atlas Power: Bird said Atlas moved from a letter of intent to a development agreement and has been moving faster. He said NorthWestern expects at least one ESA (among the projects discussed) to be completed by the end of Q2 2026.
- Quantica: Bird said Quantica is making progress and the company hopes for a development agreement “relatively soon.”
On tariffs, Bird said NorthWestern intends to file a Montana large-load tariff in conjunction with a signed ESA, explaining the company wants to demonstrate to regulators that large-load customers pay their fair share and that customers are protected. Management indicated the tariff is ready, but timing is tied to completing an ESA, with an expectation of progress by the end of the second quarter of 2026.
In South Dakota, Bird said there is “significant indication of interest” from data centers and noted the state has infrastructure riders and an established deviated-rate tariff process for large-load customers. He also pointed to pending sales tax reform as an important factor for data centers considering investment in the state.
Colstrip updates and cost recovery items
Bird said the company closed its acquisitions of Avista and Puget interests in Colstrip effective January 1, 2026. He said the Avista interest increased NorthWestern’s ownership from 15% to 30%, and the Puget interest raised ownership to 55%, which management said improves its ability to influence strategy and supports serving large-load customers.
Bird also said the Avista and Puget interests were acquired for $0, but the company must cover associated operating costs. For the Avista portion in Montana, he said NorthWestern filed a temporary PCCAM tariff waiver with the Montana commission in August to support near-term cost recovery expected to largely offset about $18 million in incremental annual operating costs; the waiver was temporarily granted in January 2026. For the Puget portion, Bird said NorthWestern signed a contract in October 2025 to sell the electricity through late 2027, with revenue expected to largely offset approximately $30 million in incremental annual operating costs. He added the company filed with FERC in October 2025 for cost-based rates and expects approval in the first quarter of 2026.
About NorthWestern (NASDAQ:NWE)
NorthWestern Corporation (NASDAQ: NWE) is a regulated energy company that delivers electricity and natural gas to residential, commercial and industrial customers. Through its Electric Operations and Gas Operations segments, the company operates an extensive network of distribution lines, substations and pipelines. NorthWestern’s services encompass the delivery of power sourced from regional transmission systems and the procurement, storage and distribution of natural gas to end users.
Electric delivery services include the management of distribution infrastructure, customer metering and system reliability programs.
