NorthWestern 8K During the course of this presentation, there will be forward-looking | NWE 1 Sep 10

Midwest Investor Update

September 1 - 2, 2010

forward-looking statement…

During the course of this presentation, there will be forward-looking

statements within the meaning of the “safe harbor” provisions of the

Private Securities Litigation Reform Act of 1995. Forward-looking

statements often address our expected future business and financial
performance, and often contain words such as “expects,” “anticipates,”

“intends,” “plans,” “believes,” “seeks,” or “will.”

The information in this presentation is based upon our current

expectations as of the date hereof unless otherwise noted. Our actual

future business and financial performance may differ materially and

adversely from our expectations expressed in any forward-looking

statements. We undertake no obligation to revise or publicly update our
forward-looking statements or this presentation for any reason. Although

our expectations and beliefs are based on reasonable assumptions, actual

results may differ materially. The factors that may affect our results are

listed in certain of our press releases and disclosed in the Company’s

public filings with the SEC.

who we are…

Above data as of 6/30/10

(1) Book capitalization calculated as total debt, excluding capital leases, plus shareholders’ equity.

¾ 661,000 customers

» 397,000 electric

» 264,000 natural gas

¾ Approximately 123,000 square
miles of service territory in
Montana, South Dakota, and
Nebraska

» 32,000 miles of electric T&D lines

» 8,400 miles of natural gas T&D
pipelines

» 18 Bcf natural gas storage

¾ Total generation (mostly base load coal)

» MT - 222 MW - regulated

» SD - 312 MW - regulated

¾ Total Assets: $2,832 MM

¾ Total Capitalization: $1,812 MM(1)

¾ Total Employees: 1,354

Located in states with relatively stable
economies with potential grid expansion.

NorthWestern’s attributes…

¾ Solid operations

» Cost competitive

» Above-average reliability

» Award-winning customer service

¾ Low single A secured credit ratings with a strong balance sheet and liquidity

» April 15, 2010 Fitch upgraded secured and unsecured ratings to A- and BBB+

respectively

¾ Positive earnings and ROE trend

» Delivery services rate cases for Montana electric and natural gas

» Mill Creek Generation Station into rates early 2011

¾ Strong cash flows

» NOLs and repair tax deduction provide an effective tax shield until likely 2014

» 94% pension funded status allows us to shift operating cash flows toward growth

¾ Competitive total shareholder return and dividend that has increased every

year since 2005

» Added to S&P 600 SmallCap Index on April 9, 2010

¾ Constructive regulatory environment

¾ Forbes.com listed as one of “100 Most Trustworthy Companies”

¾ Realistic investment opportunities

improving credit ratings…

A security rating is not a recommendation to buy, sell or hold securities. Such rating may be subject to
revision or withdrawal at any time by the credit rating agency and each rating should be evaluated
independently of any other rating.

strong balance sheet and liquidity…

¾ Total Debt / Total capitalization of 55.4%(1)

¾ May 2010

» We refinanced existing $225 million, 5.875% Senior Secured Notes
due 2014 with 15 year First Mortgage Bonds due 2025. Bonds
priced April 15th at 5.01%.

¾ Total liquidity approximately $180 million

¾ Nearly all long-term debt matures after 2015

(1) Total Debt / Total capitalization as of 6/30/10

(2) Excludes outstanding Revolver balance of $86 million maturing in 2012.

positive earnings and ROE…

Recent authorized ROE’s: Mill Creek (10.25%)
and Colstrip Unit 4 (10.00%).

* 2010 Estimate for illustrative purposes only and based on guidance range $1.95 - $2.10 and 36.5 million fully diluted shares

strong cash flows…

Earnings trend and NOLs provide strong cash flows to
fund future investment.

(1) Utility maintenance capex only, excludes investment project opportunities.

(2) 2009 Cash Flow from Operations adjusted to add back pension funding in excess of expense and Ammondson settlement paid.

It is also anticipated that our $93 million investment to
fund pension in 2009 will free up significant cash flow
for future investment.

12/31/09 pension funded status…

Data source: SNL
Financial

competitive total shareholder return…

Data source: SNL
Financial

and growing dividend…

Goal for dividend payout ratio of 60% - 70%.
Current dividend yield about 5%.

(1) 2010 estimated payout range assumes midpoint of $1.95 - $2.10
guidance range

constructive regulatory environment…

¾ Montana

» Rate cases filed October 2009 requesting $17.5 million revenue
increase

♦ July 2010 revised rate request to $15.1 million reflecting lower updated costs

♦ July 2010 interim rate relief of $13.8 million granted, subject to refund

♦ Hearing schedule for September 20th, with decision anticipated in
December 2010

» Mill Creek Generation Station filed with MPSC

♦ Under construction with $147.2 million capitalized CWIP as of June 30, 2010

♦ Intend to file Interim rates soon to be effective with plant in-service

» Colstrip Unit 4 placed into rate base starting January 2009

¾ South Dakota / Nebraska

» Expect to file natural gas rate cases during 2011

Maintaining positive regulatory relations in all
jurisdictions

constructive regulatory environment…

¾ FERC

» Working with FERC for MSTI rate design

♦ FERC encouraged Company to develop MSTI on a cost of service
basis by requesting appropriate tariff waivers for existing OATT

» FERC approved 230kV Renewable Collector Open Season

» Initial Open Season informational meetings for both MSTI and
230kV Renewable Collector system were held March 25, 2010

» FERC docket filed for Mill Creek on April 10, 2010 to establish
rates as of January 1, 2011

Maintaining positive regulatory relations in all
jurisdictions

near-term potential earnings drivers…

¾ In 2010 we anticipate

» Mill Creek AFUDC

♦ Approximately $9 million full year pre-tax contribution

» Modest recovery in volumes and economic activity in
2010

♦ High ratio of residential/commercial vs. industrial
customers

● Electric: 69% Residential & Commercial, 31% Industrial

● Natural Gas: 99% Residential & Commercial, 1% Industrial

♦ Relatively healthy economy within our service territory

» Montana rate adjustment expected to take effect last
quarter of 2010

¾ 2011 we anticipate:

» Full year effect of Montana rate adjustment

» Mill Creek in rate base

♦ Approximately $10 million annualized contribution to net income, or $3.7

million incremental post-tax contribution compared to 2010

» Potential South Dakota and Nebraska natural gas partial year rate

adjustments

longer term investment opportunities…

¾ Distribution system enhancements

» Incremental rate based investment to enhance
reliability and capacity, improve rural service, and
prepare the system for potential smart grid
applications (early stages)

¾ Energy supply

» Mill Creek Generation Station

» South Dakota peaking generation

» Wind projects and other renewable projects (early stages)

» Big Stone pollution control equipment (early stages)

» Natural gas reserves (early stages)

¾ Transmission projects

» Colstrip 500 kV upgrade

» 230 kV Renewable Collector System

» Mountain States Transmission Intertie (MSTI)

» Electric Transmission America (ETA) (early stages)

» Green Power Express (ITC) (early stages)

potential project summary…

Opportunity to increase and diversify earnings as
compared with our existing $1.6 billion rate base.

in summary…

¾ Solid operations

¾ Low single A secured credit ratings with a
strong balance sheet and liquidity

¾ Positive earnings and ROE trend

¾ Strong cash flows

¾ Competitive total shareholder return and
dividend that has increased every year
since 2005

¾ Constructive regulatory environment

¾ Forbes.com “100 Most Trustworthy
Companies”

¾ Realistic investment opportunities

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income statement…

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balance sheet…

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cash flow…

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2009 - 2010 earnings bridge…

Appendi
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reaffirming 2010 EPS
guidance…

¾ The major assumptions include, but are not limited to, the
following expectations:

» No impact from requested rate increase in Montana (including interim rates) due to
anticipated final order in the rate case during the fourth quarter of 2010;

» The release of the valuation allowance against certain state NOL carryforwards in not
included in the earnings outlook;

» The tax benefit associated with the IRS approval of a tax accounting method to deduct
repairs in included in the earnings outlook;

» Fully diluted average shares outstanding of 36.5 million; and

» Normal weather in the Company’s electric and natural gas service territories for the
remainder of 2010

Appendi
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NorthWestern (NWE) 8-KDuring the course of this presentation, there will be forward-looking