NWE - Earnings call transcript Q4 2020 | NorthWestern Corporation

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Travis Meyer

Good afternoon, and thank you for joining NorthWestern Corporation's financial results webcast for the year ending December 31, 2020. My name is Travis Meyer. I'm the Director of Corporate Finance and Investor Relations for NorthWestern Energy.

Joining us on the call today to walk you through the results are Bob Rowe, President and Chief Executive Officer; and Brian Bird, Chief Financial Officer.

As most of you are aware, on Tuesday, this week announced several key leadership changes.

incoming Accounting Lail, the Officer have President the fun also Chief and for we CFO, currently Crystal Vice today. So NorthWestern, joining and role been played it into is has with for organization XX Crystal NorthWestern the great a shaping in years huge today. the company over has but those no is bust doubt Brian fill, the out loafers. who us toes big some of handing of she'll know to out shoes those Crystal have

her NorthWestern's not normal Just turn the to been our clear, our northwesternenergy.com. on [Operator to With shoe released, website available that testament Instructions]. talent, be size. a over was abnormal to results and very that, I'll at is the release formalities. have

this questions released responses premarket We our presentation, contain note may this by XX-K that presenters statements. to Please and press your also morning. comments forward-looking release, this company's

Rowe. being recorded. be at for As can within the will over the includes provisions of definitions Presentations contained reconciliations Relations, will With p.m. this also in I'll to today's our safe included The non-GAAP and link. the on note, webcast SEC of this that, the beginning such, Bob northwesternenergy.com and disclosures our to harbor year direct This Please hand see be the slide financial measures. presentation Our replay Eastern today materials. on second website Company, Investor webcast Please included X:XX found NorthWestern X and at I available the archived under is disclosures, you presentation. non-GAAP and the filings presentation CEO, Webcast

Robert Rowe

multi-day lot Dakota Montana, and period, have well but are, February. Wherever you thank is where the a for well in I it's cold X, South very us. or you Thank everyone, it Well, below pretty hope into a it's than Travis. locked you temperatures we're been warmer much, joining

fact, he want working So Brian gave index. Crystal. co-morbidity and in by the factoid, have together and both been I what this I you thanking start executive expect? Brian -- do to do congratulating and me

at If his the of you to up XX years. add tenure CFO are industry X. is for my The and CEO closer tenure, a total we and average

So over resetting and be I and Crystal the will starting clock.

know, you an great its we tremendous of leader into Brian important Crystal, a is and think and succession healthy Several do know would you the is will of these company. already a good both she position. As had, as job. do we some previously as does that long new company a it's about as and Brian others a moving looks our I planning haven't changes an infrastructure. to as indication people, that just as to out well term of position

XXXX. almost less about let income Diluted With comment, is So Executive enthusiastic team XX% to putting XXXX. very them pair EPS in when Travis' same the you XXXX change you, a Net highlights. to or think that the this million XX% following Crystal, was to is the up turn really the before on $X.XX, advice hands them or $X.XX them Board you compared my Brian Keds, me of about. wash It's worse $XXX.X handle entire million. as and and on. that's period that is was delicately and than even that, $XX for

in capital record front having March very, is of Directors the very ever. while lower And the the of on about very our of challenges X.X% in which XX. per dividend shareholders $X.XX talked had best and that on We've a On other that safety adjusted it $X.XX, despite than that despite all system I'm We've of payable March of guidance we ways quarterly doing within as investing to COVID, to of in increase course, share, at hand, while the X% $X.XX doing the a proud is XXst thrown very ever. it which XXXX. range $X.XX non-GAAP different year or Board capital our The was working this $X.XX, and EPS the is quarter. and year, was had a were us healthy. terms record plans, back safely in keeping busiest successful every last employees our year declared

translates Specifically, to only rate people time in into our XXXX. X.XX it more work, XXXX but doing obviously, from recordable home fundamentally, to X.XX in every translates X.XX our in day. into incident XXXX. rate in safely 'XX people from lost was down went X.XX And And that more going more

doing we customers saw And the of terms were to appreciated. the that. our a doing employees talking was in for recognized That of the in -- year So solicitation about like community, customer in was and competitive very the what really been seems We've time. very community. satisfaction we're process saw what Montana company had a great our long proud -- in it

analysis, million administrators' detail. among capacity selected during announce about to the years, Commission. in we X be we and projects back Public be in one we selection first receive much those And assuming and of the in multiple generation coming of more Montana do investment approval some We'll We from at quarter. anticipate Montana talking do Service in owned excess that over of our $XXX the the are next these the will projects expect independent resulting least reviewing of

to for off your Now victory lap. Brian, you

Brian Bird

Thanks, income a in Bob But the GAAP that, Bob. year outcomes approximately basis, about my down I financial lap. down on net million with COVID and talked wasn't wish a $XX.X XXXX, was it XX%. victory for or

think the did the negative of gross margins you variance or X, see approximately that you to Page top we down million line. gross nice of $XX X%. below managing And about margin when terms look at Up can job million the P&L, in expenses. in all You on $XX a

and XXXX. increased lower expenses matter a and the entirely are a expense were operating benefit much with combined AFUDC interest in line in As other that, down, pretty favorable fact, of tax income offset by

bottom difficult So for That that gross certainly I gas really page, to break consistent, And that. mentioned, X%, we impacted overcome to X, that course, was Page X, by down you then had and do and and if year. offset described of impacted as on gas. partly were -- And it customer electric I speak will. pretty say to down Electric X million, $XX to margin we both by was into the COVID down unfavorable a margin of really it lot I'd we buckets, gross growth. weather. secondly, And about a to as Those were X%.

also We outcome. a had poor

that's Our $X disallowance approximately million. our PCCAM, on

I together the a I X X a we love $XX it approximately We prior as gain talked decent of million XXXX, than was XXXX, We lower Below dealing supply did had the first things. debt with year. in were cost a about The have that, -- ban. a primarily recovery -- but QF result we the had did in have total. really in

some but So on a on X a have did basis, previous favorable approximately had as down item. X The you trackers. top heating together year. million this a was it primarily year-over-year in this approximately year. dealing think from things when of look Those in I And was that's impact $X.X And and closed-out degree being $X at XXXX margin $X lower the part did total items of all in Dakota, South gross on as $XX.X unfavorable And million we Weather of that gross I And pretax again, are get in decrease was terms know those a million. But to These 'XX is some on at in million of and We when those day, $XX.X get page, estimate primarily degree average other you a the 'XX. of in that weather for a unfavorable elsewhere detriment are it did than in net quite days, warmer We big gross with overall compared basis, million. swing. net of bit and margin items back, $XX.X in combined $X other margin year-over-year than primarily normal. things had that for negative XXXX. to smaller out, business. a calls, in Page as million last all a the the from warmer driver. compared X X a guess, that historic then help then detriment mentioned units certainly resulted And we big revenues normal and a we We offset we've our here. P&L lastly, a cooling was year you transmission million. instance, for

saw quarter as we quarter It's orange a will. that. for so lastly, XXXX, a will, the like color, the much, blue. much on page. In lot fourth for see if bang third and in of you if red Unfortunately, in didn't we the warmer. lot we buck, of much this our And quarter, or to first And you

you're you see to -- I February. January, give of in see a and hint to you're a blue Just orange, in bit little for quite think, to going going of a quite bit XXXX, bit of a

been February call. Bob very, earlier as cold, very has so out far, the So, pointed on

on did that in or expenses operating a expenses, and a revised biggest guidance in or and about and X.X%, down Moving company, taxes X, sure our see down this depletion. Operating was did this we X% Page forward, about $X.X still a nice million terms in our Whatever million and of to job. margin, calls. and managing reduction would shortfall be OG&A we -- did we The expenses saw depreciation property earlier $XX hit on we in in we were increase down a talked over X%. saw driver make

taxes, $X labor costs we the lower of great job lower capital. but of during the our of to OG&A, that. good did and item. COVID $XX.X were will, the Dakota impact not the We change we we million you talked increased $X biggest on South as did think did Even Again, a OG&A the as biggest the had you'd about and year. a though increase COVID year changes employee a was taxes in property you get to labor benefits, in elsewhere particular $XX.X depreciation. Hazard some from 'XX in P&L. tree capital during about, property expect certainly Bob OG&A for costs million us just again, things from Think accounts. biggest Those Had in company advantage and other Montana down was million. of the items such see XXXX. are area in OG&A relief, portion we as that investment a increases plant in then but certainly after One valuations travel We Obviously, Commission, that dollars the net that offset totaled less more in And cost million there for, allocating in property well. On know, are Commission, of income. driver decrease the $X.X that we less where those Net-net, standpoint, just well. removal, getting that the cost is had impact see for really if and incentive Mentioned certainly a from driver that million. uncollectible on XXXX. did a took net medical, additions

Slide forward Moving X. to

prior lower And that tax pretax a down from XX%. the we out Just to operating we great income, a nearly higher as a And and or Other borrowings. benefit down million I'll build-out that call, year, and That degree. driving XX%. about think perspective that, of really $XX.X speak $XX million, a net-net, being to to $XX.X higher up expense, Interest higher minute. in seeing in net about -- again, pointed income then Dakota million. in from earlier nets you're income South had the AFUDC, down from and from generation than slightly the up below

you in was biggest driven of net was XXXX, an moving we increase see work, $XX.X halfway the income the to see X benefit, in resulting on million really release lower higher reduction partially I'd That That state million so million Slide you of and repairs. up driver the benefit $X.X lower million. benefit you year's $X.X the the had offset items. lower Think capital a qualified with And $XX move income $X.X in then in million So federal million. unrecognized bottom in tax the That the by income on taxes tax just was you increased the XXXX can of for taxes, up there; pretax $X page, -- page, $XX.X XXXX, helped of there that million. to about to as page, benefit benefit argue last X. of tax of million. of a offset big $X.X income capital in reduction again, see also was the At taxes benefit compared

balance sheet. to on the Moving

we'll I think in capitalization the bottom In did and we of really XXXX XXXX, forward. of debt. really, in up talk within of had our on as page. about that up XX% definitely delay, from to on the and range equity I'd the that debt-to-cap we XX% still moving result really focus XX.X%, kind but And at that say, did targeted needs long-term XX%. XXXX, all up a our of to short-term I We're go delay certainly

Moving from $XX refunds. due you collections million. then the also in operations Page better cash That's on recall, on XX. to to And XXXX, flow flow we primarily statement about TCJA are had this up may supply Cash year.

X net that's cash Bob resulting year Those investing had interconnection was in in and a We about activities big from operating income from about increase, a some earlier, big if about the million. you $XXX we will, net million. that generation activities. That refunds. by reduced in $XX reduction also talked cash improvement, talked changes, over

You when million can level higher bottom approximately and $XX higher to generation see in financing of by even speak the cash certainly, then it driver activity, increase debt page, we this there. investment. there was And expect we 'XX. just And investment higher to that higher a at be and hopefully the of at provided a

And into that we just Moving out, taxpayer to to and that slide as but to elsewhere, increase PTCs want we until hover on point XX%. to in time, in NOLs, want NOLs credits expect effective up on to out, just We tax say ETR forward taxes. because on do have, rate other that pretax around X.X XX. we don't had we are X.X carry time expect to expect -- point until we minus over I that range and over of XXXX, somewhere to we a the XXXX I using ETR then either income. a we'll up Page those X%, of here and we be to And XXXX. tax to gradually on get expect XX% also to kind cash

on XX. adjusted on earnings forward Moving non-GAAP Slide

were results, favorable removed point we PCCAM we out non-GAAP-ed you should if this were add did unrecognized added I all, We back -- of the First the disallowance. unfavorable that out, In benefit. add back will. what weather the things removed 'XX's we year. and We tax actually did weather,

GAAP a of result diluted XXXX, $X.XX a $X.XX $X.XX by items $X.XX. the that, X% $X.XX. between for I or $X.XX. on And those non-GAAP. As to increased EPS That's in and again year-over-year to difference our $X.XX mentioned, $X.XX XXXX to The we compared that of $X.XX, down adjusting down basis,

on million that itself, kind how at at it page, items of look COVID. at the margin basis, of a non-GAAP top the being gross we half you those P&L about compare the down $XX If of non-GAAP really think you through I look and

just did we travel But a fourth accounts, you in customers for the continued year see say, that gross And uncollectible to just expenses again, would the on difference, were of like to third as calculate X% you net-net, we to fourth seem and with a But margin that to a basis, we couldn't the just kind and total well. in But on expense I'll quarter. million would saw an detriment is got perspective, you $X OG&A bit that enough focus the we're got $X an I we as did interest recovery were or an did time loss detriment the still for depreciation. perspective. from would out, actually next on a had from a uncollectible a of was, in a did that basis. But and, the move the million the others. rules million reduction we if itself, in or think $X operating property accounting I'd tax, to I impact and rather $XX you to Total do But about the And million that other though, have all that -- -- OG&A number $X.XX we a see side, we've better to increasing again, we that Page collect X basis certainly even minimal XX, we associated winter commercial on COVID. saw the increase quarter, after to if in a We before a have little was loss out lag $X.X GAAP it entered $X.XX tax detriment pointed from reduction cover see, like load what industrial falling good on down from for flat net-net, but we taxes Those million but offset X.X. quite of of or, we an $X and we But margin income than again, in to if period seen perspective, XX.X, and year-over-year. of reduced really million still Back we they basis. again, a volumetric benefit, argue, quarter. bit in the gross to flattened page, will, an XX, We similar margin. decent seeing grant to us. a quarter a about, year-over-year uncollectible in able taxes second for forecasting and seems we into look X, also manage you. accounts effective, saw residential in a we a in accounts. to terms do, and COVID job will, to could order, really as You in increase different full really fourth detriment short on backdrop, a that of to and that back Slide non-GAAP when of gross right bit. terms with labor

saying accounting being instead be get an million have order $X.XX. the Commission, say, up have I of about we that. revised all if top think we Bob is the along, we our half, able been would would $X.XX. referenced guidance to of didn't been thing this if approximately we the in And guidance, $X achieve our half from earnings bottom That I'd and Montana at been it have front. Last

had I concerns a and impact but you consider our chain, operated company think with our to the when really deliver increased it it lot even XXXX of spend supply off could COVID and pull spend. level lot year, impact us going well. this confidence of mentioned a capital biggest about capital into safety, how Bob we the that capital of spend, extremely gives an

at company feel time. I the So the operations about point in this good of

Moving with The that's wide XXXX range $X.XX. up EPS I'd on a acknowledge XXXX starting the to high that, range. low to to XX. to $X.XX We pretty bridge, non-GAAP $X.XX. to the it

had I really is think X/X. some different And leap first, into to put like gross we'd to I tighten buckets. in itself, margin to $X.XX point big want are that, follow the COVID One $X.XX, being are thing in up, I'd in should we but a And going picked organic about that XXXX. that you first there's growth out kind of have X/X, there that X/X. X/X, bridge X on things argue how And there, of

I a recovery. think partial be second third COVID would

well. industrial, back argue, as and transmission think would commercial, some get I I

X/X the During is tracker. the And last year.

our we in that if would bottom do in other portion to -- going if X/X, the think XXXX there's trackers. a assumptions those recovery tax that we're are of the along taxes property going at 'XX, you our don't be also expect going tax and know, of will, you was be up, and to XXXX those have with guidance from on that guys go part property you And drag, margin. in will, of of property a I the increases page. get -- property last that into increases As We

going know course, normal to expect the year. these Of the with the to COVID We normalized well, see quarter do second in of weather. is look be through us you more expect second and half

for tax X.X second. focus income X.X; mentioned to that on XX.X. as We to shares have then I XX.X minus I a a and average to earlier, last consolidated diluted want ranging rate, positive one

in just with the I will X- say generation coming equity planning we're price. XXXX, as I I'd in we our well. and program. capital Anything snowplowed in XXXX, to X-year a know and our on I $XXX equity ATM and raise I'd think and where in from sit the million folks $XXX seen share issue issuing and have we look. is in a point for want the concerns that equity Montana going course, light in with the and as XXXX. expect not at that That time. see Last X-year of of to win either up fact, where count slide debt -- also equity, remind this to to a our is the been it maybe But pre-approval, Obviously, announcing to today range, well, enough we was, with about there of Bob had our this there's be agencies some a here we not and did in million of numbers, thing reiterate, investment that rebound equity our fortunate on year issuing if, is from going $XXX some need and price associated an equity period. rating needs discussions do some, 'XX needs. our some after or built into to RFP in in We make we're million that we're over our not

that, go last my XX. to slide, with I'll Slide So

point this of versus the our even had X.X%. a midpoint our -- with XXXX non-GAAP EPS page. is guidance non-GAAP in Even year-end earnings. 'XX, the a XXXX, diluted GAAP with that obviously, increase. rate and period of X.X% over have time growth reduction also We top that, I'd the out at And was the average

on with the said this base, XX% rate. at itself, to I a say I'd regarding the tell a with payout, seeing, the dividend that a we expect in you a that's sure earnings quite you one we we if investment see line make of page. increase I currently through box it's EPS a But of saw that long that will, growth X% is the red our level -- I huge reason the in line, X% in this than growth past we will, range you to in guess continue our going-forward in basis. but bit increase that, over some think basis a also We to or and dividend I'll do reasons rate see full you say XX% X% to make a recovery period. grant that's and is of up a if Last page to grow still spend say So it well, to And want I'd say that we've strong at saw I'd of X.X% expect if a that investments. would you of X% to lead as Montana the maintain Bob. recovery for you we're thing a see And rate this again, the dividend less to preapproval, average the dividend, thing that, me hand a the we be we've year RFP, so -- -- in the bottom that's getting back end, again, seen of to that certain those increase. $X.XX an we time that lower also company. the the kind over on projected one grow as to over upon the the capital we X.X% we'd want that, expect higher why we within we're And $X.XX. the in I'd seen about success going-forward a get on you the as in I'd you've is that expect have that I with dividend high this on expectation And growth to it's growth fortunate that ourselves term. in middle would to as before, going expect average rates, to will stay earnings range. we're to of that than that dividend

Robert Rowe

mic been picture, great dropping I'm looking Brian, these I so, Brian, very CFO the and to with last years it's as you or with there. COO. as right working much XX.X you working over forward

that towards show more role, most new a and find pickup Crystal, how appropriate taking his as that sports much he's is those CFOs seriously driving is to Just get large Brian to German she you his will is drive. you now know inclined truck towards exotic And position. cars out to she pickup new you jeeps classic trucks than

do with really were work been good quarter, the of but think ahead other among of for case speaking and capital the terms has are forward about of Executive myself, that some planned to is combination for ability our And to quite We last we this talked opportunities bonds, we in much we told on for years enthusiastic, cash in our projects us. our to significant call capital than customers is in capital all mentioned, time. expenditures, in outcomes, team plan total last South The equity we expect Board, depict how I optimistic through finance Dakota. and from internal a work X-year, that our things, that a the $X.X I issuances reflected, as the generation change, more billion. generation as that for operations, amount would of important I And obviously, XXXX have say whole Brian about think the we looking year. regulatory the I this mortgage that Brian and to said, Financing, you subject ATM cash other factors. forecast first program. does include depending X in

commission have the along our the really there, talked all our Aberdeen on, very about efficiently. we've aspects of but we making forecast from with really And filing were even at business. is move consulting here to able underway project As here to across and plan further spread a we the investments to capital

the Just as This years. of an Montana. team have to plan going over We That's of had do in asset investment be substantial on we're in AMI optimize to or forward next not system that example, in the we week, a ongoing Montana. commenced for incremental to Montana investments great -- we successfully X-year Dakota. generation system continue does X.X the hydro moving opportunity looking our include the and the ahead that so operation great South kickoff RFP. in again, And out The we a come of that. operational as AMI might

other not capacity that and in Montana. included process we of then generation we an be hours, duration, that intermediate a selected, And would available period, a will at to behalf just press long from RFP, of statutory I've And again, including plan. XX facility, our the over as competitive and megawatts. year megawatts. own on solicitation an should for turbine generating bids expect of we've generator cost-effective described, improvements. additional in wide approval of Montana upgrades were X- the excess going -- $XXX COVID, those XXX generation undertake continued is the did to that additional million. minute that for And hydro to into February, projects XX the on the in result least last do short among rewind through tiers, variety facilities Again, and one upgrades solicitation of excess we rewinds, So in that's was a X assuming investment the receive a pivoted on X Montana in up in Commission XXX do preapproval That be

advantages be And we good So I spring, around lot say. that that efficient lower during and in challenges enter before And this be of Market moving There it spring. quite forward move we on will work experience was talked training that recruiting benefits expect a Dakota. seeing impressive to confident this we'll Energy a COVID, but certainly that into operation the we're of out the We've during able do of very -- as South year to had customer terms and was costs. well. project ahead intend Imbalance about that to COVID year able should real SPP Western were go we into in and there

Now not EIM, the this full -- a is not obviously, is market.

so-called So we units. well XX-megawatt benefits there. in real just of more the magnitude, -- benefits do are a the have detail, seeing South looking Dakota, to see are to don't little project but expect and we're underway that forward we rice Heron, we on those In

that, are included expect identified reflected budget XX underway be million to or Other Dakota addition That additional to XXXX, update. that's approximately in flexible items, XX generation million. is, of I bit these the to and that's in an a Aberdeen. a South And are to of in again, rest online an capital budget. about smooth to been XXXX in and XXXX. late We very That's in $XX regulatory the the investments going be provide forward. in ahead that megawatts those and at capital we're online project, shared. well Expect and in million, $XX Again, $XX that planning

As XXXX. did mechanism, in ask decoupling customer of asymmetric the between patterns of seeing did fixed classes, we the recall, that approve July Because COVID the we a.k.a of and commission originally recovery a be Montana delay year, to and agreed. commission were July you this until to effective the cost Commission

next choice online of take did -- between costs then a did potential the of case, recovered recovery to in meetings, filed we case, new customers in to consolidating it. our a call existing upon of for of certainly $XX Notable test revenues So X prices we of key on previous of internal on particular forward it. is to settlement that. most looking all executed period, our a year, case active extremely gas forward. is not to deferred going past contributing doing with we million be about We federal order. been And have conducted FERC we've on with we're letters Montana time, expect and million refunds discussed The landing power and are million or that address Montana, voted that series of category, And power a COVID. the harmonization tracker there. of recovered adjusting did agreement -- it, worked real transmission and purchased same then reach better and level, We January. had the a FERC refunded this to to, At receipt that. particularly out October, and ESG will half initiatives, our agree all prior tell to did And a settlement because heads natural commission got modified through And credit And the filing in they lot on great a thanks unfortunately, year. see file ESG as PSC ESG. Montana our And then about December, we a page, we're with retail committee, that each of have the a We've the for taxes of that in work associated rate end this new of of we submit which concerned straightforward we very actually, in as all commissions information. rate who in have working Montana that $XX disclosures to of practices. of ESG refunds the calls, for everyone our 'XX, statistics. there ESG also and much wholesale property at review of and and final in disallow summer. In easy some in order the which effect We these. with on with about data and new issued this We've were be also expect some a and been and in costs the purchased cases, in gap we commission was disclose cases, moving in November. cumulative will successfully, up period. purchased wrapping we we've also we submit call finally, of new, rates request power, operational compliance sustainability forward will year, of the FCRM best and that are statistics included reference a trend in it we Montana. associated includes do relatively a that implications financial the $X.X report Often, of X-year we -- we've think among in Brian That filings. existing story to the have policies the But the are January everyone to over around to course, standards

So you're right the do page encourage link you to page the now. to web the go at looking -- bottom to the at of

about by South underway and and Dakota. transition XXXX. well. starting trucks Montana the So in here, in in heavy-duty do our A to make XX% fleet progress, be be investment XXXX. own good see we electric good continue of to A... to and an other in a from And to targeting rating substantial light-duty couple committed the in as MSCI notably, with really most got the XX% vehicle we've you'll along BB medium Initially, notable of we're hopeful We've of very electrified thoughtful projects things bucket also and improvement in charging, system-wide we'll

an with satisfaction laid foundation, So safety, in your the we'll despite again, operational, good great summary, year XXXX. year questions. we a take in in for and the that, particularly customer from challenges believe, 'XX a perspective And

Travis Meyer

Levi. take Thank our Bob. you, first We'll Instructions]. from [Operator question Andrew

Andrew Levi

couple I things. a So have of

XX. weekend, X have I long Friday to say, just Firstly, and it's a it's and

So you -- management. Electric if remind me joke a of that's portfolio guys between Hawaiian

Robert Rowe

don't off, get on We Monday shame us.

Andrew Levi

things like you Board maybe and all But stuff. at. know meeting want it's to that your rethink But around Okay. I

So my complaint. anyway, that's

schemes. had the As do far -- I anyway guess, about I to nothing

of been just I've a about. far as So as thinking you guys things couple concerned, are

your just on a COVID? COVID into you call if but -- want 'XX high level, at of I Just of kind don't much and have guidance, negative guidance effects I a first, as kind very looking dip, of put how a know to your

Robert Rowe

that Ongoing you're COVID, Brian, for ready yes. one?

Brian Bird

receive the is thoughts Yes. Andy, this, first year I of our COVID to off for to the linger X first would the half really quarters. of say we expect backed just through kind

quarter, lightest -- quarter The second big for first is our quarter certainly typically. a

expect So better much -- summertime, we going spot. are do be by and in a the things to

So our that's expectations.

Andrew Levi

No, I but I'm how like of much guess that, financially. a... just understand I saying

Brian Bird

looking that's at how we're That's looking Financially, at expenses. margin. how we're

Andrew Levi

be adding environment, out But from is million? what like more you to let's normalized like I'm back? trying $XX were XX say, if just we a it figure now, months in would

Brian Bird

of COVID's COVID. us of how top year. for here if helpful, will, and give some should will, our if certainly, on detail, two for there's unwinding, bit out think think would about we Maybe how about that's you for expectation, And the one this I how is year if you -- obviously, first that terms the through see of of And organic this it half of we're quarters impacted things an to That's impact then of four in be P&L. that, if it. thing a not growth Andy, did quite going start

Andrew Levi

IRP with. where comfortable you very process, the talk Okay. And on then you $XXX-plus that feel about potentially million

is more is Can this I of part point that you the like about just and the CapEx? that than that part. at So stated kind talk for there if get unknown possibility

Robert Rowe

exposure didn't threshold. market. XX% -- regional in down market, this now part $XXX to current to of in million in that right is that actively the But What take a That finalizing customers' in of as and we take that, customers our will us the I project we're say as RFP, over the our we would forward involved deck. include are will the are it the exposed you have but commission, part over takes we'll comfortable we what Montana to that recall, a we're

there that be So RFP. we expect a will subsequent

how little about this stuff. This made timing, isn't We say just a is a about the decisions but just debate. real haven't bit today. I'll operating And policy is system

the and of as don't job coordinating but time storage a also generation. fantastic is market, electric transmission as nearly but folks risk. doing Montana, we want are in this transmission we well risk, winter, another as are gas to it and are. a happen it's happen And a one and in any own pretty with on we Fortunately, much much we And and the It's be price something the August. supply can on that market as can even our

going going pleased expect to but subsequent market now, not very to right with RFP to out a do continue take to really just the to several moving be to soon our want we're be with relatively customers' So we're in. you next years a exposure RFP do the down ahead we over be that

Andrew Levi

Okay. I understand.

or continued RFP, read two I there but it there where this a had talking -- was whatever be had still to about that RFPs future projects, the relative way to a upside. So really unknown could you're through it but like were it's project the whether be RFP, you lease may

I that. get So

Robert Rowe

-- there has Yes, be but be to again, current, important, is we very the there's believe too. going future well the upside to in RFP

Andrew Levi

service way whether understand. whether then, a territory guess, that if solar/storage you as say this RFPs, know sense what RFP as I I And or like makes to guys want I and some the as are to an get future opportunity far within I don't as shortfall? your thinking of

Robert Rowe

resources last the things a really And filing resources Montana planner of I Commission but into is XX Yes. ELCC, was RFP -- was rule. that kinds how has was in behave contributions hour, it structured and And fact, their XX They resources in as and bit system, of different you a on that of the to could read participate, load-carrying of robust capacity, hour with deeper discussion of different has the occurred. and A there's so a place, X one a great that things one hour, it's if made of December. these best supply kinds dig reasons effective the want our year. or actually, have little our

about we right XX% carbon-free. pushing got is we're place it to that our you've megawatts wind the of a So XXX Montana we're what is. And there not about got practical unfortunately, negligible. are when we've but place, quite pushing there, remember, system I be, desperately, right on is today, our production And we need but on now, now. think, -- And system most

So really look encourage I way that's it. but the long at answer, best I this think about would And you a supply to the it's a December think take supplement? to

Brian Bird

one add thing, Bob, I'd like too. Bob, to just

participate wanted the in RFP build this participate take we that's another and year, to period. year, would be, pointed we'd call, There'll obviously, as place XXXX-XXXX that for period. as an in time earlier maybe we're in this think, Bob to time the that next for in builds like in early And well. I going RFP 'XX-'XX late to going think opportunity be the out to have to

sure make that people So really want of these I to just X to understand there's coming. going be

Robert Rowe

one comment just there. And more

look capital forecast there, at as positive at, future If X-year project and again, layered quite think of might be how the think in you about any I that's well. kind

Andrew Levi

for Okay. And I should at then Brian. question's this said have beginning, the Brian. congratulations,

Brian Bird

Thanks, Andy.

Andrew Levi

Very you. proud of

almost You're there.

Executive the Executive here in but CEO We're actually almost in the the You're office. suite. suite,

there. almost You're

see. So let's

The thing you it's as I Because far plan, As So one are an is understand look, us your it. ATM just straightforward, issuing. don't outstanding. shares just versus give you okay? I doing really very why financing though, understand, the

take on because, exaggerating, so to your people of easily It's all to take, Because trades like down the thinly, truly, it's we at is. the because some small to could of take then because market and as But shares affecting utilities wouldn't a like do unfortunately stock stock have lot a other it like you the current me, moment this the at discount, me the or I today. all give which you why So and this was stock shares and going that And traded XXX,XXX really X:XX, general, it you traded like I'm close of about it it. like trades can or way X.X the do believe like it looks performance us? in XXX,XXX like the shares. by XX need not of issue year, equity like just year, million shares your right, is million whether

Brian Bird

you bullish well. capital bit I said, do to you us have to generation going period raise this, to this $XXX tell also going the time both I and up But from sense in know, I in -- to in from year a ATM, is of our be that in over this, needs. needs. I'd share issue shares. like your with Well, well. our we're current view, right over that makes like plan on of us meet better it to the build, reason anything else. Dakota terms the nothing it's And doing here. served three we along, fact, would side We that what doing now, We're as price had current that tell for million could possibly South plan appreciate precludes we've us something great another Andy. quite period. comes would past. a you But There's tell our ATM success as you If is the I we

Andrew Levi

block mean, I I I it, wanted if guess, what And don't that's to guess -- no know is I saying a if of ATM just as term, right your from your for and is come you're a stock, make to part that the put understand, through not could you down ATM, I well. of that a the -- bid, take guess block better way someone small be to

Brian Bird

ATM either if better along. else, else we just I'm comes have use to flexibility or the something saying something

Travis Meyer

Credit take [Operator Michael Weinstein Instructions]. next Suisse. at from We'll question the

Michael Weinstein

this were forward, it year? test yes, I'm if And your guess, -- looking right? follow a that's you to of year, in considering know I I Montana year, what So funny really in you're a like. going thinking XXXX on about up questions, is Andy's to terms timing is what do just cases as rate don't going wondering XXXX So if

right? provide April, normally, in think, I update an But... you

Robert Rowe

I Montana. "all eventually rate hands in will on implementation. case will preapproval file associated the will supply And it an can plan will Yes. think a filing I focus with our we on confidently the say be year, that be focus -- deck" This

Michael Weinstein

Right.

would primary the will take of the be going of year? be focus that to That's this year So the most preapproval.

Robert Rowe

basically -- clock. they to once be a filing shot sufficient, X-month the determine they're realistically, think I they're on

Michael Weinstein

Is the then at that this And the it's I disallowance me a final been on I let the $X.X Colstrip. guess the do -- in couple have wanted transmission point, the here, mean, mean, of see I Right. years ability I not to about million? -- about but see the you transmission, rates, making. the

Robert Rowe

It is final. Yes.

Michael Weinstein

Yes. thought analysis sounded like It's And -- is provided that a recovery I of reason Montana the you just it is you mean, there sounded your reasonable. pretty explanation final why just fault. not didn't deserve a that?

Robert Rowe

thought then, and the We that Crystal down and what very a but witnesses the whether certainly disappointed -- of timing to And so. do taking We secondly, One plant concerned, partially There strongly two to questions. the not market it proceeding. with were with in a key was commission was had associated basically were the under with now that imprudent outage in compliance past statute of procure the environmental some the we to and passed. deadband And when the went one decided. for we're period, way appealing. disagreed elimination power; replacement of is was

to tariff, new commissioners, improve on continue things. really the commission hand, working other on are, the the to the We new focused with

Michael Weinstein

has been that look there's the on sure forward, what In sort going cold be fact, that regulatory any jobs going improvement you of what might subject, I In have the you are on makeup of maintained kind Do some that any legislative going it some commission do or the on like there -- might looks comment terms new priorities changed chance new forward? of for the in guess past, of Is focus state. forward. making room this -- think? like of always in treatment

Robert Rowe

and are with think, an the supply the there the a We COVID regulatory being efficiently -- committed the going with very, what weeks. I be to to -- and number regional relationship to to South X in to substantive very from I hope going focus got with of couple They deficit, new We've I'm returning. driven very in that as I the commission to to we're think, you've course, X new the consumer by reciprocating, commissioners my of of and a degree their They good had with relationship are obviously, presentation to really meetings. be staff areas commissioners excellent something the the lot Chairman that back X commission's first, commission. the want focusing ultimately, What of time, graduate is, are believe land, spending positive. tax. there concerned are, would And them December. to as in Most we serve That's finance. at we were legal very advocacy the a to that invest He's impressed overview same January, consumer him. the an process, commissioners in the our decisions Dakota successful and with into and overview are a to additions working Commission commissioners, impression of in the bring Brown -- on lawyer. is exposure and impressed, important about their peak new got I'm able company We of a had, then, engaged. financial At the council. had comment had, out We've commission. the are counterparts the RFP. as really got by who He's really that's our extremely customers commissioners very very far strong with our leaders operations the fantastic and where kind all of our a concerned Even commission the think on the council the market informational of understand a that's the about time, the and managing to folks Montana, operations. have the in full we and I concerns well. the same to addressing state of jobs need translated by a

affect decisions to our job. do ability I So how their our understand

very that. encouraged of So by all

the a he The would the say that between alignment is in is create Gianforte, He very technology is of at life. key closely useful wealth a commission. to for then to to and I challenges many essential will commission about, talked able majority And the think, a subject many, been back for very its two subject In larger He as legislature, in so commissioners Colstrip the He been investment now the a entrepreneur. actually to committed for They legislature and the governor, with Governor the the political is years, ultimately right new been in commission, time. that in committed the state's that viability has first Republican infrastructure. other at Montana very that governor. thing to to point, at sold continued strong work. founded kind we've successful time to value be Montana scale there's certainly made in the asset has to he if Montana. is on much is company would not invest work -- had I've the And the increased. have Oracle. important maintaining Oracle the the I we additions

Michael Weinstein

illustration sort outage for purchases on of write-off, of Colstrip Yes. the I guess for of with state in the view is reliance would wondering at a -- at if about market a I'm that, the cost is problem. have the purchase has it's be why just if an the write that that guess, utility. generation It's I striking view, changing ownership prevailing the perfect been that you power going me inconsistent, just And to western that's off that to forward.

Robert Rowe

generation the nonorganized the it the would particularly of do greater we we much generation exposed is zero. is talked be we anything, would about more -- had And there market. more own than customers. of out to perspective, is less And vastly market beautiful, and regional looking value more appreciation below we any many our And the window, much, of at of to as our our serve the comfortable portfolio. I than that, in say for of snowing a it's control don't owned how peers. again, but our resources if are of it we peak I own if And companies, part of

Michael Weinstein

Makes Brian Crystal. sense. Congratulations, and

Brian Bird

Thanks, Mike.

Travis Meyer

Wells next our Jonathan We'll call Reeder Fargo. take of from

Jonathan Reeder

you Can hear now? me

Travis Meyer

can, Jonathan. Yes. Sure

Jonathan Reeder

getting the last your with Bob. thoughts have there's what the on think You some that color we But year? it, almost were in one I that this into kind been there, are Montana thought, of of bills I introduced Where this the you plans? RFP process, that think impact preapproval how another and the time And get while would of expedite year? head rid the authorize the to that does preapproval. MPSC has RFP future current those do the

Robert Rowe

Yes. legislators tabled, be of eliminating much that. -- that preapproval vetoed. than been for has were sponsored preapproval which current bills will we're I go example, actually bill were the passed legislation by and ones, either very feel go soon previous we bills, honestly, attention that unfortunately, more is then are a good bill the has sponsored in fact, I bill and to paying much repeal the previous the bill, the And other bill number preapproval quite the are bill already forward to or And And the about majority in preapproval think appropriate. tabled, directly, likely the clarifying minority. Very believe to the likely is more process forward. by the been

very to do us this it's So And I that to important. legislative better opportunity allow that's an there's our in things customers. serve think will some -- session

Jonathan Reeder

trying to about might passed Are should in have fall comment legislative vetoed. aware have any interesting that I'm or what bucket they that there that past been... make of? to That's be back but sessions we to think then ones that the particularly

Robert Rowe

to come immediately. that mind Two

and, didn't subsidies prohibited will and customers available that to net make without legislature prohibit customers. make It metering in hoping that certainly support the the other metering. can I'm prohibited sustainable fact, metering. that to our in progress fair be something unfortunately, from there cross harming And simply we vetoed program, It's a of bill. one One the subsidies customers that governor another. of to previous group

serve -- our be thresholds. preps really not and that cost was as portfolio The and The challenge size bill energy both was the has projects certain very to be vetoed that unworkable. threshold meet to renewable and below difficult second meet It's in approved session the previous we community found a both standard. qualify had to And very, the to to is customers.

big So us. distraction it's a for been

to most a or we We that have but believe modifying eliminating our get -- of requirement, to be way requirement that managed would step the forward. certainly substantial

Jonathan Reeder

the of into I second it had effect will of the mid-'XX. Okay. other Montana And half flow the period? XXXX? occur only us, not decoupling in we on the Or P&L the true-up pilot does goes normal that the XX-month the until through to then was see end Remind question in

Robert Rowe

the the new going answer in role. Lail that. to to was first to spot I'm put close her Crystal on question She

Crystal Lail

this report my and Yes, expect we that July, one throwing pilot that. Jon, Thanks, we point still beginning at FCRM, implement will to in way. the

in a quarterly basis. our You'll see on it earnings

Travis Meyer

Greenwald next our Bank line We at of from America. take will the Ryan call of

Ryan Greenwald

hear you Can me?

Travis Meyer

We sure can.

Ryan Greenwald

Crystal. both to Congratulations and Brian

Brian Bird

Thank you, sir.

Ryan Greenwald

you So would with of kind Montana successful of get additional are dollar on guys you assuming needs projects you generation spend how the the the in guys of frame from some and equity here? preapproval,

Robert Rowe

Brian?

Brian Bird

Yes. I'll one. grab that

XX-XX I think I structure that. would it's a practical just assume purposes, for with capital associated

Ryan Greenwald

and lastly, for how the just space the valuation then discrepancies anything consideration you currently -- kind trading, And just strategic maybe you. are here? where Got you of in from framing are given across guys

Robert Rowe

you That the in was want an artful on front one of to do time? this say right Brian, really we would focused What way us. opportunities to that put I take the question. are is

Brian Bird

this Bob. grab I'll one,

are value road, the as increase of I stronger not the company, we positioned and strategic our And is way us to be. where that our share we'd either thing turns now, people my right our isn't can average, And price, creates position. do our peers, three our best certainly relative think should today. in it than be think a We're opportunities we better down peer certainly and think perspective, from certainly we worse have I undervalued. some the

Robert Rowe

to if comfortable good is And the us, company the financial with for front we're the good very in customers. on going back able for and Montana, of more to focusing again, ultimately, that's what's and invest if community

Travis Meyer

his all like and after fun as do more Andy skiing raised looks this hand Andy, than have decided though It you another again. question? was Levi appears he

Andrew Levi

price No, strategic could. mean I nothing do. where where just is, question, like mean can last is, just like the the on your logically, P/E like you stock question, ratio very your there's I looking you at like,

somebody like want that your looking you as on Is I you would You you deal. there's there? at. really aren't value. I But crazy something to nothing some there's and could you really I price, understand mean, do. your I be looking -- do would view like stock But dilutive kind based strategically get guess of that guys to do can

Robert Rowe

where I you answer by would this going are skiing weekend? And that saying,

Andrew Levi

fine. that's Okay,

Brian Bird

no that Yes. Andy, take to but commentary, just great question. going as we're

appreciate opinion. I So your

Robert Rowe

you I'm tell going soon to in that. will I as here, as and go out worth play

Andrew Levi

think latest guys the your but I Well, super, to that at want I kind are to you well, think stock shopping super look absolutely. for do you want price don't if here, you people look, I it's out but XX-F, something. of And start cheap

Travis Meyer

that, All right. looks like With we've our exhausted queue. it Friday afternoon

to call. to over the And will out hand so Bob and/or I it Brian close

Robert Rowe

to as many do He's with the Just job great many, to way fantastic finish years. COO. going as a been Brian for CFO we to it's work started,

looking of are All as on just to career, can as him the needs Crystal, role capacity. And in stepping be. working prepared that into well about operational her is with new her forward based

than I'm snow. good the play your everyone as for is day to Friday I said, us And spending with weekend. three go you thank going us outside other what in a a before and for So weekend. Have

Brian Bird

a Bob, of couple to like just if I could, I'd say things.

Robert Rowe

gosh. My Absolutely. Yes.

Brian Bird

all, of XX know our years different Bob, roles. I just likewise, actually with first Well, combined continues

-- And probably sits. I for to I I'm Crystal this great and her, our certainly also Crystal. relationship that's and even on years. adding enjoy excited early my expect my started in where ago job period. And like XX that the look forward a those continue XXs, so from similar I make knows than in is better Meyer. to one things enjoy to to space. works I know years time a performance two of and team Travis. Travis may job. fantastic He does The I'd lastly, this thank with I Tory think fantastic And of you not Payne, IR over department Everybody them best Tory. who

for well. help their so And those as want I to thank guys

as -- of the company. you've and who only that the Really but support you CFO. the of company, support thank all support me given So appreciate not

much. you very thank So

Travis Meyer

a close. for that, again, And with that Thanks, us. joining to brings webcast us

disconnect. may now You

NorthWestern (NWE) 12 Feb 212020 Q4 Earnings call transcript