Northwestern Energy Group, Inc. · NASDAQ:NWE
Northwestern Energy — Shareholder Meeting (April 2023)
37 slides from Northwestern Energy's shareholder meeting presentation, Apr 28, 2023
Slide 1: Annual Meeting of Shareholders
Rainbow Dam - Montana Annual Meeting of Shareholders April 28, 2023
Slide 2: NWE's President & CEO – Brian Bird
2 NWE’s President & CEO – Brian Bird Brian B. Bird • Current position since January 2023 • President & Chief Operating Officer 2021-2022 • Vice President & Chief Financial Officer 2003-2021 • Board member since January 2023 • 25-plus years energy and utility industry experience • Serves on Board of
Slide 3: Experienced and Engaged Board of Directors
3 Experienced and Engaged Board of Directors Dana J. Dykhouse Brian B. Bird Anthony T. Clark Jan R. Horsfall Britt E. Ide • Chairman • President & Chief • Nom. & Gov., HR • SETO (chair), Audit • Nom. & Gov., HR • Independent Executive Officer • Independent • Independent • Independent • Since Jan. 20
Slide 4: Strong Executive Team
4 Strong Executive Team Brian B. Bird Crystal D. Lail Michael R. Cashell Cynthia S. Fang Shannon M. Heim • President & Chief • Vice President and Chief • Vice President - • Vice President - • Vice President & General Executive Officer Financial Officer Transmission Regulatory Counsel • Current posit
Slide 5: NWE's Auditors – Deloitte & Touche LLP
5 NWE’s Auditors – Deloitte & Touche LLP • Independent registered public accounting firm • Deloitte provides the following services for more than 20 industries: • Risk & Financial Advisory • Audit & Assurance • Consulting • Tax • Merger & Acquisition • Artificial Intelligence and Analytics • Cloud •
Slide 6: NWE's Board Chair / Meeting Agenda
6 NWE’s Board Chair Dana J. Dykhouse • Director since January 30, 2009 • Chief Executive Officer of First PREMIER Bank in Sioux Falls, South Dakota. • Serves on the boards of directors for Junior Achievement of South Dakota, the South Dakota State University Athletic Champions Council, Sioux Falls D
Slide 7: Corporate Secretary's Report
7 Corporate Secretary’s Report Report • Affidavit of distribution for the proxy materials • Registered holders of common stock of the Company • Establishment of a quorum
Slide 8: Items of Business to be Considered
8 Items of Business to be Considered Election of Directors • Our Board is nominating 10 people to serve as directors for one year. Ratification of Deloitte & Touche LLP, as Independent Registered Public Accounting Firm for 2023 • Our Audit Committee oversees the integrity of our accounting and finan
Slide 9: Electronic Voting
9 Electronic Voting • If you have not voted: Please use the virtual meeting voting platform to cast your vote now. • If you previously voted, but want to change your vote: Please use the virtual meeting voting platform to cast your new vote now.
Slide 10: Forward Looking Statements
10 Forward Looking Statements Forward Looking Statements 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
Slide 11: Guiding Principles
11 Guiding Principles Our Vision Enriching lives through a safe, sustainable energy future Our Mission Working together to deliver safe, reliable and innovative energy solutions Our Values Safety Excellence Respect Value Integrity Community Environment
Slide 12: NWE - An Investment for the Long Term
12 NWE - An Investment for the Long Term • 100% pure electric & natural gas utility business Black Eagle dam Pure Electric & with over 100 years of operating history Gas Utility • Solid economic indicators in service territory • Diverse electric supply portfolio ~55% hydro, wind & solar • Residentia
Slide 13: About our Company
13 About our Company 764,200 “Everything works – and will continue to Customers work – as long as we have electricity. It’s what keeps the lights on, the oxygen flowing, the information going. 1,530 Everything is the grid, the grid, the grid.” Employees - Peggy Noonan Wall Street Journal Columnist 3
Slide 14: About NorthWestern
14 About NorthWestern South Dakota Operations Electric 64,700 customers 3,650 miles – transmission & distribution lines 446 MW nameplate owned power generation Natural Gas 49,200 customers 1,779 miles of transmission and distribution pipeline Montana Operations Electric 398,200 customers 25,131 mile
Slide 15: A Diversified Electric and Gas Utility
15 A Diversified Electric and Gas Utility (1) (1) NorthWestern’s ‘80/20’ rules: Approximately 80% Electric and 80% Montana. Over $4.5 billion of rate base investment to serve our customers Data as reported in our 2022 10-K (1) Utility Margin is a non-GAAP Measure. See appendix for additional disclos
Slide 16: Highly Carbon-Free Supply Portfolio
16 Highly Carbon-Free Supply Portfolio MT NWE Contracted energy from Colstrip Energy Limited Partners (CELP), Yellowstone Energy Limited Partners (YELP) as well as a majority of the contracted wind, hydro and solar are federally mandated Qualifying Facilities, as defined under the Public Utility Reg
Slide 17: Clean Portfolio vs National Average
17 Clean Portfolio vs National Average 55% Carbon-Free Owned and Long-Term Contracted Portfolio in 2022 vs ~40% National Average (2022 data) NWE Based on MWh’s Montana & Source: U.S. Energy Information Administration – form EIA.gov South Dakota Table 7.2b Electric Net Generation: U.S. Electric Power
Slide 18: MT Generation Portfolio Timeline
18 MT Generation Portfolio Timeline * Federally mandated Qualifying Facilities contracts with CELP (Colstrip Energy Limited Partnership) and YELP (Yellowstone Energy Limited Partnership) expire in 2024 and 2028, respectively. ** Excludes 194 MW Kerr Dam which was purchased and subsequently transferr
Slide 19: Strong Utility Foundation
19 Strong Utility Foundation Solid and generally improving JD Power Overall Customer Satisfaction Scores * NE bills temporarily impacted by ongoing recovery of Residential electric and natural gas rates below national average * the February 2021 prolonged cold weather event that Solid electric
Slide 20: Solid Economic Indicators
20 Solid Economic Indicators Source: NorthWestern customer growth - 2008-2016 Forms 10-K Unemployment Rate: US Department of Labor via SNL Database 2/21/17 Electric: EEI Statistical Yearbook (published December 2015, table 7.2) Natural Gas: EIA.gov (Data table "Number of Natural Gas Consumers") Sour
Slide 21: Hard Assets Providing Real Value
21 Hard Assets Providing Real Value $3.30-$3.50 $3.10 - $3.30 $2.60$3.20-$3.40 - $2.75 Compound Annual Growth Rates (CAGR) 2009 – 2022 Net PPE (Gross Property Plant and Equipment less Accumulated Depreciation): 8.5% Market Cap (Equity shares outstanding times stock price): 10.8% Enterprise Value (Ma
Slide 22: Maintaining Affordability for our Customers
22 Maintaining Affordability for our Customers NorthWestern’s typical electric and gas bills are below national average even considering the significant burden of Montana property tax increases and recent severe price pressures, especially for market prices of energy, that have impacted customer rat
Slide 23: Credit Ratings
23 Credit Ratings While great strides have been made since emergence from bankruptcy in 2004, regulatory concerns in Montana have put pressure on credit ratings over the last few years, including a March 2022 downgrade of our senior secured, senior unsecured and commercial paper credit ratings by Fi
Slide 24: Year In Review
24 Year In Review Operational performance • Maintained safe and reliable service while reaching new all-time system peaks for both electric (Montana & South Dakota) and natural gas (Montana & Nebraska) systems in 2022 • EEI Emergency Response Award recipient following May derecho in South Dakota a
Slide 25: Capital Investment
25 Capital Investment ($millions, unless stated otherwise) 5 Year History of Capital Investment 5 Year Forecast of Capital Investment Yellowstone County Generating Station Over $2.1 Billion investment* over last 5 years $2.4 billion of forecasted low-risk capital investment opportunity… Capital inve
Slide 26: Key Policy Drivers for Investments
26 Key Policy Drivers for Investments Capacity Reliability The delivery capabilities of the Delivery systems’ expectations versus system necessary to meet actual performance operations, reliability and growth parameters Key Policy Drivers Asset Life Compliance Life of an asset based on a set level o
Slide 27: Supply Update
27 Supply Update Electric Supply Resource Additions South Dakota: 58 megawatt Bob Glanzer Generating Station place in service in May 2022 completed under budget with a total cost of $83.1 million Montana: 175 megawatt Yellowstone County Generating Station • Construction began in April 2022 with cos
Slide 28: Yellowstone County Generation Facility
28 Yellowstone County Generation Facility Broke ground in April 2022 on the 175-megawatt, $275 million, natural gas plant south of . Laurel, MT. Designed specifically to provide peak capacity and support the intermittent nature of renewable energy Current schedule anticipates commercial operation du
Slide 29: Colstrip Transfer
29 Colstrip Transfer Reliable Existing resource, ready to serve our Montana customers. Avoids NorthWestern Energy executed lengthy planning, permitting and construction of a new facility that would an agreement with Avista stretch in-service beyond 2026. Corporation for the transfer of Reduces r
Slide 30: December 2022 Polar Vortex
30 December 2022 Polar Vortex The chart illustrates the actual resource specific contribution of energy, the capacity deficit we faced, and the market price of power during the late December 2022 multi-day cold weather event in Montana. As a result of our capacity deficit, we were reliant upon the h
Slide 31: Transmission System Update
31 Transmission System Update Electric Transmission: • In June 2021, we joined the Western Energy Imbalance Market (WEIM). WEIM active & Pending Participants This real-time, within-hour energy market will provide the company’s Montana customers with economically efficient energy to resolve imbalance
Slide 32: Distribution System Update
32 Distribution System Update Five Year Projects System Efficiencies • Advanced Distribution Management Systems (ADMS) Enhancements • Fault Location, Isolation and Service Restoration (FLISR) Implementation • Distribution Energy Resource (DER) Integration Operational Efficiencies • Determination of
Slide 33: Conclusion
33 Conclusion Best Attractive Improving Pure Earnings & Solid Utility Practices Future Electric & Cash Flows Foundation Corporate Growth Gas Utility (current rate Governance Prospects review pending)
Slide 34: Question and Answer
34 Question and Answer • Please submit questions through the virtual annual meeting website. • We will edit profanity or other inappropriate language. Questions must: We will edit • be pertinent to meeting •profanity Questionsor other must: matters • Be pertinent to meeting inappropriate matterswith
Slide 35: Preliminary Results
35 Preliminary Results 1. Election of Directors 2. Ratification of Deloitte & Touche LLP, as Independent Registered Public Accounting Firm for 2023 3. Advisory Vote to Approve Named Executive Officer Compensation 4. Advisory Vote to Approve Frequency of Future Advisory Votes on Named Executive Offic
Slide 36: Thank you for attending today's Annual Meeting
36 Thank you for attending today’s Annual Meeting
Slide 37: Non-GAAP Financial Measures
Appendix 37 Non-GAAP Financial Measures This presentation includes financial information prepared in accordance with GAAP, as well as other financial measures, such as Utility Margin, Adjusted Non-GAAP pretax income, Adjusted Non-GAAP net income and Adjusted Non-GAAP Diluted EPS that are considered
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