Northwestern Energy Group, Inc. · NASDAQ:NWE
Northwestern Energy — Williams Capital Research Transmission Conference 2012
40 slides from Northwestern Energy's conference presentation, Jan 11, 2012
Slide 1: Williams Capital Research Transmission Conference
Williams Capital Research Transmission Conference January 11, 2012 Presented by: Mike Cashell, Vice President - Transmission Brian Bird, Vice President, CFO & Treasurer
Slide 2: 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 future business and financial
Slide 3: Outline
Outline Who we are Financial update Investment opportunities Transmission development Public policy
Slide 4: Geographically positioned for success
Geographically positioned for success ð Our service territory covers some of the best wind regimes in the nation ð We have the opportunity to provide transmission services into two different markets (West and Midwest) Low unemployment rates ð A fully-regulated utility located in states with relative
Slide 5: We are a fully regulated utility with a significant opportunity
We are a fully regulated utility with a significant opportunity to fill a needed supply gap in addition to other investment projects. Note: Statistics above are as of 12/31/2010, except SD peak MW as a new summer peak was set in 2011 (1) Nebraska is a natural gas only jurisdiction (1)
Slide 6: The "80 / 20" rules of NorthWestern
The “80 / 20” rules of NorthWestern. We are approximately 80% electric / 20% natural gas A multi-state electric & natural gas utility Note: Data above reflects full year 2010 results .
Slide 7: Outline
Outline Who we are Financial update Investment opportunities Transmission development Public policy
Slide 8: Debt to capitalization and liquidity
ð Long-term targeted total debt to capitalization of 50-55% with a current capitalization of 54.9% (1) ð Total liquidity of $210 million as of Oct 21, ’11 ð Refinanced nearly all debt in the last 2 years – Lowered average coupon on long-term debt by 1.2% and extended maturities – Amended and restate
Slide 9: A history of earnings and dividend growth
A history of earnings and dividend growth
Slide 10: Cash from operations and dividend growth
8.3% Cash From Operations 6.6% Dividend Growth Compounded Annual Growth Rate (CAGR)
Slide 11: 2005-07 valuation affected by terminated acquisition
2005-07 valuation affected by pending and ultimately terminated acquisition
Slide 12: Outline
Outline Who we are Financial update Investment opportunities Transmission development Public policy
Slide 13: Investment opportunity outlook
Investment opportunity outlook ð Energy Supply – Big Stone/Neal pollution control – South Dakota natural gas peaking generation – Montana Spion Kop Wind facility – South Dakota Titan Wind facility buyout – Other vertical integration opportunities in Montana ð Transmission – Network upgrades and larg
Slide 14: Outline
Outline Who we are Financial update Investment opportunities Transmission development Public policy
Slide 15: NorthWestern Energy Transmission
NorthWestern Energy Delivering Bright Future => Transmission — Servingour states with extensive natural gas and electrictransmission systems serving large territory — Servingthe region with proposednew linesto address regionalconcerns — Roleoftechnologyin how customers interact with utility
Slide 16: Regional planning process
Regional planning process ð Coordination with other sub- regional planning groups and WECC RED INDICATES EXISTING NTTG MEMBER TRANSMISSION
Slide 17: Intermountain region - Today
Intermountain region - Today
Slide 18: Intermountain region - Tomorrow
Intermountain region - Tomorrow Some potential additional projects ð 62 projects listed in the WECC project portal are proceeding through path rating ð Some are shown in the graphic
Slide 19: WECC TEPPC 10-Year Regional Transmission Plan
WECC TEPPC 10-Year Regional Transmission Plan ð Transmission Expansion Planning Policy Committee (TEPPC) – Funded, in part, by a grant from the U.S. Department of Energy (DOE) – First Interconnection-wide transmission plan – Some key findings • Some long-distance transmission to access remote renewa
Slide 20: WECC Path Rating process
WECC Path Rating process ð Purpose – Provide a formal process for rating a transmission line – A demonstration how a project will meet the NERC Reliability Standards and WECC Criteria • Attain a WECC Accepted Rating ð This means… – The rating defines the capability or capacity of a transmission circ
Slide 21: Federal accelerated permitting
Federal accelerated permitting Pilot demonstration to streamline federal permitting and increased cooperation at federal, state and tribal levels WECC Rating ð Projects kV Miles States Process – Boardman-Hemingway 500 AC 300 OR-ID P2 – Gateway West Project 500 AC 1,100 WY-ID P3 – Hampton-Rochester-L
Slide 22: FERC Order 1000
ð Transmission planning – Regional transmission planning expanded – Include transmission needs driven by public policy – Coordination of transmission plans with neighboring regions – Federal right of first refusal to build eliminated (applies to RTOs only) ð Transmission cost allocation onal ð Obser
Slide 23: What's in it for customers?
What’s in it for customers? ð Access to the highest quality renewable generation – Driven by regional renewable needs and opportunity for development ð Reduce overall regional costs to customers ð Access to markets ð Support public policy initiatives ð Doing the right things for the right reasons
Slide 24: Montana interconnection queue status
Montana interconnection queue status
Slide 25: Montana is between resources & loads
Montana is between resources & loads
Slide 26: NWE proposed transmission projects
NWE proposed transmission projects Collector System Colstrip Upgrade MSTI
Slide 27: Our transmission developments
Our transmission developments ð Observations – Montana major facility siting act does not easily apply to non local load service transmission development strategy – Transmission enables new resource to reach distant markets – Transmission needs must be understood in the context and time it will be n
Slide 28: Colstrip 500 kV Transmission Upgrade
ð Currently being developed primarily by BPA and NWE with the other owners having various levels of interest. Avista Corporation 10% 12% Pacificorp 7% 8% ð Initiallly idendified in RMATs study as being a piece of "low hanging fruit" ð No new linear facilities required ð 600-800 MW potential ð BPA/NW
Slide 29: Mountain States Transmission Intertie
Mountain States Transmission Intertie ð 500 kV AC line from Townsend MT to Midpoint Substation near Twin Falls ID ð Approximately 430 miles depending on final route – 70% on State and Federal Public Lands ð 1500 miles of alternatives ð Advanced Stages of public siting and Review - began in 2007 ð 15
Slide 30: Who pays for export transmission?
Who pays for export transmission? ð In NWE’s case – The filings made at the Federal Energy Regulatory Commission (FERC) clearly show that: • MSTI and Collector are being primarily built to serve new generation for export • These documents also clearly show that those customers who directly benefit f
Slide 31: MSTI Public Outreach - Where have we been?
MSTI Public Outreach - Where have we been? ð Public participation and involvement – NWE has always encouraged healthy and robust public debate! ð A robust open process with all Stakeholders – Federal and state agencies, counties, landowners and project developers ð Public Open House Meetings – 24 op
Slide 32: MSTI independent review process
ð NorthWestern Energy supports this third-party, independent review – Review will evaluate impacts and use a modeling process to analyze unbiased policy data, scientific data and community values – The process will also assess the economic impacts of the project to each county – All counties through
Slide 33: MSTI siting and permitting schedule
MSTI siting and permitting schedule ð MFSA Application Filed June 2008/Accepted December 2008 ð Open Season tentatively planned for late 2012 to early 2013 depending on market readiness ð Draft EIS Published 3rd Qtr 2012 ð Final EIS 3rd Qtr 2013 ð ROD & MT Certificate of Compliance - 4th Qtr 2013 ð
Slide 34: MSTI public vs. private land
MSTI public vs. private land ð Extensive review of local routing alternatives to maximize the use of public lands ð NWE Preferred Route – 54% Public Land 46% Private Montana – 73% Public Land Idaho ð Parallel existing BPA 500 kV Route – 63% Public Land 37% Private Montana – 73% Public Land Idaho ð F
Slide 35: Network Upgrades and Large Generation Interconnections
Network Upgrades and Large Generation Interconnections the cost of joining MISO as compared to the opportunities and other benefits that membership may provide. Investment opportunities are currently estimated to be between $300-500 million . The map below is from a September 2011 MVP Business Case
Slide 36: Outline
Outline Who we are Financial update Investment opportunities Transmission development Public policy
Slide 37: A lot of dirt between light bulbs in the West
A lot of dirt between light bulbs in the West ð Loads are sometimes a long way from generation – The same is true for access to the highest quality renewables – Often, the transmission necessary to deliver generation to the market spans company, geographic and political boundaries. ð Cost allocation
Slide 38: Policy issues affecting transmission development
Policy issues affecting transmission development ð Lack of coordinated and comprehensive regulatory process – Difficulty in satisfying competing federal, state and local needs – No RTO in western U.S., unorganized markets – Need centralized siting process for interstate transmission that serves regi
Slide 39: Conclusion
Conclusion Fully- regulated utility Financially sound Strong cash Attractive Realistic investment opportunities to invest Free Cash Flow
Slide 40: Questions
QUESTIONS Thank You
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