Northwestern Energy Group, Inc. · NASDAQ:NWE
Northwestern Energy — Transmission Seminar hosted by Shields & Company and Berenson & Company (January 2010)
22 slides from Northwestern Energy's conference presentation, Jan 6, 2010
Slide 1: Transmission Seminar
Transmission Seminar Hosted by Shields & Company and Berenson & Company January 7, 2010
Slide 2: Forward-looking statement
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
Slide 3: Who we are
Located in states with relatively stable economies with potential grid expansion to support renewables. who we are… (1) As of 9/30/09 (2) Book capitalization calculated as total debt, excluding capital leases, plus shareholders’ equity. ¾ 656,000 customers » 392,000 electric » 264,000 natural gas ¾
Slide 4: NorthWestern's attributes
¾ Solid operations » Cost competitive » Above-average reliability » Award-winning customer service ¾ Improving credit ratings and strong balance sheet and liquidity » Secured and unsecured investment grade ratings » Moody’s has us on “positive” outlook ¾ Positive earnings and ROE trend » Colstrip Un
Slide 5: Secured credit ratings
SECURED CREDIT RATINGS sep ooay's IASI: —riten BBB+/Baa1/BBB BBB/Baa2/BBB Investment Grade BBB-/Baa3/BBB- BBH/Bat/BB+ 2005 2006 2007 2008 2009 ‘September 30, 2009 Agency ‘Secured Unsecured ‘Outlook Standard & Poor's ‘A- (MT) ‘BBB Stable BBB+ (SD) ‘Moody's Investor Services Ag Baa2 Positive Fitch Rat
Slide 6: Strong balance sheet and liquidity
strong balance sheet and liquidity… ¾ Debt / Total capitalization of 53.4% (9/30/09) ¾ October » $55 million, 30 year First Mortgage Bonds issued at 5.71% ¾ June » Extended unsecured revolver maturity to June 30, 2012 » Increased size from $200 million to $250 million ¾ March » $250 million, 10 year
Slide 7: Competitive dividend
Goal for dividend payout ratio of 60% - 70%. Current dividend yield about 5.1%. competitive dividend…
Slide 8: Near-term potential earnings drivers
Near-term earnings drivers independent of transmission projects. near-term potential earnings drivers… ¾ 2010 » Expecting flat volumes ♦ Due to higher mix of residential/commercial vs. industrial customers as compared to other utilities ● Electric: 67% Residential & Commercial, 33% Industrial ● Natu
Slide 9: Longer-term potential earnings drivers
Balanced growth opportunities across the business. longer-term potential earnings drivers … ¾ Distribution system enhancements » Exploring incremental rate based investment (early stages) ¾ Energy supply » Mill Creek Generation Station » South Dakota peaking generation » Natural gas reserves (early
Slide 10: Transmission network summary
10 transmission network summary… ¾ Requests to perform new functions ¾ Help meet RPS and other environmental goals » Transmission investment driven by demand for renewables ¾ Investments with externality and coordination challenges ¾ State, regional national interests
Slide 11: Wind potential in our service territory
wind potential in our service territory …
Slide 12: Demand for renewables increasing
demand for renewables increasing…
Slide 13: Montana wind development
Xx x Montana wind development…
Slide 14: Montana is between resources and loads
Montana is between resources & loads…
Slide 15: NWE proposed transmission projects
NWE proposed transmission projects… Collector System Colstrip Upgrade MSTI
Slide 16: Colstrip kV upgrade
Colstrip 500 kV upgrade… ¾ NWE, other Colstrip Transmission owners and BPA ¾ Upgrade existing 500 kV lines from Colstrip MT to Mid C ¾ Provide additional access to Northwest markets ¾ May Add 500-700 MW capacity ¾ In service 2012 Garrison Sub Colstrip Gen Bozeman Missoula Billings Great Falls Helena
Slide 17: Mountain States Transmission Intertie
Mountain States Transmission Intertie… ¾ 500 kV AC line from Townsend MT to Midpoint Substation near Twin Falls ID ¾ Approximately 430 miles depending on final route ¾ 2 major substations in MT; 1 interconnection in Idaho ¾ Advanced stages of public siting and review - began in ¾ 1500 MW path rating
Slide 18: Collector project
Collector project… ¾ Currently 3,700 MW in generation interconnection queue ¾ Provides a radial gathering system for new generation to access MSTI and the ‘grid’ ¾ Informational meeting with customers in early 2010 ¾ The actual project defined through an Open Season in early ¾ Current project cost i
Slide 19: Other proposed transmission projects
HVDC other proposed transmission projects… Zephyr TransCanada SWIP LS Power Chinook TransCanada
Slide 20: Capex spending - next few years
We will move forward with the funding of these projects only when they make economic sense. Additional equity not anticipated until we proceed with MSTI or other major investments. MSTI project is now slated for early 2015 and capex has been modified accordingly. Capital still shown at 100% but stil
Slide 21: Growth project potential
Opportunity to double and diversify earnings as compared with our existing $1.5 billion rate base. growth project potential…
Slide 22: In summary
in summary… ¾ Solid operations ¾ Improving credit ratings and strong balance sheet and liquidity ¾ Positive earnings and ROE trend ¾ Strong cash flows ¾ Competitive dividend ¾ Improving regulatory environment ¾ Realistic growth prospects