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NorthWestern Energy Group (NWE) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Utilities· Jul 30, 2026

Source: earnings call transcript

Executive summary

NorthWestern Energy Group Q2 FY26 — Merger Approval Pending, Data Center Progress, and Reaffirmed Guidance

NorthWestern Energy Group reported solid Q2 FY26 non-GAAP EPS, driven by improved margins and new rates, while reaffirming its full-year guidance and long-term growth targets. The company continues to advance its merger with Black Hills, securing multiple regulatory approvals and anticipating a Montana PSC decision in Q4. Significant progress is also being made on data center opportunities, with two key projects targeting ESAs by year-end, alongside ongoing efforts to address transmission needs and manage incremental Colstrip costs.

Highlights

5

  • Reported non-GAAP diluted EPS of $0.50, reflecting a $0.10 increase from Q2 2025.

  • Affirmed 2026 earnings guidance range of $3.68 to $3.83.

  • Affirmed long-term rate base and EPS growth rate targets of 4% to 6%.

  • Secured merger approvals from the Nebraska PSC, South Dakota PUC, and FERC for the Black Hills transaction.

  • Multi-year capital plan of $3.2 billion from 2026 through 2030 remains on track and unchanged.

Concerns

5

  • GAAP diluted EPS of $0.40 was impacted by merger-related costs, incremental Colstrip ownership, and weather.

  • Incremental full-serve Colstrip ownership resulted in a $0.12 impact on Q2 GAAP EPS and $0.05 of unrecovered operating expenses on adjusted EPS.

  • The SEBI data center project's Energy Service Agreement (ESA) is delayed beyond year-end due to land procurement issues.

  • A sales tax issue on equipment purchases in South Dakota continues to be a hurdle for large-load customers.

  • The company faces public pushback and misinformation regarding data centers in some communities, requiring enhanced communication.

Guidance & targets

CategoryTargetConfidence
2026 Adjusted EPS
$3.68 to $3.83
high materiality
High
Long-term Rate Base Growth Rate
4% to 6%
high materiality
High
Long-term EPS Growth Rate
4% to 6%
high materiality
High
Multi-year Capital Plan
$3.2 billion
high materiality
High
Quarterly Dividend Per Share
$0.67
medium materiality
High
Combined EPS Growth Rate (post-merger)
5% to 7%
high materiality
Medium

Orderbook & backlog

Quantica Data Center 1.1 GW Q2 FY26

Focus is on 1.1 GW for initial phase; expected ESA by year-end 2026.

Atlas Data Center 0.5 GW Q2 FY26

Expected ESA by year-end 2026.

SEBI Data Center 0.5 GW Q2 FY26

ESA delayed beyond year-end 2026 due to land procurement issues.

Deals & partnerships

Black Hills Corporation Merger of two utility companies to create a larger, more competitive entity.

Received approvals from Nebraska PSC, South Dakota PUC, and FERC. Awaiting final order from Montana Public Service Commission. Integration planning is underway.

Capital programs

Multi-year Capital Plan on track $3.2 billion
Start: 2026

Benefit:Essential investments to meet customers' needs

Plan remains on track and unchanged. Does not include any incremental investment that may be driven by additional opportunities related to regional transmission growth or serving large loads.

Risks & headwinds

Unrecovered Colstrip Operating Expenses Q2 FY26, ongoing until rate review

$0.05 per share impact on Q2 adjusted EPS

Mitigation:Plan to file a rate review to put the asset into base rates; PCCAM tariff waiver docket progressing through Q4 2026/early 2027.

Data Center Project Delays (SEBI) Current, ongoing

SEBI ESA delayed beyond year-end

Mitigation:Working with SEBI on land procurement items.

Sales Tax Issue in South Dakota for Large Loads Ongoing

Hurdle for large-load customers

Mitigation:Hopeful for resolution in upcoming legislative session.

Public Pushback on Data Centers Ongoing industry issue

Moratorium discussions, ballot petitions, misinformation

Mitigation:Need for better communication and collaboration with communities; commitment to ensure data centers pay their own way.

Regulatory Uncertainty (Montana PSC Merger Approval) Decision expected mid-October to mid-November 2026

Awaiting final order from Montana PSC

Mitigation:Actively engaged in integration planning to be prepared for closing; cautious optimism for approval.

What to watch in Q3 FY26

Montana PSC Merger Approval Decision

Mid-October to mid-November 2026
Current Final briefing completed, awaiting order
Target Approval decision

Why it matters

Crucial for the merger with Black Hills Corporation to proceed, impacting future EPS growth and strategic direction.

Speaking of the decision and waiting on a decision from the Montana Public Service Commission, we note on this slide that that's in the fourth quarter. I think people understand from the timing that is in front of the commission that we believe that upon our filing our briefing in mid-July that we would see a decision sometime in 90 days to -- it can extend another 30 days. So 90 to 120 days, we should see a decision. That should mean a decision sometime between mid-October and mid-November.

Find out whether NWE delivers this. Inve re-checks your case every morning.

Q&A highlights

What is the probability of realizing the full 7.2 GW interconnection request for Quantica, given the disclosed 1.1 GW for Phase 1?

Brian Bird stated that the company is focused on the 1.1 GW for Quantica and that success at lower gigawatt levels is needed before discussing larger scales. He deferred to Quantica to discuss their long-term build-out plans.

“I think we all need to have success at these lower gigawatt levels. And if we're ultimately in an ESA perspective, and we're moving forward with Quantica, we'll let them talk about their relative success and how to ultimately build up to that level. But as we sit here today, we're focused on the 1.1 gig.”

asked by Aidan Kelly · answered by Brian Bird

2 min read 6 chapters

Detailed narrative

Merger Progress and Outlook

The merger with Black Hills Corporation is progressing, with approvals secured from Nebraska PSC, South Dakota PUC, and FERC during Q2. The final briefing for the Montana PSC hearing is complete, and a decision is anticipated between mid-October and mid-November 2026. Management expressed cautious optimism and is actively engaged in integration planning to ensure a smooth transition and realize cost savings for customers post-approval.

Data Center Development

NorthWestern Energy continues to pursue data center opportunities in Montana and South Dakota. While development agreements are in place, the SEBI project faces delays due to land procurement issues, pushing its expected Energy Service Agreement (ESA) beyond year-end. Quantica and Atlas ESAs are still targeted by year-end. The company has filed a Large New Load tariff in Montana to protect existing customers and is addressing sales tax issues in South Dakota to facilitate large-load growth.

Colstrip Ownership and Cost Recovery

The incremental full-serve ownership of Colstrip assets impacted Q2 GAAP EPS by $0.12 and resulted in $0.05 of unrecovered operating expenses on an adjusted basis. Management's action plan involves filing a future rate review to incorporate these assets into base rates for better cost recovery, while a PCCAM tariff waiver docket is expected to conclude in Q4 2026 or early 2027.

Capital Plan and Growth Opportunities

The $3.2 billion capital plan for 2026-2030 remains unchanged, focusing on essential investments. This plan does not yet incorporate potential incremental investments from regional transmission growth or large-load opportunities, which the company is actively pursuing. These additional opportunities could drive EPS growth above the current 6% long-term target.

Industry Challenges and Community Engagement

The utility industry, including NorthWestern Energy, faces increasing public pushback and misinformation regarding large-scale projects like data centers. Management acknowledges the need for better communication and collaboration with communities to demonstrate the benefits of such developments and ensure that large loads pay their own way, avoiding higher costs for existing customers.

Q2 Financial Performance

The company reported GAAP diluted EPS of $0.40 and non-GAAP diluted EPS of $0.50 for Q2 FY26. The adjusted results reflect improved margins from new rates in Montana and growth in transmission revenues, partially offset by higher operating costs, depreciation, and interest expense. Weather impact for Q2 was minimal at an unfavorable $0.01 per share, a contrast to the significant weather adjustment in Q1.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.