Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported July 29, 2026 · Beat 4 of last 7 quarters
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NorthWestern's reaffirmed capital plan and growing data center pipeline (high-level assessments doubled to eight) underscore accelerating large-load demand in Montana and South Dakota. The pending merger with Black Hills would create a larger utility better positioned to serve this load, while the need for expanded regional transmission (North Plains Connector, Path 8/18) highlights the broader grid buildout required to support AI infrastructure.
Q2 GAAP EPS was $0.40 and adjusted EPS was $0.50, up $0.10 year-over-year, driven by improved margin from new Montana rates and transmission growth, partially offset by higher costs, depreciation, and interest. Incremental Colstrip ownership added $0.12 of operating costs in the quarter, with $0.05 unrecovered. Weather was unfavorable by $0.01 versus normal. The company received merger approvals from Nebraska, South Dakota, and FERC, and completed the Montana hearing; shareholder approval was overwhelming. The data center high-level assessment pool doubled to eight customers, and management expects ESAs with two of three development agreement parties by year-end.
Management reaffirmed 2026 EPS guidance of $3.68–$3.83 and long-term rate base/EPS growth of 4%–6%. The $3.2B capital plan through 2030 remains on track and excludes incremental data center, regional transmission, and generation opportunities. On the merger, all approvals except Montana are in hand; management expects an MPSC decision in 90–120 days, i.e., mid-October to mid-November, and is cautiously optimistic. Data center momentum continues: two of three development agreement parties (Quantica and Atlas) are expected to sign ESAs by year-end, while Sabey is delayed by land procurement. Management reiterated that incremental opportunities could push growth above 6% and total returns above 10% standalone, and 5%–7% EPS growth on a combined basis with Black Hills.
“We are prepared. We would be prepared if, in fact, we do get approval from the Montana Commission to close and actually start providing the benefits of the merger to our customers and other stakeholders.”
on Merger readiness
“We all need to do a better job in terms of communicating and working with communities to find out what the communities want not necessarily what we think they want. And I think there is a lot of misinformation about data centers.”
on Data center siting and community engagement
“We need to be bigger. We need-- it is more of a competitive environment that we sit in today. Than utilities have seen in certainly their first 100 years of existence.”
on Rationale for merger
On the Quantica project, the 7.2 GW interconnection request implies upside beyond Phase 1. What is the probability of realizing the full 7 GW and any physical considerations?
Brian Bird said he would not speak for Quantica, but the company is focused on the 1.1 GW phase. Success at lower gigawatt levels is needed first, and Quantica will speak to building up to higher levels.
On Colstrip, the PCCAM tariff waiver was insufficient to recover O&M for the Avista share. What is the action plan for better cost protection?
Crystal Lail said the plan is to file a rate review to put the asset into base rates. The company is waiting on a motion for reconsideration on the 2024 rate review and expects the PCCAM docket to progress through Q4 2026 or early 2027.
Transmission import capacity is declining through 2028. Will the 300 MW North Plains Connector stake matter, or is a bigger Bright Horizons-led project needed?
Brian Bird said North Plains Connector and the Montana-to-Idaho line are necessary, and there are opportunities to expand capacity on existing Path 8 and Path 18 lines. He emphasized a lot of transmission capacity will be needed for growth in the Pacific Northwest and Montana.