NorthWestern (NWE) Q1 2026 Earnings Transcript

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DATE

Thursday, April 30, 2026 at 3:30 p.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer — Brian Bird
• Chief Financial Officer — Crystal Lail
• Director of Corporate Development and Investor Relations — Travis Meyer

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TAKEAWAYS

• GAAP Diluted EPS -- $1.03 reported, reflecting historically warm weather impacts, merger costs, and additional Colstrip ownership.
• Non-GAAP Diluted EPS -- $1.31, marking a 7.4% increase over prior year's first quarter.
• 2026 EPS Guidance -- Affirmed at $3.68 to $3.83, with long-term growth target of 4% to 6%.
• Colstrip Operating Costs -- Operating costs increased by $12 million from prior quarter due to higher Colstrip ownership, with annual run rate expected at $48 million.
• Colstrip Cost Recovery -- Only $8 million of incremental costs offset in the quarter, with recovery impeded by low market power prices.
• Margin Performance -- Margins up, supported by new Montana rates, sales from Puget Colstrip interest, and increased bulk transmission revenues; offset by negative weather impact and higher expenses.
• Weather Impact -- $0.17 EPS unfavorable weather effect, identified as the warmest winter in over a century in Montana.
• Merger Developments -- Received shareholder approval for Black Hills merger, with constructive settlements in Montana, Nebraska, and South Dakota merger dockets.
• Dividend Declaration -- $0.67 per share dividend announced, payable June 30, 2026.
• Capital Plan -- $3.2 billion capital program maintained for 2026-2030, with no new common equity issuance required for 2026.
• Equity Needs Outlook -- Incremental capital in 2027 tied to South Dakota generation will require equity issuance starting in 2027 and beyond.
• South Dakota Wildfire Legislation -- Senate Bill 36 enacted, eliminating strict liability for wildfire-related utility operations and providing significant legal protections.
• Large New Load Tariff -- Filed in March 2026 with the Montana PSC to structure and protect service to large new loads, particularly data centers.
• Data Center Agreements -- Three development agreements now signed, including with Quantica Infrastructure, which increased its contracted load from prior 500 megawatts to 1.1 gigawatts, ramping to 2031.
• Data Center Queue Status -- Queue increased from six to eight requests; four projects remain in the high-level assessment phase, no current letters of intent.
• Merger Timeline Milestones -- FERC application filed; awaiting decisions in Montana and South Dakota, with hearings scheduled for May and June 2026, and settlements already reached in all three states.
• Colstrip Ownership -- Avista portion (222 megawatts) secured for resource adequacy; Puget portion (370 megawatts) held for large load customers pending tariff approval, potential transfer to state-regulated utility.
• Dividend Yield and Growth Profile -- Currently offers a 4% dividend yield and 4% to 6% EPS growth from a $3.21 billion capital program focused on transmission, distribution, and supply.
• Potential Upside -- Additional opportunities from data centers, FERC regional transmission, and further generation investments are not included in current planning, but could lift total returns to above 10% if executed.

SUMMARY

The company confirmed it surpassed prior first quarter non-GAAP EPS by 7.4%, supported by new Montana rates and increased transmission revenue despite unfavorable weather. Shareholder approval and settlements were secured for the Black Hills merger, advancing regulatory approval across Montana, Nebraska, and South Dakota. The data center customer load pipeline expanded, highlighted by Quantica Infrastructure's agreement to ramp load to 1.1 gigawatts by 2031, and the large new load tariff was filed to manage this growth securely. Both the capital plan and 2026 earnings outlook remain unchanged, with no new equity issuance expected until at least 2027.

• Management stated, "We are delivering on our base capital plan without issuing new common equity and have no equity needs in 2026."
• Legal protections from the newly enacted South Dakota wildfire bill mirror those in Montana, reducing exposure to strict liability and aligning state risk frameworks.
• The merger is expected to elevate the EPS growth outlook post-close to 5% to 7% and double the combined rate base.
• Only $8 million of the incremental Colstrip costs were offset in the quarter, with recovery "impacted by low market power prices."
• The next rate case filing in Montana remains undetermined due to ongoing reconsideration of the 2024 case, while rate review "stay-out" provisions are now in effect in Nebraska and South Dakota under merger settlements.

INDUSTRY GLOSSARY

• EPS (Earnings Per Share): Net income allocated per outstanding share of common stock, indicating company profitability for shareholders.
• Rate Base: The value of assets on which a regulated utility is authorized by regulators to earn an approved rate of return.
• Colstrip: Reference to the Colstrip power plant, a coal-fired generation facility in Montana integral to NorthWestern Energy's resource strategy.
• FERC (Federal Energy Regulatory Commission): U.S. federal agency overseeing interstate electricity sales, wholesale electric rates, and transmission.
• MPSC (Montana Public Service Commission): The state regulatory authority for utilities in Montana.
• ESA (Energy Service Agreement): A contract specifying terms of energy supply and service for large load customers such as data centers.
• SPP (Southwest Power Pool): Regional transmission organization that coordinates power supply across multiple states, relevant in resource adequacy planning.
• IRP (Integrated Resource Plan): Long-term utility planning document analyzing resource needs and options for reliable electricity supply.
• Build-Own-Transfer: Development approach where a utility builds and owns a project for a period before transferring ownership, facilitating rapid expansion or integration of generation assets.

Full Conference Call Transcript

Travis Meyer: Thank you, Audra. Good afternoon, and thank you for joining Northwestern Energy Group Inc’s financial results webcast for the quarter ended 03/31/2026. My name is Travis Meyer, and I am the Director of Corporate Development and Investor Relations for Northwestern Energy Group Inc. Joining us on the call today are Brian Bird, president and chief executive officer, and Crystal Lail, chief financial officer. They will walk you through our financial results and provide an overall update on the great progress we have had this quarter. Northwestern Energy Group Inc’s results have been released, and the release is available on our website, Energy.com. We also released our 10-Q premarket this morning.

Please note that the company's press release, this presentation, comments by presenters, and responses to your questions may contain forward-looking statements. As such, I will direct you to the disclosures contained within our SEC filings and the Safe Harbor provisions included in the second slide of this presentation. Also note that this presentation includes non-GAAP financial measures and information regarding the pending merger transaction. Please note these non-GAAP disclosures, definitions, and reconciliations in the merger-related disclosures included in the appendix of today's presentation materials. This webcast is being recorded. The archived replay will be available shortly after the event and will remain active for one year. Please visit the financial results section on the website to access the replay.

With those details behind us, I will now turn the call over to Brian Bird for his opening remarks.

Brian Bird: Thanks, Travis. On our recent highlights for the quarter, we reported GAAP diluted EPS of $1.03 and non-GAAP diluted EPS of $1.31, affirming our 2026 earnings guidance range of $3.68 to $3.83. We are also affirming our long-term rate base and EPS growth rate targets of 4% to 6%. From our merger progress perspective, I am sure all of you have noticed that we received shareholder approval of our pending merger with Black Hills and received approval of all proposals. We have also put in place constructive settlements with each of our key intervenors in Montana, Nebraska, and South Dakota associated with the merger dockets.

From a regulatory and legislative standpoint, we have had constructive wildfire legislation passed in South Dakota, and we recently submitted a large new load tariff proposal with the MPSC. Regarding data centers, we are happy to announce we signed another development agreement, this time with Quantica Infrastructure, now for a total of three development agreements associated with data centers. Lastly, regarding the dividend, we declared a dividend of $0.67 per share payable 06/30/2026, with a June 15 record date. I will now pass it over to Crystal for our first quarter financial review.

Crystal Lail: Thank you, Brian. In my comments today, I will cover our first quarter results, our 2026 earnings outlook, and our capital plan, and then I will turn it back to Brian to give you some of the exciting updates that he mentioned as we started the call. I will begin my comments on slide seven. We delivered GAAP earnings of $1.03, which includes impacts of a historically warm first quarter, merger-related costs, and costs related to incremental Colstrip ownership. On an adjusted basis, we delivered $1.31, or a 7.4% increase off of our 2025 first quarter results.

Slide eight provides detail on the key drivers for the quarter, including improved margin, albeit net of the weather I just mentioned, offset by higher operating costs, depreciation, and interest expense. Regarding operating costs, that includes a $12 million increase from the prior quarter due to our incremental ownership of Colstrip and $4 million driven by labor and benefits. We have talked many times about the rationale for owning additional Colstrip and the importance of that facility to serving our customers in Montana. We expect the annual operating cost to be approximately $48 million related to that incremental ownership.

On a quarterly basis, you can think about that generally running about $12 million a quarter, and you will see that we have offset approximately $8 million of those here in Q1. The recovery of these costs was impacted by low market power prices, driven by overall conditions that pushed power pricing lower than our expectations. Moving to slide nine to give you more detail regarding margin, margins for the first quarter reflect new rates in Montana. You will recall the timing of our rate filing last year and not having interim rate recovery in the first quarter; you will see that increase here.

Also noted are the sales from the Puget Colstrip interest and continued growth in our transmission revenues in the bulk electric system. This was offset by weather, as Montana experienced the warmest winter in over 100 years. Moving to slide 10, that warm weather impacted us as an unfavorable $0.17 versus what we would expect as normal volumetric loads. The quarter also included $0.05 of merger costs and $0.05 of operating expenses from Colstrip that were not recovered, as I just mentioned. Those adjustments result in adjusted earnings of $1.31 for 2026 as compared with $1.22 in the prior quarter. Moving to slide 11, Brian noted that we are reaffirming our guidance for 2026.

Looking ahead to the timing of our next rate reviews, which you all typically would expect us to announce here in Q4 or in Q1, the settlement agreements related to the merger include some stay-out provisions, both in Nebraska and South Dakota. For Montana, we have not determined the timing of our next rate review as the 2024 case still remains under reconsideration. In addition, critical to our long-term earnings profile—as we have discussed—are the developments related to our development agreements with Quantica and the large new load filing, all underpinning our ability to reaffirm our guidance over 2026 and beyond. Slide 12 gives you more detail on our capital plan.

This remains unchanged from our fourth quarter call at $3.2 billion from 2026 through 2030. I will remind you that this is driven by essential investments to meet our customers' needs. It does not include incremental investments that may be driven by additional regional transmission opportunities that we are very excited about, or serving any of these large loads. It does include, however, what we adjusted for at Q4, which is incremental generating capacity in South Dakota related to the SPP expedited resource adequacy study. We are delivering on our base capital plan without issuing new common equity and have no equity needs in 2026.

As we updated you on our Q4 call, incremental capital in 2027 related to the generation capacity in South Dakota will require some equity needs in 2027 and beyond. With that, I will turn it back to Brian for the rest of the update.

Brian Bird: Thanks, Crystal. On page 14, we have good news in terms of the South Dakota wildfire bill. Senate Bill 36 was passed by the South Dakota legislature with broad bipartisan support and has been signed into law. First and foremost, no strict liability: strict liability cannot be applied to utility operations alleged to have caused wildfire-related damage. The legal protections for providers and damages, also shown on page 14, are extremely similar to what we have in our Montana legislation. As a matter of fact, if you compare this page to our Montana page, it is very similar.

We are very excited about the protection that we have in our two electric states from a wildfire perspective—some of the best wildfire protection in the United States at the state level. We plan to submit our wildfire mitigation plan for the South Dakota PUC approval in 2026, and we expect to update that plan every two years going forward.

From a merger perspective with Black Hills and stakeholders, we spent a lot of time talking to shareholders about this: the increased scale and our ability to move from a 4% to 6% EPS grower to 5% to 7%, doubling our rate base on a going-forward basis, expanding investment opportunity, having more resources—not only financial, but personnel—putting the right amount of resources at these opportunities, a stronger balance sheet, and enhanced business diversity in an expanded footprint. That combination represents a highly attractive value creation opportunity. Approximately 86% of our shareholders voted, and of those, 99.7% voted in favor of the merger. This merger will benefit many stakeholders, and certainly customers.

Any cost savings that these two companies achieve ultimately accrue back to customers in future rate reviews. We hope, as we move forward with each of the three states, that we ultimately get those approvals. On slide 16, talking about the timeline, we reached settlements in each of the three states where we filed applications for approval. We have already had a hearing in Nebraska, and we will have the hearings in Montana and South Dakota in the May and June timeframe, respectively. In addition, we filed with FERC back in December, and if you look at the 180-day approval timeline, we hope to hear back from FERC by June.

The S-4 and joint proxy resulted in shareholder approvals received not too long ago, and Hart-Scott-Rodino has been satisfied with the waiting period expiring. There are a lot of green checks on this timeline, but we are still waiting for the three states to ultimately make decisions, and we still need to have hearings in two of those states. We believe the approvals we need can be achieved in 2026. Regarding data center progress, we continue to see quite a bit of demand. We increased our data center request queue from six to eight since the last time you saw this page.

High-level assessments actually came down by one as parties evaluate deposits and costs to move forward; that high-level assessment now stands at four. We have grayed out letters of intent—when Quantica signed a development agreement, we no longer have any LOIs; we move those to the development agreement stage. Of the three in the development agreement phase, we would like to move all of those to an ESA—an energy service agreement. All three developers would like to have an ESA done by 2026. We are doing everything we can to deliver that; we are ready from a 2026 perspective, but they also need to complete certain items on their side.

On slide 18, from a regulatory front in terms of large load customers, the big news this quarter is we submitted our large new load tariff with the MPSC in March 2026. There are a lot of questions about data centers and protecting customers. Our large new load tariff is intended to protect customers and the company and provide guidelines on serving large load. We are ready to move forward if we get the large load tariff in Montana, and we are ready today with an ability to serve large load in South Dakota. We were disappointed we were not able to achieve any sales tax relief for data centers in South Dakota, but interest remains strong.

Of the three parties we are working with, Zevi has had issues procuring land necessary for their data center; they continue to work through that issue, and we are being patient. Atlas continues to move along the process necessary to get from development agreement to ESA. The big news is our development agreement with Quantica for their load, which goes from 25 megawatts ramping up to 1.1 gigawatts for a targeted start date of early 2029. As is common at this phase, a customer has not been named and will be named if we enter into an ESA.

On slide 19, regarding Colstrip, to clarify our intent with our two pieces of incremental Colstrip: we acquired the Avista portion to achieve resource adequacy at 222 megawatts. We procured the 370 megawatts from Puget to move from 30% ownership (with Avista) to 55%, to ensure we have control over Colstrip’s future. The Puget piece is currently in a FERC-regulated entity and will remain there until we have an indication on our large new load tariff. If that tariff is put in place, it is our desire to move that asset into our Montana state-regulated business.

From a standalone perspective, Northwestern Energy Group Inc offers a 4% dividend yield and 4% to 6% EPS growth based upon a $3.21 billion capital program, divided relatively evenly between transmission, distribution, and supply—executable and low-risk critical capital to our customers—supporting an 8% to 10% total return. We have incremental opportunities that could help us grow faster than 6%, but we have to deliver on those. None of these opportunities are in our current plan: there is no data center capital, no FERC regional transmission, and no incremental generating capacity beyond the South Dakota capacity already discussed. If we deliver on those, we could see total returns greater than 10%.

We believe we can execute this plan even better together with Black Hills. That concludes our presentation. We will now open the call for questions.

Operator: We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press 1 on your telephone keypad to raise your hand and join the queue. We will take our first question from Shahriar Pourreza at Wells Fargo.

Analyst: Hi, team. This is Whitney Motilama on for Shahriar Pourreza. Good afternoon, and congratulations on the quarter. In your remarks, you stated that there is a need for large loads to get things done on their end before getting to the ESA stage. Does the recent Zevi land situation reinforce the need for strict milestones around site control and permitting before Northwestern Energy Group Inc really begins to treat a project as part of its planning baseline? And then I have a follow-up.

Brian Bird: I would say this in context: initially, when we wanted to file the large new load tariff, the intent was for us to take an ESA with one of these large load customers and jointly go in and talk about the large load tariff. One of the things we want to do is ensure that we continue to work with these parties. It is going to take a while, I believe, to ultimately reach a resolution of the large new load tariff. In the meantime, we will be able to continue to work with these three developers on all the necessary things they need to do—and we need to do—to ultimately bring us to an ESA position.

Analyst: Yes, that makes sense. Moving to large load numbers, today’s update was notably stronger on the aggregate level, with demand tied to the three large load customers now scaling to 1.1 gigawatts by 2030 versus the prior 500 megawatt framing. Can you help bridge what is driving the increase from the prior outlook? I understand it is mostly Quantica, but is it better visibility on existing counterparties or a broader change in how you are underwriting the pipeline?

Brian Bird: The primary change is specifically Quantica. Previously, I think we had something in the 500 megawatt range for them; we are now at 1.1 gigawatts. So the change is primarily associated with Quantica.

Analyst: Okay. Sounds good. Thank you so much.

Brian Bird: Thank you, Whitney.

Operator: We will move next to Aidan Kelly at JPMorgan.

Aidan Charles Kelly: Hey, good afternoon. Thanks for the time today. Going back to the large load front, you have demonstrated good progress on getting your third development agreement this quarter. Ahead of ESAs, I would be curious to hear the latest resource planning assumptions for each of these projects. Could you comment on Northwestern Energy Group Inc’s ability to participate in generation opportunities? I think in the past, Brian, you mentioned build-own-transfer as an opportunity. Where are we today, and can you walk through the playbook of what utility participation looks like at this time?

Brian Bird: That is a great question. We definitely would like to participate. I have talked in the past about concerns regarding procurement rules in Montana—IRPs, RFPs, and preapproval—it is a long process, and our data center partners would like to move faster. We are looking to see if there is an ability to participate through a build-own-transfer process. They want to be served by the utility through our portfolio rather than standalone behind-the-meter resources. That is what we would like as well, but aligning our procurement timelines with their desire to move quickly is tough. We will have to work together to find a way. The Puget interests are available, if you will, for large load tariffs, which helps.

Our existing portfolio is there to serve existing customers, but the Puget 370 megawatts can help large load. Our long-term IRP does have scenarios associated with data center buildout, but that would likely be in the back half of these opportunities. We will work with each developer on resource planning to come together where we can participate, but likely on a lesser interest than some utilities whose procurement rules allow them to provide all resources. We want to participate as much as we can from a generation perspective and plan to do so within our timing constraints. There will also be a tremendous amount of transmission opportunities associated with this, and we are excited to invest alongside our development partners.

Aidan Charles Kelly: Thanks for that. One more on the regulatory front: any thoughts on the upcoming Montana commissioner elections and how this might influence your strategy in the state?

Brian Bird: In terms of our strategy, we do not tailor our approach to who may be elected. We will work with whoever is elected and do the right things for our customers in Montana. If your question is about how the races are looking, I can go there, but our filing cadence and need to recover costs do not change with elections.

Crystal Lail: Aidan, there are many factors in our filing cadence. We have been clear—being a state with elected commissions—that regardless of commissioner turnover, we need to recover our costs. We are investing significantly to serve our customers in Montana, so filings will be fairly frequent. While there is an election with two seats up this year, we will continue our cadence of needing to recover our costs under historic ratemaking. I alluded to the 2023 test period and 2024 known and measurable filing; it is 2026 April, and we still do not have a final outcome. We will need to work within that historic ratemaking context and keep filing. Elections do not change our broader recovery strategy.

Aidan Charles Kelly: Makes sense. Appreciate the insight. See you at EEI.

Operator: We will move next to Chris Ellinghaus at Seaport Williams and Shank.

Chris Ellinghaus: Hey, everybody. Good afternoon. Crystal, was that the largest weather deviation from normal you have ever had?

Crystal Lail: Funny you ask, Chris. We actually prepared for that. In 2019, we had a slightly larger deviation, and that one happened to be a colder weather event. We saw incredibly cold weather that winter. While this was not the most material single-quarter weather impact, the overall average warmth across both Q4 and Q1 was probably the most significant we have seen.

Chris Ellinghaus: Okay. Brian, you said you would discuss how the races are going. So how are they going?

Brian Bird: We have a commissioner up for election in both South Dakota and Nebraska; those primaries are relatively quiet. In Montana, Commissioner Dr. Bukacek has two Republicans running against her in the primary and an unchallenged Democrat. It is early innings. The Pinocci seat is open, and there are a couple of Democrats running for that seat and an unchallenged Democrat as well. Regardless, we are comfortable working with whoever gets elected. Primaries are coming up in the June timeframe, and the window for others to get into those races in Montana has passed. Stay tuned.

Chris Ellinghaus: Given the speed that Montana operates at, when I look at your merger approval expectations, the other states operate on a more normal timeline, but Montana is particularly slow. With hearings starting in the middle of next month, and given that orders can take many months after hearings, is there any reason you have confidence in getting approvals in Montana by the end of the year?

Brian Bird: It is a good question. We say the latter half of 2026. I am confident for two reasons. First, the important intervenors—the large customer group, the Montana Consumer Counsel, and several others—have agreed and settled. That takes a lot of issues off the table. We have two intervenors remaining with contested issues. Those settlements should help with speed. Second, there is a $10 million benefit that will accrue to customers shortly after the merger. I would expect the commission would want that benefit to get to customers as quickly as possible. Taking those into account, I would like to think this will move faster rather than slower.

Chris Ellinghaus: You talked about wanting to take an ESA with you to the commission to talk about the large load filing. Is there not enough precedent in other states—particularly in the South and some of the Midwest—for adding new resources? Is that not enough evidentiary basis for the commission, even without picking a specific customer?

Brian Bird: Two things. First, the nice thing about the utility space is we can see what our neighbors do, and we think we have taken the best of the large new load tariffs out there. We have put forward a middle-of-the-fairway proposal aligned with the industry and with strong customer protections. Second, we believed we would have an ESA some time ago. As you know, Zevi ran into land issues that we were not aware of until most recently. We thought the timing of the large new load tariff and an ESA would be about the same. There are a lot of questions about data centers and how we are going to protect customers.

We felt it was in everyone’s best interest to file the large new load tariff now. It is very similar to the protections utilities are seeking elsewhere.

Crystal Lail: And, Chris, I would add on our filing—if you read the details—we reference other states that have already found a path to prevent cost shifting and provide reasonable asset protections. Our framework does exactly that and specifically benchmarks those other tariff filings. This provides a strong basis for the commission to consider, even without a specific customer contract in front of them. Hopefully, we will have one soon. The tariff framework provides adequate protections for customers in the state while allowing for the benefits of needed system investment that a large load customer should pay for.

Chris Ellinghaus: Maybe I could rephrase. The rhetoric last year suggested that some Montana commissioners had not been following how other jurisdictions were proceeding and the protections and customer benefits provided. Do you think they are watching?

Brian Bird: I cannot speak for the commissioners. My expectation is that they and staff are following what is happening in other states. I would hope so. Our testimony provides examples of what others have done, and we are proposing similar protections that have already been accepted elsewhere.

Chris Ellinghaus: And like you said, the settlement for the merger has benefits, not just protections. You would think they would want to speed those along to customers.

Brian Bird: I would argue in all three states—Montana, and with stay-out provisions in South Dakota and Nebraska—there are protections for customers in each of those states.

Chris Ellinghaus: Right. Okay. Appreciate the color.

Brian Bird: Thank you, Chris.

Operator: We will take our next question from Paul Fremont with Ladenburg.

Paul Fremont: Thanks a lot. Congratulations on a good quarter. Starting with Quantica, over what period of time would it take for them to reach 1,100 megawatts?

Brian Bird: Good question, Paul. From a ramping perspective, starting in 2029, about two years.

Crystal Lail: Yes, our materials indicate around 2031 they would be at full ramp.

Paul Fremont: Okay, great. When I think about your 4% to 6% and the fact that no data centers are included in the current 4% to 6%, would Zevi and Atlas keep you within the 4% to 6%, or would you expect that Zevi and Atlas could put you above the 4% to 6% EPS growth?

Crystal Lail: Each deal will be specific to the needs of the customer and the investment driven by where that customer is located and their requirements. We cannot specifically quantify it until we get to an agreement with them and can clarify the impact to earnings. All else equal, it certainly pushes us upwards in the range.

Paul Fremont: Should we assume that the Avista portion of Colstrip would likely be the source of generation that would serve Zevi and Atlas?

Brian Bird: No. You should not assume that. The Avista portion got us to resource adequacy to serve existing customer needs. The Puget piece, as I described earlier, increased our ownership to 55% to ensure we have control over Colstrip’s future. That 370 megawatts is not necessary for customers today, and we did not want to burden our customers with $330 million of operating costs for an asset they do not need today. But that 370 megawatts is available to serve large load customers.

Paul Fremont: If the Puget piece serves those customers, what other spending would you see associated with Zevi and Atlas if they were to come online?

Brian Bird: From a generation perspective, you are right to focus there, but there will also be transmission and other investments necessary to support them. As Crystal pointed out, when we have an ESA, we will be able to talk more specifically.

Crystal Lail: I would also add that our large new load filing framework sets the premise that each customer would pay the current embedded rate in the large new load tariff, and then we would surcharge for any incremental investments—such as transmission or generation—specific to that customer. They would come on paying the rate set in base rate cases, which sets the floor of rates they would pay and contribute to the system. Beyond that, we would be able to surcharge based on each individual customer’s needs. Once we sign a specific ESA, we will know what that incremental investment might be.

Paul Fremont: How would you realistically serve the Quantica load if it were to ramp beyond what is available out of the Puget piece of Colstrip?

Brian Bird: In the timeframe they are targeting, our current IRP base plan did not assume data centers, but it has scenarios where data centers are included. To participate on the back end of their ramp, we may catch the back half of 2030–2031 with some generation. In our discussions with them, they will have to bring their own generation—particularly for 2029 and 2030, and likely a good portion into 2031. We would like to participate, but it will likely be on the back end. We would like the opportunity for build-own-transfer in anything they do.

Paul Fremont: My last question has to do with the large customers suggesting they wanted to see you pursue greater integration of your system with Black Hills post-merger. Can you give us an idea of the type of integration work that would make sense to better serve the customers of both systems?

Brian Bird: From a generation needs perspective to serve our customers, generation closest to our customers will likely continue to be built in our service territory. The biggest opportunity out of the blocks would be looking at Path 80 from a transmission interconnection perspective. We have also talked about the North Plains Connector and other regional transmission opportunities. Being combined with Black Hills gives us better opportunities to participate in these regional projects.

Paul Fremont: And the kV size of that line and how many miles roughly would that be in terms of construction?

Brian Bird: For North Plains Connector, we are talking about a 10% or a 300 megawatt interest. I am not sure what has been publicly stated in terms of dollar amounts for that project today. It would be a sizable investment for us. We are evaluating that, continuing to invest in the Colstrip transmission line and upgrades, assessing a Montana-to-Idaho opportunity, and Path 80—connecting Black Hills and our system. We have shared a slide associated with regional transmission in the past. We are in relatively early phases of development, and until we reach certain stages, we will stay away from sharing dollar amounts. We think those would be attractive investments.

Paul Fremont: Great. Thank you so much.

Brian Bird: Appreciate it, Paul.

Operator: That concludes our Q&A session. I will now turn the conference back over to Brian Bird for closing remarks.

Brian Bird: I appreciate the comment earlier about a great quarter. Thinking about the progress on the merger—the shareholder vote and the three settlements—I want to thank my team and the Black Hills team for great coordination to make that happen on our timetable. Great work here at Northwestern Energy Group Inc to make progress on the merger, deliver on everything we discussed this quarter, and continue to serve our customers well every day. I am really proud of our group and the great quarter we have had. Thank you very much.

Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect.

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