NorthWestern's Year-Over-Year Profit Reverses After Colstrip Costs

The Tip Desk · November 11, 2026 · 3 min read

Third-quarter net income fell to $30.7 million, or $0.50 a share, as the utility absorbed extra Colstrip ownership and still affirmed 2026 guidance of $3.68 to $3.83 a share.

NorthWestern Energy Group, Inc. (NWE), the Montana and South Dakota electric and gas utility, reported third-quarter 2026 net income of $30.7 million, or $0.50 a diluted share, down from $38.2 million, or $0.62 a share, a year earlier.

The year-over-year result reversed the second quarter, when GAAP diluted earnings of $0.40 a share had exceeded $0.35 a year earlier. Adjusted diluted non-GAAP earnings were $0.58 a share, compared with $0.79 a year earlier; non-GAAP net income was $35.6 million.

The company said the decline was primarily due to $6.1 million of net loss associated with additional ownership interests in Colstrip Units 3 and 4, depreciation expense, and interest expense, offset in part by lower non-recoverable Montana electric supply costs, retail volumes, transmission revenue, and lower merger-related costs.

Total revenues rose to $423.8 million from $387.0 million a year earlier. Electric revenue was $373.6 million and gas revenue $50.1 million. Consolidated gross margin fell to $114.1 million from $127.0 million, a $12.9 million, or 10.2 percent, decrease that the company attributed primarily to negative margin from the additional Colstrip ownership and depreciation, partly offset by lower non-recoverable Montana electric supply costs, retail volumes, and transmission revenue.

Utility margin, a non-GAAP measure that adds back operating and maintenance, property and other taxes, and depreciation, increased to $316.5 million from $300.0 million. Electric utility margin was $277.4 million and natural gas utility margin $39.1 million. The company said electric retail volumes were impacted by favorable weather and customer growth in all jurisdictions. Natural gas retail volumes were impacted by favorable weather in Montana and customer growth, partly offset by unfavorable weather in South Dakota and Nebraska.

Operating and maintenance expense rose to $84.9 million from $64.1 million. Administrative and general expense fell to $39.5 million from $46.7 million. Fuel, purchased supply and direct transmission expense increased to $107.3 million from $86.9 million. Depreciation and depletion rose to $67.0 million from $62.8 million. Operating income declined to $74.6 million from $80.3 million, and interest expense, net, rose to $42.2 million from $38.4 million.

On January 1, 2026, NorthWestern completed acquisitions of Avista’s and Puget’s interests in Colstrip Units 3 and 4 for $0, taking responsibility for associated operating costs that it will not collect through utility base rates until a future Montana rate review. The Avista interests add 222 megawatts; the Puget interests add 370 megawatts and raise NorthWestern’s ownership share of the facility to 55 percent.

In January 2026, the Montana Public Service Commission approved a temporary PCCAM tariff waiver on an interim basis that could offset a portion of approximately $18.0 million in annual incremental operating and maintenance costs associated with the Avista interests. During the three and nine months ended September 30, 2026, power prices on the designated contracts were insufficient to contribute to recovery of those costs. For the Puget interests, the company signed a contract in October 2025 to sell dispatchable capacity and energy beginning January 1, 2026, through late 2027, with revenues expected to largely offset an estimated $30.0 million of annual incremental operating and maintenance costs.

Merger-related costs were $3.2 million in the three months ended September 30, 2026. The company said it anticipates completing its all-stock merger of equals with Black Hills Corporation, to be renamed Bright Horizon Energy Corporation, by year-end 2026, subject to closing conditions. The Montana Public Service Commission is expected to consider the merger prior to November 12, 2026.

NorthWestern affirmed 2026 non-GAAP earnings guidance of $3.68 to $3.83 per diluted share, the record $683 million capital plan for 2026, and 4% to 6% long-term EPS and rate base growth, unchanged from the prior two quarters. The board declared a quarterly dividend of $0.67 a share, payable December 1, 2026.