NorthWestern Energy Reports 2025 Results, Advances Strategic Growth Initiatives
NorthWestern Energy Group, Inc., doing business as NorthWestern Energy (Nasdaq: NWE), has released its financial results for the year ended December 31, 2025, highlighting a year marked by regulatory milestones, strategic acquisitions, and major merger activity.
Full-Year 2025 Financial Performance
For the twelve months ended December 31, 2025, NorthWestern Energy reported net income of $181.1 million, or $2.94 per diluted share. This compares with net income of $224.1 million, or $3.65 per diluted share, recorded in 2024.
The year-over-year decline in GAAP earnings was primarily driven by increased operating expenses. Key factors included:
- A non-cash charge related to the regulatory disallowance of certain capital costs associated with the Yellowstone County Generating Station (YCGS)
- Higher depreciation and interest expense
- Merger-related expenses
- Montana property tax tracker collections
- Non-recoverable Montana electric supply costs
- Increased income tax expense
These pressures were partially offset by favorable rate adjustments, higher electric transmission revenues, increased natural gas transportation revenues, and growth in retail sales volumes.
On a non-GAAP basis, NorthWestern reported 2025 adjusted net income of $220.1 million, or $3.58 per diluted share, compared with adjusted net income of $208.9 million, or $3.40 per diluted share, in 2024. The improvement in adjusted results reflects underlying operational performance and rate recovery progress, excluding certain one-time and non-cash items.
Leadership Perspective on a Transformational Year
Brian Bird, President and Chief Executive Officer, characterized 2025 as a pivotal year for the utility.
“We are pleased to report on what has been an exceptionally busy and transformational year for NorthWestern,” Bird said. “Throughout 2025, we advanced several major initiatives to support safe, reliable, and affordable service for our customers across Montana, South Dakota, and Nebraska.”
A major legislative milestone in Montana came with the passage of House Bill 490, which provides additional clarity and limitations surrounding wildfire-related liability risks. The legislation is intended to reduce uncertainty for customers, communities, and investors by establishing clearer parameters for risk exposure.
In 2025, NorthWestern also completed its acquisition of Energy West, adding approximately 33,000 natural gas customers to its system. The transaction expands the company’s footprint and strengthens its natural gas distribution platform.
Additionally, the company finalized its Montana electric and natural gas rate review in December. The updated rates allow recovery of substantial infrastructure investments and incorporate the Yellowstone County Generating Station into the rate base. YCGS has been delivering value to customers since early 2025.
Bird also emphasized progress on longer-term strategic priorities, including the announced merger with Black Hills Corporation.
“We announced our merger agreement with Black Hills Corporation in August, a combination that will create a stronger, more resilient utility better positioned for the future,” he said.
The proposed merger of equals is expected to enhance scale, financial flexibility, and operational capabilities across a broader regional footprint.
NorthWestern also completed the acquisition of Avista and Puget Sound Energy’s ownership interests in the Colstrip generation facility effective January 1, 2026. The transaction strengthens resource adequacy in Montana, supports reliability, and positions the company to integrate potential large-load customers while maintaining affordability.
Fourth Quarter 2025 Results
For the fourth quarter ended December 31, 2025, NorthWestern reported net income of $44.7 million, or $0.72 per diluted share, compared with $80.6 million, or $1.31 per diluted share, in the fourth quarter of 2024.
The decline was largely attributable to:
- The non-cash regulatory disallowance tied to YCGS capital costs
- Higher depreciation and interest expense
- Merger-related expenses
- Montana property tax tracker collections
These headwinds were partially offset by higher rates and increased electric transmission revenue.
Adjusted non-GAAP diluted earnings per share for the quarter were $1.17, compared with $1.13 in the prior-year quarter, reflecting solid underlying operational performance when excluding certain non-recurring items.
Merger with Black Hills Corporation
On August 18, 2025, NorthWestern entered into a definitive merger agreement with Black Hills Corporation and a wholly owned subsidiary of Black Hills. The transaction is structured as an all-stock merger of equals.
The combined company will operate under the newly selected name Bright Horizon Energy.
Regulatory approval applications have been filed with:
- The Montana Public Service Commission (MPSC)
- The Nebraska Public Service Commission (NPSC)
- The South Dakota Public Utilities Commission (SDPUC)
- The Federal Energy Regulatory Commission (FERC)
Hearings before the MPSC, NPSC, and SDPUC are scheduled for the second quarter of 2026.
In February 2026, the U.S. Securities and Exchange Commission declared effective the Form S-4 registration statement containing the joint proxy statement/prospectus. Shareholder meetings for both companies are scheduled for April 2, 2026, to vote on the proposed transaction.
NorthWestern expects to submit its Hart-Scott-Rodino Antitrust Improvements Act filing in the first quarter of 2026. The merger is anticipated to close in the second half of 2026, subject to regulatory approvals and customary closing conditions.
During 2025, the company incurred approximately $9.3 million in merger-related costs, recorded within administrative and general expenses.
2026 Guidance and Long-Term Growth Outlook
NorthWestern has initiated 2026 non-GAAP earnings guidance in the range of $3.68 to $3.83 per diluted share.
Key assumptions underlying the guidance include:
- Normal weather conditions across service territories
- Exclusion of costs related to the pending Black Hills merger
- Approval of the Power Cost and Credit Adjustment Mechanism (PCCAM) waiver
- Power prices sufficient to recover operating expenses associated with incremental Avista and Puget Colstrip interests
- An effective income tax rate between 14% and 18%
- Approximately 61.7 million diluted average shares outstanding
The company reaffirmed its long-term diluted earnings per share growth target of 4% to 6%, based on its 2024 adjusted non-GAAP EPS baseline of $3.40.
Capital Investment Plan
NorthWestern also announced a five-year capital investment plan totaling $3.2 billion for 2026–2030. The plan is expected to drive rate base growth of 4% to 6% from the 2024 base level of approximately $5.4 billion.
The capital program includes investments in:
- Generation resources
- Transmission and distribution infrastructure
- System reliability improvements
- Customer growth and grid modernization
Funding is expected to come from a combination of operating cash flows, credit facilities, debt issuances, and future rate adjustments. To support planned generation investments in South Dakota, the company anticipates beginning equity issuances in 2027.
Positioning for the Future
As NorthWestern moves into 2026, the company is balancing near-term financial discipline with long-term strategic growth. Through infrastructure investment, regulatory engagement, acquisition activity, and the proposed merger with Black Hills, the utility is positioning itself for expanded scale and operational resilience.
Management reiterated its commitment to delivering safe, reliable, and affordable energy to customers while generating sustainable value for shareholders.
With legislative clarity in Montana, expanded natural gas operations, strengthened generation assets, and a transformative merger underway, 2025 represents a defining chapter in NorthWestern Energy’s evolution toward becoming Bright Horizon Energy.
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