NorthWestern Energy (NWE, Financial) has successfully negotiated settlement agreements related to its regulatory rate review for electric and natural gas services in Montana. The agreements, reached with stakeholders including the Montana Consumer Counsel, the Montana Large Customer Group, the Federal Executive Agencies, and Walmart Inc., are now awaiting approval from the Montana Public Service Commission.
Upon approval, these agreements will lead to an approximate increase of $18 million in annual natural gas base revenues and an approximate $66.4 million increase in annual electric base revenues, excluding the Yellowstone County Generating Station. Including the pending request for the Yellowstone plant, NorthWestern Energy's base revenue request totals $110.3 million. The net increase in customer electric bills is expected to be around $14.6 million, accounting for adjustments to the flow-through power cost and credit mechanism.
The settlements propose an authorized return on equity of 9.60% for natural gas operations, with a 47.8% equity component in the capital structure. For electric operations, the agreements maintain an authorized return on equity of 9.65%, consistent with current approvals, also with a 47.8% equity component.
Further settlements include an agreement with the University of Montana regarding a new Standby Tariff, which, if approved, would affect customers who primarily self-generate energy but rely on NorthWestern Energy for backup power. Additionally, an arrangement with the Northern Cheyenne Tribe has been reached concerning the transition planning for the Colstrip Plant, in light of NorthWestern Energy's impending majority ownership, underscoring a commitment to energy reliability and economic sustainability in the region.
These settlements now await the Montana Public Service Commission's consideration and approval to take effect.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 7 analysts, the average target price for NorthWestern Energy Group Inc (NWE, Financial) is $60.21 with a high estimate of $66.00 and a low estimate of $54.00. The average target implies an upside of 5.31% from the current price of $57.18. More detailed estimate data can be found on the NorthWestern Energy Group Inc (NWE) Forecast page.
Based on the consensus recommendation from 9 brokerage firms, NorthWestern Energy Group Inc's (NWE, Financial) average brokerage recommendation is currently 1.9, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for NorthWestern Energy Group Inc (NWE, Financial) in one year is $56.76, suggesting a downside of 0.73% from the current price of $57.18. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the NorthWestern Energy Group Inc (NWE) Summary page.
