ek_01112012.htm

0000073088-12-000003.txt : 20120111 0000073088-12-000003.hdr.sgml : 20120111 20120111100624 ACCESSION NUMBER: 0000073088-12-000003 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 42 CONFORMED PERIOD OF REPORT: 20120111 ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20120111 DATE AS OF CHANGE: 20120111 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTHWESTERN CORP CENTRAL INDEX KEY: 0000073088 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 460172280 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10499 FILM NUMBER: 12521301 BUSINESS ADDRESS: STREET 1: 3010 W 69TH STREET CITY: SIOUX FALLS STATE: SD ZIP: 57108 BUSINESS PHONE: 6059782908 MAIL ADDRESS: STREET 1: 3010 W 69TH STREET CITY: SIOUX FALLS STATE: SD ZIP: 57108 FORMER COMPANY: FORMER CONFORMED NAME: NORTHWESTERN PUBLIC SERVICE CO DATE OF NAME CHANGE: 19920703 8-K 1 ek_01112012.htm 8-K_01/11/2012_TRANSMISSION PRESENTATION ek_01112012.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 11, 2012

NorthWestern Corporation

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation)		1-10499 (Commission File Number)	46-0172280 (IRS Employer Identification No.)
3010 W. 69th Street Sioux Falls, South Dakota (Address of principal executive offices)			57108 (Zip Code)
	(605) 978-2900 (Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01

Regulation FD Disclosure.

On January 11, 2012, Brian Bird, vice president, chief financial officer and treasurer; Michael Cashell, vice president – transmission; and Dan Rausch, director – investor relations and business development, of NorthWestern Corporation d/b/a NorthWestern Energy (NYSE: NWE) (the “Company”), will be making a presentation concerning the Company at the Williams Capital Research Transmission Conference in New York.

A copy of the slide presentation is being furnished pursuant to Regulation FD as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. The information in the slide presentation shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Furthermore, the slide presentation shall not be deemed to be incorporated by reference into the Company’s filings under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, except as set forth with respect thereto in any such filing.

Item 9.01

Financial Statements and Exhibits.

EXHIBIT NO.	DESCRIPTION OF DOCUMENT
99.1*	Slide presentation dated January 11, 2012

* filed herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		NORTHWESTERN CORPORATION

	By:	/s/ Timothy P. Olson
		Timothy P. Olson
		Corporate Secretary

Date: January 11, 2012

Index to Exhibits

EXHIBIT NO.	DESCRIPTION OF DOCUMENT
99.1*	Slide presentation dated January 11, 2012

* filed herewith

EX-99.1 2 ex99-1_presentation.htm EXH_99-1_PRESENTATION ex99-1_presentation.htm

Williams Capital Research Transmission Conference

January 11, 2012

Presented by:

Mike Cashell, Vice President - Transmission

Brian Bird, Vice President, CFO & Treasurer

Forward looking statements

During the course of this presentation, there will be forward-looking
statements within the meaning of the “safe harbor” provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements often address our expected future business and financial
performance, and often contain words such as “expects,” “anticipates,”
“intends,” “plans,” “believes,” “seeks,” or “will.”

The information in this presentation is based upon our current
expectations as of the date hereof unless otherwise noted. Our actual
future business and financial performance may differ materially and
adversely from our expectations expressed in any forward-looking
statements. We undertake no obligation to revise or publicly update our
forward-looking statements or this presentation for any reason. Although
our expectations and beliefs are based on reasonable assumptions, actual
results may differ materially. The factors that may affect our results are
listed in certain of our press releases and disclosed in the Company’s
public filings with the SEC.

Outline

Who we are
Financial update
Investment opportunities
Transmission development
Public policy

Geographically positioned for success

ð Our service territory covers some of the
best wind regimes in the nation

ð We have the opportunity to provide
transmission services into two different
markets (West and Midwest)

Low unemployment rates

ð A fully-regulated utility located in states
with relatively stable economies with
opportunity for system investment and
grid expansion

Note: Statistics above are as of 12/31/2010, except SD peak MW as a new summer peak was set in 2011

(1) Nebraska is a natural gas only jurisdiction

(1)

We are a fully regulated utility with a significant opportunity to fill a
needed supply gap in addition to other investment projects.

A multi-state electric & natural gas utility

The “80 / 20” rules of NorthWestern. We are approximately 80% electric / 20% natural gas

Note: Data above reflects full year 2010 results .

Outline

Who we are
Financial update
Investment opportunities
Transmission development
Public policy

ð Long-term targeted total debt to
capitalization of 50-55% with a current
capitalization of 54.9%(1)

ð Total liquidity of $210 million as of Oct 21, ’11

ð Refinanced nearly all debt in the last 2 years

– Lowered average coupon on long-term
debt by 1.2% and extended maturities

– Amended and restated revolving credit
facility extending term, increasing size
and lowering costs.

A security rating is not a recommendation to buy, sell or hold securities. Such rating may be subject to revision or withdrawal
at any time by the credit rating agency and each rating should be evaluated independently of any other rating.

A history of earnings and dividend growth

8.3% Cash From
Operations

6.6% Dividend Growth

Compounded Annual
Growth Rate (CAGR)

2005-07 valuation affected by pending and
ultimately terminated acquisition

Outline

Who we are
Financial update
Investment opportunities
Transmission development
Public policy

Investment opportunity outlook

ð Energy Supply

– Big Stone/Neal pollution control

– South Dakota natural gas peaking generation

– Montana Spion Kop Wind facility

– South Dakota Titan Wind facility buyout

– Other vertical integration opportunities in Montana

ð Transmission

– Network upgrades and large generation
interconnections

– Colstrip 500kV upgrade

– Mountain States Transmission Intertie (MSTI)

– 230kV Renewable Collector System

– South Dakota transmission opportunities

ð Distribution

Outline

Who we are
Financial update
Investment opportunities
Transmission development
Public policy

Transmission

Regional planning process

ð Coordination with other sub-
regional planning groups and
WECC

RED INDICATES EXISTING NTTG MEMBER TRANSMISSION

Intermountain region - Today

Intermountain region - Tomorrow

Some potential additional projects

ð 62 projects listed in the
WECC project portal are
proceeding through path
rating

ð Some are shown in the
graphic

WECC TEPPC 10-Year Regional Transmission Plan

ð Transmission Expansion Planning Policy Committee (TEPPC)

– Funded, in part, by a grant from the U.S. Department of Energy (DOE)

– First Interconnection-wide transmission plan

– Some key findings

• Some long-distance transmission to access remote renewable
resources appears to be cost-effective under certain conditions

• Utilization and congestion consistently high increases under a
variety of conditions for:

• Montana to Northwest path

• Pacific DC Intertie and California-Oregon Intertie

• High levels of variable generation caused unprecedented levels of
conventional generation ramping and cycling

WECC Path Rating process

ð Purpose

– Provide a formal process for rating a transmission line

– A demonstration how a project will meet the NERC Reliability Standards
and WECC Criteria

• Attain a WECC Accepted Rating

ð This means…

– The rating defines the capability or capacity of a transmission circuit or
path to transfer power reliably and in accordance with prescribed
Reliability Criteria in concert with other interacting paths, circuits or
generators

ð MSTI’s Path Rating

– Final in late September 2011 - several year process

– 1500 MW north-to-south & 1100 MW south-to-north

Federal accelerated permitting

Pilot demonstration to streamline federal permitting
and increased cooperation at federal, state and
tribal levels

WECC
Rating

ð Projects kV Miles States Process

– Boardman-Hemingway 500 AC 300 OR-ID P2

– Gateway West Project 500 AC 1,100 WY-ID P3

– Hampton-Rochester-La Crosse 345 MN-WI NA

– Cascade Crossing 500 AC 210 OR P2

– SunZia Transmission, LLC 2-500 AC 500 NM-AR P3

– Susquehanna to Roseland Line 500 145 PA-NJ NA

– Transwest Express 500 DC 725 WY-UT P2

ð The focus of program is to remove remaining significant hurdles that are
within jurisdiction of the executive branch of the Federal Government

ð Transmission planning

– Regional transmission planning expanded

– Include transmission needs driven by

public policy

– Coordination of transmission plans with

neighboring regions

– Federal right of first refusal to build

eliminated (applies to RTOs only)

ð Transmission cost allocation

onal

ð Observations

– Potential change for non-RTO regions of the western interconnection

– Informational regional plan (not a construction plan)

– Regional cost allocation is not cost recovery

– Does not replace or repeal states’ rights

FERC Order 1000

Preceded by Orders No. 888 and 890

What’s in it for customers?

ð Access to the highest quality renewable generation

– Driven by regional renewable needs and opportunity for development

ð Reduce overall regional costs to customers

ð Access to markets

ð Support public policy initiatives

ð Doing the right things for the right reasons

Montana interconnection queue status

Montana is between resources & loads

NWE proposed transmission projects

Collector System

Colstrip Upgrade

MSTI

Our transmission developments

ð Observations

– Montana major facility siting act does not easily apply to non local
load service transmission development strategy

– Transmission enables new resource to reach distant markets

– Transmission needs must be understood in the context and time
it will be needed (7-10 years in the future)

ð Currently being developed primarily by BPA and NWE with the other owners
having various levels of interest.

Avista Corporation 10% 12%

Pacificorp 7% 8%

ð Initiallly idendified in RMATs study as being a piece of "low hanging fruit"

ð No new linear facilities required

ð 600-800 MW potential

ð BPA/NWE collaboration

Colstrip 500 kV Transmission Upgrade

Garrison

Townsend

Broadview

Colstrip

MT Intertie

BPA

CTS

(Approx. 30% owner of total line)

Mountain States Transmission Intertie

ð 500 kV AC line from Townsend MT to
Midpoint Substation near Twin Falls ID

ð Approximately 430 miles depending
on final route

– 70% on State and Federal Public Lands

ð 1500 miles of alternatives

ð Advanced Stages of public siting and
Review - began in 2007

ð 1500 MW Path Rating

ð Current Project cost is approximately
$1 billion

Who pays for export transmission?

ð In NWE’s case

– The filings made at the Federal Energy Regulatory Commission (FERC)
clearly show that:

• MSTI and Collector are being primarily built to serve new generation
for export

• These documents also clearly show that those customers who directly
benefit from the line, rather than the existing retail customers of
NorthWestern Energy will pay costs

ð MSTI will be separate from the utility

– Assets are intended to be held in a separate corporation

– Debt will be non-recourse to the utility

MSTI Public Outreach - Where have we been?

ð Public participation and involvement

– NWE has always encouraged healthy and robust public debate!

ð A robust open process with all Stakeholders

– Federal and state agencies, counties, landowners and project developers

ð Public Open House Meetings

– 24 open house meetings in local communities since 2007

– The last round in January/February 2010

ð Elected Officials Briefings

– Over 100 and counting since 2007

ð Agency sponsored EIS Scoping Meetings

– 2008 - 3 meetings in MT and 3 in ID

– 2011 - 12 Agency meetings, 7 in MT and 5 in ID

– Ad hoc meetings continuing

– Future public meetings and comments after DEIS issued

ð NorthWestern Energy supports this third-party, independent
review

– Review will evaluate impacts and use a modeling process to
analyze unbiased policy data, scientific data and community
values

– The process will also assess the economic impacts of the project
to each county

– All counties throughout the MSTI project area will be invited to
participate

ð The MSTI Review Group includes: Madison County, MT; Jefferson
County, MT; Western Environmental Law Center; Headwaters
Economics; Sonoran Institute; Craighead Institute and Future West

MSTI review process

MSTI siting and permitting schedule

ð MFSA Application Filed June 2008/Accepted December 2008

ð Open Season tentatively planned for late 2012 to early 2013
depending on market readiness

ð Draft EIS Published 3rd Qtr 2012

ð Final EIS 3rd Qtr 2013

ð ROD & MT Certificate of Compliance - 4th Qtr 2013

ð Notice to Proceed - 3rd Qtr 2014

ð Start Construction 2015

ð Target Energization 2017

MSTI public vs. private land

ð Extensive review of local routing alternatives to maximize
the use of public lands

ð NWE Preferred Route

– 54% Public Land 46% Private Montana

– 73% Public Land Idaho

ð Parallel existing BPA 500 kV Route

– 63% Public Land 37% Private Montana

– 73% Public Land Idaho

ð Former Agency Preferred Alternative (Jefferson Valley Route)

– 66% Public Land 34% Private Montana

– 73% Public Land Idaho

Network Upgrades and Large Generation Interconnections

the cost of joining MISO as compared to the opportunities and

other benefits that membership may provide. Investment

opportunities are currently estimated to be between

$300-500 million. The map below is from a

September 2011 MVP Business Case Workshop

and expanded to show the overlay of

our South Dakota transmission

system relative to these

MVP projects.

Outline

Who we are
Financial update
Investment opportunities
Transmission development
Public policy

A lot of dirt between light bulbs in the West

ð Loads are sometimes a long way from generation

– The same is true for access to the highest quality renewables

– Often, the transmission necessary to deliver generation to the market
spans company, geographic and political boundaries.

ð Cost allocation is one of major issues facing transmission development

– Pancaked rates

– Regulatory reform at the federal level is behind the curve

– Local and state concerns at both ends of the transmission line

• Who pays for export transmission?

• Regulation for intermittent generation?

• Protection for retail customers

ð The independent West said no to a region wide RTO - yet elements are
being developed

– NTTG is making progress with several initiatives:

• ADI

• Dynamic Scheduling

• Changes to the scheduling period (from an hour to 30 minutes)

– The risk is sub-optimization of the grid and of new resources

Policy issues affecting transmission development

ð Lack of coordinated and comprehensive regulatory process

– Difficulty in satisfying competing federal, state and local needs

– No RTO in western U.S., unorganized markets

– Need centralized siting process for interstate transmission that serves
regional or national interests

ð State level market protection

– Mainly CA - preference to in-state renewable projects for job growth

– Restrictions placed on out of state wind even if lower cost

ð Need clarity on federal policy for ITC and PTC

– Without clarity, renewable initiatives don’t make near term financial sense

– Treasury grants expired YE 2011, wind tax credits expire YE 2012

ð Uncertainty increasing from state economic challenges, budget issues,
political change

– Potential impacts - reduction or delay of RPS standards, incentive phase
outs

ð Montana Issues

– Efforts to nullify the new HB 198 eminent domain law are ongoing
despite failure of a citizens’ referendum

QUESTIONS

Thank You