NorthWestern Corporation (NASDAQ:NWE) Q4 2022 Earnings Call Transcript

But how can we do that and maintain our ethical metrics and importantly, drive affordability? Again, there’s — I would call it almost an unlimited amount of capital, if you can get the folks to get the work done. The question is, what can we do and maintain affordability to customers? How do we think about that? And then how do we think about our FFO metric? So the capital roll-forward you would see here as steady as she goes. It is indeed a CAGR. And so I would think about it in that regard as well.

Brian Bird: One thing I’d add to that, that I think the issue with Colstrip, I think people have been concerned about our capital needs as a result of procuring something for zero and an opportunity you may miss, if you will, from a generation investment perspective. One of the reasons we’re certainly comfortable, obviously, we address that issue because we’re concerned for our customers. We’re going to do this in essence to reduce risk for us on our end in terms of owning Colstrip also for our customers and keep sufficient bill headroom so we can have this high level of capital and notice that this slope is not the upward hockey-stick type slope that we’ve seen historically for our capital plans. It’s pretty relatively flat across the time period. It just demonstrates the amount of capacity investment we need to make as an organization for our growing communities.

Jamieson Ward: Got you. That’s very helpful color. And it makes a lot of sense why you opted to go to the road that you did there. It definitely seems like that was the right approach to take. Last question for me, and then I’ll pass it off to others in the queue. On FFO, prior metric target had been 14% to 15%. Now it’s greater than 14%. Just wanted to get a sense of, a, is that for a certain period of time, and then it’s back to the 14% to 15%? Is 14% just the new normal going forward? Is it dependent on whether you get things like the capital, right? Like how should we think about what moved you from the 14% to 15% down to the 14% and decided to keep it there as the new standard single level there in guidance?

Crystal Lail: Again, great attention to detail. I don’t know that I overbought changing it from 14% to 15% to just being over 14%. I would tell you that’s where we’re targeting as being — and to your point, it’s unlikely that we would target to be well above that number. So 14% to 15% is probably fair to think about that, but we continue to be focused on making sure that we’re maintaining. Moving our credit metric expect for that, we’ll acknowledge that this year pulls out a little lower FFO than we were anticipating because of the pressures we saw at year-end, again, supply costs and how that affects our debt level. But no intent of change in tone or where we’re headed between saying above 14% versus saying 14% to 15%.

Jamieson Ward: Got it. Thank you. Very helpful.

Crystal Lail: Thanks, Jamieson.

Travis Meyer: Okay. We’ll take our next call from the line of Anthony Crowdell at Mizuho. Anthony?

Anthony Crowdell: Hi. Good afternoon. Can you hear me?

Travis Meyer: We can hear you, Anthony.

Brian Bird: Hi, Anthony, we could.

Anthony Crowdell: I don’t know what’s — a box keeps popping up. A box keeps popping up to unmute multiple times, but unlike Jamieson, I’ll try to keep it brief. Just quickly, thoughts you’re acquiring Colstrip for zero, I’m just curious, does that flow into rates or?