NorthWestern Receives Favorable Arbitration Decision Related to
Dispute with Colstrip Energy Limited Partnership
Sioux Falls, S.D., Nov. 9, 2012 /PRNewswire/ -- NorthWestern
Corporation d/b/a NorthWestern Energy (NYSE: NWE) today announced
that it received a favorable arbitration decision related to a
dispute over energy and capacity rates with the Colstrip Energy
Limited Partnership ("CELP").
The dispute related to certain inputs used in setting long-term
rates for the period July 1, 2003,
through June 30, 2006. CELP is a
Qualifying Facility (QF) with which we have a power purchase
agreement through June 2024. Under
the terms of the power purchase agreement (PPA) with CELP, energy
and capacity rates were fixed through June
30, 2004 and beginning July 1,
2004 through the end of the contract, energy and capacity
rates are to be determined each year pursuant to a formula, with
the rates to be used in that formula derived from the annual
Montana Public Service Commission QF rate review.
On November 1, 2012 an arbitration
panel issued a final award in our favor confirming that the rate
methodology used by NorthWestern for calculating the rates for the
July 1, 2006 to June 30, 2007 was consistent with the PPA and a
Final Award of Arbitrators issued October
30, 2009. Based on the clarity provided by the final
award regarding rate calculation for 2006 through the remainder of
the PPA, we are updating the calculation of our QF liability and
expect to record a pre-tax gain of approximately $49.8 million during the fourth quarter of
2012. This gain is largely due to recalculating the present
value of our future QF liability based on the final award, net of
approximately $7.3 million owed to
CELP for contract years July 1, 2006
through June 30, 2012. As a
result of reducing the liability, we also anticipate non-cash
interest expense for the full year of 2013 will be approximately
$2.3 million lower than comparable
expense in 2012.
While we estimate the after-tax impact of this decision to
increase our earnings per share (EPS) reported in accordance with
generally accepted accounting principles (GAAP) by approximately
83 cents per fully diluted share,
NorthWestern is maintaining its adjusted EPS guidance for 2012 in
the range of $2.30-$2.40 per fully
diluted share.
A reconciliation of items not factored into our 2012 earnings
guidance of $2.30 to $2.40 per fully
diluted earnings per share is as follows (net of tax). The
calculation of adjusted EPS below represents a non-GAAP measure
that may provide users of this financial information with
additional meaningful comparisons between current results and
results the Company originally contemplated in 2012
guidance. The Company believes the following
presentation is more representative to our ongoing earnings than
the estimated GAAP EPS, also represented below. Non-GAAP
financial measures should be viewed in addition to, and not as an
alternative to, the reported operating results or cash flows from
operations or any other measure of performance prepared in
accordance with GAAP. In addition, the presentation of these
measures may not be comparable to similarly titled measures other
companies use.
|
Actual
|
Actual
|
Actual
|
|
est.
low
|
est.
high
|
|
Low
|
High
|
2012
|
Q1
2012
|
Q2
2012
|
Q3
2012
|
|
Q4
2012
|
Q4
2012
|
|
2012
|
2012
|
|
|
|
|
|
|
|
|
|
|
Reported
EPS
|
$
|
0.88
|
|
$
|
0.31
|
|
$
|
(0.10)
|
|
|
$
|
1.54
|
|
$
|
1.64
|
|
|
$
|
2.63
|
|
$
|
2.73
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weather
|
0.09
|
|
0.05
|
|
(0.06)
|
|
|
|
|
|
|
|
0.08
|
|
0.08
|
|
Release of
DGGS deferral
|
(0.05)
|
|
|
|
|
|
|
|
|
|
|
|
(0.05)
|
|
(0.05)
|
|
Lost
revenue recovery related to 2010/2011
|
|
|
(0.05)
|
|
|
|
|
|
|
|
|
|
(0.05)
|
|
(0.05)
|
|
FERC ALJ
Decision (unfavorable)
|
|
|
|
|
0.12
|
|
|
|
|
|
|
|
0.12
|
|
0.12
|
|
MSTI
write-off (unfavorable)
|
|
|
|
|
0.40
|
|
|
|
|
|
|
|
0.40
|
|
0.40
|
|
CELP
Decision (favorable)
|
|
|
|
|
|
|
|
|
|
|
$
|
(0.83)
|
$
|
|
(0.83)
|
|
|
|
$(.83)
|
|
|
$(.83)
|
|
Adjusted EPS
|
$
|
0.92
|
|
$
|
0.31
|
|
$
|
0.36
|
|
|
$
|
0.71
|
|
$
|
0.81
|
|
|
$
|
2.30
|
|
$
|
2.40
|
|
About NorthWestern Energy
NorthWestern Energy is one of the largest providers of
electricity and natural gas in the Upper Midwest and Northwest,
serving approximately 668,300 customers in Montana, South
Dakota and Nebraska. More information on NorthWestern
Energy is available on the Company's Web site at
www.northwesternenergy.com.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release contains 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." These statements are based upon our current
expectations and speak only as of the date hereof. Our actual
future business and financial performance may differ materially and
adversely from those expressed in any forward-looking statements as
a result of various factors and uncertainties, including, but not
limited to:
- potential adverse federal, state, or local legislation or
regulation or adverse determinations by regulators could have a
material effect on our liquidity, results of operations and
financial condition;
- changes in availability of trade credit, creditworthiness of
counterparties, usage, commodity prices, fuel supply costs or
availability due to higher demand, shortages, weather conditions,
transportation problems or other developments, may reduce revenues
or may increase operating costs, each of which could adversely
affect our liquidity and results of operations;
- unscheduled generation outages or forced reductions in output,
maintenance or repairs, which may reduce revenues and increase cost
of sales or may require additional capital expenditures or other
increased operating costs; and
- adverse changes in general economic and competitive conditions
in the U.S. financial markets and in our service territories.
Our Annual Report on Form 10-K, recent and forthcoming
Quarterly Reports on Form 10-Q, recent Current Reports on
Form 8-K and other Securities and Exchange Commission filings
discuss some of the important risk factors that may affect our
business, results of operations and financial condition.
We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
SOURCE NorthWestern Corporation