NorthWestern Energy Group Inc. has made progress with large-load customers that are looking to develop data center-related infrastructure in the utility's Midwest service territories.
The company has letters of intent with data center developer Sabey Data Centers, power system testing and commissioning company Atlas Power and hyperscaler infrastructure developer Quantica Infrastructure LLC. The potential deal with Sabey has reached the next step of a development agreement under which NorthWestern has funded impact and facility studies for the project.
"We do anticipate making a filing with the [Montana Public Service Commission] to propose a large-load tariff in the fourth quarter of 2025 and we'd like to do that in conjunction with an [energy service agreement] with Sabey," Brian Bird, NorthWestern's CEO and president, said Oct. 30 during the company's third-quarter 2025 earnings call. "So going arm in arm, making sure that we're protecting customers in essence, but also providing what we need to move forward with data centers in the state."
NorthWestern is working through legal proceedings with the Montana Public Service Commission regarding the terms about the utility's service to large-load customers in the state. Meanwhile, in South Dakota the company has seen "good progress in between legislative sessions," specifically with the introduction of a sales tax exemption bill for data centers, Bird said. He highlighted the development as encouraging for the prospects of data center development in the area.
Colstrip update
NorthWestern also highlighted an expected upcoming power purchase agreement to sell 370 MW of energy from the 1.5-GW Colstrip coal-fired power plant in Montana to a third party. That agreement would start at the end of this year and run through the third quarter of 2027, Bird said.
Northwestern expects to complete two recent acquisitions of stakes in Colstrip on Jan. 1, 2026. The utility signed deals in 2023 and 2024 to acquire Avista Corp.'s 222-MW portion of Colstrip's generation capacity and Puget Sound Energy's 370-MW share.
The transactions would bring NorthWestern's total ownership of the plant to 55%, giving it majority control over the future of Colstrip.
"Those combined interests of course will deliver substantial benefits to our existing customers, communities and investors, but also support now the integration of some large-load customers," Bird said in the call.
Executives said the company is pursuing a few paths to recover some of the operating costs at the Colstrip plant. NorthWestern has filed a temporary tariff waiver with Montana regulators to offset the $18 million in annual operating and maintenance costs associated with the Avista share. Revenues from the planned power purchase agreement are expected to largely offset the estimated $30 million of annual incremental costs from the Puget Sound interests. The company also submitted a rate approval request to the Federal Energy Regulatory Commission.
Other announcements
NorthWestern submitted a 131-MW natural gas generating facility planned in Aberdeen, South Dakota, for the Southwest Power Pool's expedited resource adequacy study in October.
The project would add $300 million in capital expenditures not reflected in NorthWestern's five-year forecast.
Executives said they have applied to the regulatory commissions in Montana, Nebraska and South Dakota for approval of the pending merger with Black Hills Corp.
Results
On Oct. 30 NorthWestern reported third-quarter 2025 adjusted net income of $48.4 million, or 79 cents per share, compared to $39.7 million, or 65 cents per share, for the same period in 2024. The S&P Capital IQ consensus estimate for the third quarter was 75 cents per share.
NorthWestern reaffirmed its 2025 earnings guidance range of $3.53 to $3.65 per diluted share, as well as its capital spending plan of $531 million for this year with a 4% to 6% long-term EPS and rate base growth rate.
The company also reaffirmed its $2.74 billion capital investment plan from 2025 through 2029.
