Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Environmental Stewardship
• Safety
• Resource Management
• Human Resources

Environmental Achievements

• Increased renewable energy generation
• Reduced CO2 emissions intensity

Social Achievements

• Improved employee safety metrics
• Increased beneficial use of coal combustion products

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Increased carbon-free owned generation from 3,135,832 MWh in 2018 to 5,545,259 MWh in 2022
• Increased zero-GHG emissions energy from 40.8% in 2018 to 55.3% in 2022 (Owned & Purchased Power Portfolio)
• Reduced Scope 1 CO2e emissions from 2,801,356 metric tons in 2018 to 2,822,803 metric tons in 2022 (Note: Fluctuation observed)

Social Achievements

• Improved overall customer satisfaction scores from 710.7 in 2018 to 729.4 in 2022 (JD Power)
• Increased community giving from $5,427,180 in 2018 to $5,880,313 in 2022
• Reduced Lost Time Incident Rate from 0.71 in 2018 to 0.59 in 2022

Governance Achievements

• Maintained a high Board meeting attendance rate (93.8% - 100%)
• Implemented robust stock ownership guidelines for executive officers and directors
• No use of employment or golden parachute agreements

Climate Goals & Targets

Environmental Challenges

• Fluctuation in Scope 1 CO2e emissions
• Maintaining reliable service while transitioning to cleaner energy sources
• Managing customer disconnections for non-payment

Mitigation Strategies

• Investing in renewable energy sources (wind, solar, hydro)
• Implementing energy efficiency programs
• Improving customer service and communication

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Environmental Stewardship
• Carbon Reduction
• Renewable Energy
• Energy Efficiency
• Fisheries and Wildlife Protection
• Water Quality
• Cultural Resource Management
• Hazardous Waste Management
• Air Quality

Environmental Achievements

• Reduced carbon intensity of energy generation in Montana by more than 50% over the last decade.
• Montana electric portfolio is 60% carbon free.
• Invested more than $1 billion in clean energy projects (hydro, wind, solar) in the last five years.
• Replaced 43,000 company-owned streetlights in Montana with energy-efficient LED lights (by 2022).
• Recycled all old high-pressure sodium streetlights.
• Provided $1.06 million to support 33 fisheries, wildlife, and habitat improvement projects.
• Restored 74,629 linear feet of creek channel and created 700 acres of wetlands at O’Dell Creek.
• Installed a new solar-powered remote water quality monitoring station on the Clark Fork River.

Social Achievements

• Partnered with Missoula County Public Schools to install solar panels at four high schools.
• Supported public recreation opportunities along the Missouri and Madison rivers.
• Participated in the Missouri-Madison River Fund, contributing $370,000 for 14 public recreation improvement projects.
• Contributed another $450,000 to state, federal, and local agencies for operation and maintenance at recreation sites.
• Supported training and continuing education for renewable energy installers.
• Helped foster the growth of private-generation customers in Montana from 700 in 2010 to almost 3,000 in 2019.

Governance Achievements

• Developed and executed an Integrated Vegetation Management (IVM) plan.
• Implemented a pilot aerial tree trimming project using a helicopter.
• Developed a Remedial Investigation Work Plan (RIWP) to address manufactured gas plant impacts.
• Routinely tests equipment for PCBs and replaces or refurbishes equipment if necessary.
• Developed a Waste Management Plan to manage hazardous and non-hazardous waste streams.
• Complied with Section 106 of the National Historic Preservation Act for transmission line rebuild.

Climate Goals & Targets

Environmental Challenges

• Maintaining water temperatures below 80 degrees F in the lower Madison River during hot weather.
• Addressing environmental impacts associated with former manufactured gas plants.
• Managing the risks of power line interactions with birds (e.g., ospreys).
• Spruce budworm damage to trees near power lines.
• Aging infrastructure of transmission lines.

Mitigation Strategies

• Developed the Madison Thermal Decision Support System (DSS) to manage pulse flows from Madison Dam.
• Working with DEQ to develop a RIWP for MGP sites.
• Installed hundreds of platforms to provide safe nesting sites for ospreys.
• Implemented aerial tree trimming using a helicopter.
• Rebuilding sections of aging transmission lines while complying with environmental regulations and historic preservation acts.

Supply Chain Management

Climate-Related Risks & Opportunities

Awards & Recognition

• Restoration Project of the Year-2018 (O’Dell Creek restoration)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Environmental Stewardship
• Human Rights
• Supply Chain Sustainability
• Workforce Diversity and Inclusion

Environmental Achievements

• Reduced carbon intensity of energy generation in Montana by more than 50% over the last decade
• Invested more than $1 billion in clean energy projects (hydro, wind, solar) in the last five years
• Approximately 55% of retail energy needs originated from carbon-free resources in 2022

Social Achievements

• Maintained a robust job-specific and broad-based safety training program
• Offered a variety of training and development opportunities for employees
• Implemented policies to promote economic inclusion when selecting suppliers

Governance Achievements

• Moody’s Investor Services rated NorthWestern’s corporate governance practices fifth best among all publicly traded energy and utility companies in North America
• Established a dedicated Environment, Corporate Social Responsibility, Health and Safety, or Sustainability board committee

Climate Goals & Targets

Environmental Challenges

• Legal challenges to the air quality permit for the Yellowstone County Generating Station

Mitigation Strategies

• Permit vacature was stayed and construction was reinitiated

Supply Chain Management

Supplier Audits: 0%

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Opportunities

• Investment in carbon-free hydroelectric and wind facilities

Environmental Metrics

ESG Focus Areas

• Reliability
• Affordability
• Sustainability
• Safety
• Employee engagement
• Financial strength
• Community engagement
• Environmental stewardship
• Corporate governance

Environmental Achievements

• Reached 55 percent carbon-free electric generation in 2023 (compared to the U.S. average of approximately 40 percent)
• Reduced methane and carbon emissions from natural gas system better than industry average
• Spent nearly $60 million on fisheries and wildlife projects under the Missouri-Madison PM&E Program
• Active avian protection program including nesting platforms and avian-safe power poles
• Commitment to reach net-zero emissions by 2050

Social Achievements

• Named to Newsweek’s 2023 list of most responsible companies
• Named to Newsweek’s 2023 list of America’s Greatest Workplaces
• Named to Newsweek’s 2024 list of America’s Greatest Workplaces for Diversity
• Four NorthWestern Energy hydro facilities recertified as “Star” worksites through OSHA’s Voluntary Protection Program
• Generated more than $3 billion in total economic impact across service area in 2023
• Nearly $2 million in donations, sponsorships, scholarships, and economic development in 2023
• Competitive pay and benefits for employees
• Strong safety culture with low safety incidents in 2023

Governance Achievements

• Excellent corporate governance practices recognized by Newsweek
• Board diversity of 40% female and two ethnically diverse members (20%)
• Favorable outcomes of 2023 regulatory rate reviews in Montana and South Dakota

Climate Goals & Targets

Environmental Challenges

• Securing adequate energy capacity for the future, especially in Montana due to lack of organized energy market and thermal capacity retirements
• Increasing threats of weather, wildfire, and cybersecurity events
• Inflationary pressures on operating costs and interest expense
• Rising interest rates impacting utility stocks
• Wildfire mitigation in Montana
• Transition to net-zero emissions by 2050
• Supply chain constraints, high inflation for product, services, and labor costs
• Potential difficulties in physically serving parts of Montana due to generation closures and increased load
• Intermittency of renewable energy sources
• Integration of renewable technologies while maintaining reliability and affordability
• Attracting and retaining a qualified workforce
• Potential for unfavorable litigation outcomes related to zoning and environmental permits
• Opposition to fossil-fuel generation from environmental advocacy groups and investors
• Risks associated with the transition to a lower-carbon economy, including potential regulation and market shifts
• Maintaining investment-grade credit ratings
• Commodity price risk
• Extreme weather events impacting energy demand and supply
• Disruptions to fuel supply or the electric grid
• Customer growth and usage fluctuations
• Advances in distributed generation technologies
• Cyber and physical attacks, threats of terrorism
• Data security breaches
• Difficulty cost-effectively completing operations and construction projects due to inflationary pressures and supply chain disruptions
• Potential for regulatory penalties for non-compliance with reliability standards
• Federally mandated purchases of power from QFs
• Potential for adverse regulatory rulings impacting results of operations and liquidity
• Changing federal and state laws and regulations
• Extensive and changing energy and environmental laws and regulations
• Early closure of generating facilities due to environmental risks, litigation, or public policy changes
• Access to capital markets
• Increased interest rates
• Potential for private party litigation relating to GHG emissions
• Changes in tax law
• Counterparty credit risk
• Customer delinquencies and bad debts
• Poor investment performance of pension plan assets
• Liquidity needs exceeding short-term credit availability
• Risks related to the transition to a lower-carbon economy
• Potential regulation associated with climate change legislation
• Risks from shareholders and lenders shifting investments away from fossil fuels
• Obligation to include minimum annual quantity of power in Montana electric supply portfolio at agreed-upon price
• Disruptions to operations due to a pandemic or similar widespread public health concern

Mitigation Strategies

• Construction of the 175-megawatt Yellowstone County Generating Station
• Acquisition of Avista Corporation’s 15 percent ownership in Colstrip
• Investment in grid resiliency and hardening
• Distribution System Infrastructure Project (DSIP)
• South Dakota and Nebraska Advanced Metering Infrastructure (AMI) project
• Montana AMI project
• Wildfire Mitigation Plan and Montana Enhanced Wildfire Plan
• Energy efficiency programs and rebates
• Weatherization services for income-qualified customers
• Robust cost control program
• Investing in a diverse generation fleet of hydro, solar, wind, natural gas, and coal resources
• Replacing aging generation resources with newer technologies
• Replacing aging pipe infrastructure and improved leak detection in natural gas system
• Competitive pay and benefits for employees
• Strong safety culture
• Economic development team to retain jobs, promote expansion, and recruit new businesses
• Impact Analysis Grant Program
• Charitable giving
• Strengthening balance sheet
• Focusing on investing in critical infrastructure and essential service
• Bringing the Yellowstone County Generating Station online in 2024
• Participating in the Western Resource Adequacy Program (WRAP)
• Comprehensive risk management policies and procedures
• Issuing fixed-rate long-term debt
• Hedging interest rates on anticipated borrowings
• Using market purchases and sales, including forward contracts, to manage commodity price risk
• Limiting transactions to high-quality counterparties
• Requiring letters of credit or prepayment terms
• Maintaining investment-grade credit ratings
• Implementing security and control measures to prevent unauthorized access and disruption of operations
• Employee training and awareness on cybersecurity risks
• Monitoring potential risks associated with third-party service providers
• Comprehensive cybersecurity threat detection and monitoring program
• Incident Response and Disaster Recovery Plan
• Working with federal and state regulatory authorities and stakeholders to seek relief from MATS or GHG regulations

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Wildfires
• Flooding
• Drought

Transition Risks

• Regulatory changes
• Market shifts
• Increased opposition to fossil fuels
• Potential for private party litigation relating to GHG emissions
• Changes in tax law
• Decreased demand for fossil fuels

Opportunities

• Development of energy-efficient products and services
• Expansion of renewable energy sources
• Federal grants and tax incentives for GHG reducing technologies

Awards & Recognition

• Newsweek’s 2023 list of most responsible companies
• Newsweek’s 2023 list of America’s Greatest Workplaces
• Newsweek’s 2024 list of America’s Greatest Workplaces for Diversity