Customer Vision Project

Transcription

1 Thompson Falls Customer Vision Project Montana Electric Service Background April 3, 2018

2 Vision, Mission and Values Our Vision Enriching lives through a safe, sustainable energy future Our Mission Working together to deliver safe, reliable and innovative energy solutions Our Values Safety Excellence Respect Value Integrity Community Environment 2

3 Legacy Statement We want to provide essential energy infrastructure and valuable services that enrich lives and empower communities and be long-term partners to our customers and communities. (August 2015, Hebgen MT) 3

4 4 Meeting complex customer expectations

5 Hierarchy of (energy supply) needs Apologies to Abraham Maslow 5

6 6 Evolving regulatory approaches

7 Montana s largest regulated infrastructure investor But small and concentrated in Montana There were 97 publicly traded regulated electric utilities back in Today there are 43. NWE is 39th by market cap (5 th smallest) among this group at the end of NorthWestern Energy is Montana s largest and most important infrastructure provider - but still a small utility and even smaller among publicly traded companies. Source: Capital IA via Morgan Stanley M&A presentation April ) List only includes publicly traded regulated companies. Reflects parent companies, not each operating company. Current data as of December 2017 based on 43 existing electric utilities listed by EEI.

8 Montana total gross & net plant in service $4 ½ billion of Montana infrastructure 8 As property, plant and equipment depreciates for regulated rate making purposes, it results in lower rates for customers but is still providing used and useful service.

9 9 MT electric-only gross & net plant in service

10 Montana five year capital forecast An ongoing commitment to Montana Planned Montana capital investment of over $1.3 billion in the next 5 years to add system capacity, increase reliability and ensure safe and modern energy infrastructure. Overwhelmingly transmission and distribution related. (Does not include expense budgets; does not include significant and needed supply investments.) 10

11 NorthWestern s Importance to Montana Critical Infrastructure Enabling Function for all other infrastructure in the state Annual Expenditures Over $240M in capital investments to maintain safety and reliability of the grid in 2017 Over $150M in property and other taxes in 2017 Over $125M in labor & benefits to MT employees in 2017 Over $60M in contractor, materials, fuel, etc. in Montana in 2017 Economic Impact Over $1.8 billion gross economic output in 2016 (Circle Analytics 2017 Economic Impact Report) Stewardship Serves over 900,000 customers in Montana Essential electric and natural gas transmission for others as well Over 565,000 meters in Montana (electric & natural gas) Employs over 1,200 in Montana 11

12 Make-up of a typical residential bill Variable Supply Costs - fuel (coal/natural gas) to produce the energy. This cost varies throughout the day largely depending on demand Residential Service Charge administrative fixed fee Property Taxes Montana Centrally Assessed Property Taxes 81.4% are fixed costs Generation (fixed costs) - production of energy for our customers in general, includes fixed cost of physical assets, maintenance, and repairs Transmission System - deliveries energy across our territory in general, includes fixed cost of physical assets, maintenance, and repairs Distribution Services - deliveries energy to homes/businesses in general, includes fixed cost of physical assets, maintenance, and repairs Providing utility service is capital intensive. Most costs do not increase or decrease based on customers volumetric usage. NWE recovers costs through spinning meters, compared to electric co-ops that rely more on recovery through higher fixed monthly charges. 12 NorthWestern Energy typical monthly Montana residential rates for 750 kwh per month as of 10/1/2017

13 Fixed costs recovered through variable charges Typical NWE Residential Electric Bill in MT 2.2 cents or 18.6% of the bill is variable supply costs Providing utility service is capital intensive. Most costs do not increase or decrease based on customers volumetric usage. 9.6 cents or 81.4% of the bill is fixed costs 13 NorthWestern Energy typical Montana residential rates as of 10/1/2017

14 NWE system statistics MT Electric Service Territory MT Natural Gas Service Territory DID YOU KNOW? Our 28,000 miles of electric wires (company wide) can circle the earth and then some. We have more poles - 528K - in our entire service territory than electric customers - 433K. If electricity costs, on a kwh basis, inflated at the same rate as the Corn Puffs cereal over the last 100 years, a typical MT residential electric bill would be about $1,675 per month vs actual of ~$91 per month. 14 MT Electric service territory is 97,500 square miles or about two-thirds of Montana. MT Natural Gas service territory is 70,500 square miles or about one-half of Montana.

15 Sustainable energy future Economic Considerations Environmental Considerations Social Considerations TODAY ENERGY TOMORROW Meeting current energy requirements at a reasonable and fair cost for today's customers while ensuring the ability to meet energy service needs for tomorrow s customers. POLICY & BUSINESS MODELS 15

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