NorthWestern Energy reported third-quarter results on November 4 that will probably be the last numbers it ever publishes as a standalone business. GAAP earnings fell to $0.50 per diluted share from $0.62 a year earlier, and adjusted earnings fell to $0.58 from $0.79. The cause: a $6.1 million net loss tied to the additional Colstrip Units 3 and 4 ownership taken on at the start of the year, plus higher depreciation and interest expense. The company affirmed its 2026 guidance anyway, declared its $0.67 quarterly dividend, and repeated that the all-stock merger with Black Hills Corporation is expected to close by year-end, subject to one remaining approval.
That approval belongs to the Montana Public Service Commission, which is scheduled to take up the merger at a decision meeting on Tuesday, November 10, with November 12 as the last day for the commission to act. Every other approval in the queue has been received. The investment case now hinges on a written order from five commissioners in Helena — due within days.
The quarter in numbers
Net income for the quarter was $30.7 million, down from $38.2 million in the third quarter of 2025. Adjusted net income was $35.6 million, down from $48.4 million. Revenue rose 9.5% to $423.8 million from $387.0 million — a margin story, not a demand story.
Year to date, the picture is steadier than the quarter suggests. GAAP earnings for the first nine months were $1.93 per share against $2.22 in 2025, but adjusted earnings were $2.39 against $2.41 — nearly flat. The quarter’s pain is concentrated in the Colstrip drag rather than a broad deterioration of the business. Offsets included lower non-recoverable Montana electric supply costs, improved retail volumes, higher transmission revenue, and lower merger-related costs.
Colstrip: the $6.1 million drag, explained
On January 1, 2026, NorthWestern acquired the Colstrip Units 3 and 4 interests of Avista (222 megawatts) and Puget Sound Energy (370 megawatts) for $0, raising its ownership share of the coal-fired Montana plant to 55%. The price was zero because the value runs the other way: the company assumed the operating costs, which it will not collect through base rates until a future Montana rate review.
The third-quarter detriment from the two interests was $6.1 million, or $0.10 per share. Year to date it is $16.4 million, or $0.27. Note for anyone comparing adjusted to GAAP: the adjusted $0.58 excludes only $0.04 of merger-related costs and $0.05 of the Avista portion tied to designated power sales contracts. The full Colstrip impact is $0.10 for the quarter, so the adjusted number still carries half the drag — a partial look at the underlying business, not a clean one. President and CEO Brian Bird called the costs “a temporary earnings headwind” attached to a decision that “helps ensure reliable energy for our customers and support economic development in Montana.”
The two interests are being handled differently, and the difference matters. The Avista capacity was identified in NorthWestern’s 2023 Montana Integrated Resource Plan as key to resource adequacy for its Montana customers. In August 2025 the company asked the Montana commission for a temporary waiver under its Power Cost and Credit Adjustment Mechanism (PCCAM) that would let it keep net revenue from certain designated power sales contracts, up to the roughly $18 million of annual incremental operating costs the Avista interests carry. The commission approved the waiver on an interim basis in January 2026. But in the third quarter, power prices in the Pacific Northwest tied to those designated contracts were too weak to contribute to recovery of the operating expenses. The mechanism exists; the market did not cooperate.
The Puget capacity, by contrast, is capacity NorthWestern says it does not currently need for existing Montana customers. It is held in a FERC-regulated subsidiary, deliberately structured to isolate its costs from Montana retail customers. In October 2025 the company signed a contract to sell the dispatchable capacity and associated energy from the Puget interests from January 1, 2026 through late 2027, with revenues expected to largely offset the roughly $30 million of annual incremental operating costs. FERC approved cost-based rates for the subsidiary in February 2026, retroactive to January 1. Two Montana commissioners sought FERC rehearing in their individual capacity; FERC denied it by operation of law.
Guidance held, with a lean
NorthWestern affirmed 2026 adjusted earnings guidance of $3.68 to $3.83 per diluted share, and long-term targets of 4% to 6% growth in earnings and rate base, against a 2024 baseline of $3.40 adjusted EPS and a rate base of approximately $5.4 billion. On the earnings call, management added that it expects to land in the lower half of the 2026 range. The guidance assumes approval of the PCCAM waiver and power prices sufficient to recover the incremental Colstrip operating expense — the last of which the third quarter just showed is not a given.
The company also affirmed a $3.2 billion capital investment plan for 2026–2030 and a record $683 million plan for 2026. Equity issuances are expected beginning in 2027 to fund South Dakota generation investment. One caveat runs through all of it: the guidance and outlook are presented on a standalone basis, and the release says plainly that upon completion of the merger, NorthWestern’s standalone guidance “will no longer apply or be indicative of the combined company’s expected results.” If the merger closes, this guidance is history.
There are other regulatory overhangs attached to the standalone plan. The commission suspended the PCCAM’s 90/10 cost-sharing mechanism on a temporary basis, with resolution expected in the first half of 2027. And in March 2026 the company filed for a Large New Load tariff rule for loads of five megawatts or more, including data centers, backed by development agreements for 75 megawatts beginning in late 2027, growing to approximately 1,250 megawatts or more by 2030.
The other side of the deal
Black Hills reported its own third quarter on November 4, and the contrast is the point. GAAP earnings were $0.54 per share against $0.34 a year earlier; adjusted earnings were $0.57 against $0.45. Revenue rose to $466.1 million from $430.2 million. The company reaffirmed 2026 adjusted EPS guidance of $4.25 to $4.45 and expects to land in the upper half of its 4% to 6% long-term growth target. New rates and rider recovery contributed $0.15 per share in the quarter, and favorable weather $0.06.
Black Hills also disclosed the deal that will matter most to the combined company: agreements signed September 30 to serve Google’s planned data center in Cheyenne, Wyoming, through 2048, involving roughly $2.5 billion of generation and transmission investment. Management expects service to begin in late 2027, full ramp in late 2030, and approximately $150 million of net income in 2030. Its base plan already includes 600 megawatts of data center demand tied to Microsoft and Meta.
Read the two quarters together and the merger’s logic sharpens. Black Hills enters with earnings momentum, new rates in effect, and a marquee large load under contract. NorthWestern enters with a coal-plant cost drag it cannot yet recover in rates. The merger does not create either fact; it decides which balance sheet absorbs them.
The merger’s shape
Announced August 19, 2025, the transaction is an all-stock, tax-free merger of equals. Based on August 18, 2025 closing prices, the combined company carried a pro forma market capitalization of approximately $7.8 billion and an enterprise value of $15.4 billion. It will serve approximately 2.1 million customers across eight contiguous states — Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota, and Wyoming — with about 700,000 electric customers and roughly 2.9 gigawatts of owned generation. The combination roughly doubles each company’s rate base to approximately $11.4 billion — about $7.0 billion electric and $4.4 billion gas — and the companies’ combined 2025–2029 investment plans exceed $7 billion. The deal is expected to be accretive to each company’s earnings per share in the first full year after closing, and the combined company supports a long-term EPS growth target of 5% to 7%, up from the 4% to 6% each company guides to alone. Black Hills shareholders will own about 56% of the combined company and NorthWestern shareholders about 44%; each NorthWestern share converts into 0.98 shares of Black Hills stock. NorthWestern CEO Brian Bird will lead the combined company, which will be renamed Bright Horizon Energy Corporation.
The approvals queue is nearly cleared. Shareholders of both companies approved the merger in April 2026, and the Hart-Scott-Rodino waiting period expired the same month. FERC and the Nebraska Public Service Commission approved in May 2026; the South Dakota Public Utilities Commission followed in June. In Montana, the companies settled with certain key intervenors in April 2026, and the commission held a hearing in May. As I wrote in the M&A explainer, the state commissions are usually the binding constraint — they can take 12 to 18 months, extract meaningful concessions, and occasionally reject deals outright. This one has taken fifteen months, and it comes down to Helena.
Montana: the last approval, and the 370-megawatt question
On October 27, the Montana commission voted 3–2 to delay, with Commissioners Jennifer Fielder, Randy Pinocci, and Jeff Wellborn for postponement and Commissioners Annie Bukacek and Kirk Bushman voting to proceed. Fielder argued commissioners should take one final look at additional conditions first. The commission reconvenes November 10 — public comment at 11 a.m., the merger session at 2 p.m. — two days ahead of the deadline.
The condition under review is the one to watch. According to Montana press reporting on the delay, regulators are considering a requirement that the combined company dedicate 370 megawatts of Colstrip capacity to Montana ratepayers. The number is not a coincidence: 370 megawatts is exactly the Puget interest acquired in January — the capacity placed in a FERC-regulated subsidiary precisely to isolate its costs from Montana retail customers. The commission’s draft final order, filed October 23, is where the condition’s final form will appear.
The tension is structural. NorthWestern’s position: the Puget capacity is not needed for existing Montana customers, and its costs should not fall on them. The commission’s apparent position: if the merged company owns 55% of a Montana coal plant, Montana ratepayers should get the power. Both are defensible; they cannot both be fully satisfied. A separate Colstrip investigation promised in December 2025 remains open, according to the draft order, which calls Colstrip “not a merger issue” — a characterization the 370-megawatt condition would test. What matters is not only whether the commission approves, but on what terms: NorthWestern’s release conditions closing on “final, satisfactory” approval, and the explainer’s rule applies — concessions worth more than the synergies kill the economics.
The dividend calendar, and what November 17 means
The merger timetable has a cash consequence with a hard date. NorthWestern’s board declared a quarterly dividend of $0.67 per share, payable December 1 to shareholders of record on November 17 — dates moved from December 31 and December 15 under the merger agreement’s dividend coordination provisions.
If the merger closes before November 17, each NorthWestern share converts into 0.98 shares of Black Hills stock, and former NorthWestern holders on Bright Horizon’s November 17 record date will instead receive a dividend of $0.703 per Bright Horizon share, declared by Black Hills on October 28. If it closes after November 17, NorthWestern shareholders of record that day receive the $0.67 dividend payable December 1. With the Montana decision due by November 12, a closing before November 17 is plausible but not assured. The calendar makes the commission’s timetable a question of cash in hand, not just of headlines. In late October, Wells Fargo raised NorthWestern to Overweight from Equal Weight and lifted its price target to $90 from $70.
How to read it
For NorthWestern shareholders, the third quarter is a closing document, not a forecast. The numbers describe a company whose earnings are held back by a coal-plant acquisition made for resource adequacy, whose cost recovery depends on power prices and a commission decision, and whose guidance expires on closing. The useful question is no longer whether NorthWestern earns $3.68 to $3.83 this year — it probably can, toward the lower half — but whether the Montana commission’s order is one the companies can accept.
For sector investors, this is the small-cap version of the consolidation wave I have been tracking all year — NextEra and Dominion, the AES take-private, Emera and Canadian Utilities — with a different price-discovery signal. Those deals were priced on scale and growth. This one will be priced, in part, on what a state commission extracts for ratepayers at the finish line. If Montana approves on acceptable terms, Bright Horizon starts life with an $11.4 billion rate base, a Google data center to build for, and a Colstrip cost-recovery case to argue in the next rate review. If the commission rejects the deal or conditions it beyond what the economics bear, NorthWestern faces 2027 alone, carrying a coal-plant drag it has not yet recovered. Either way, the answer arrives within days — and for once, the market will not have to wait for the next earnings call to get it.