NorthWestern Corporation Signs Agreement For Gas Rate Hike

NorthWestern Corporation (NYSE:NWE) along with Montana Consumer Counsel and the Large Customer Group announced that they have reached an agreement regarding their request to increase natural gas delivery service and production rates in Montana. The three parties are looking forward to an approval from the Montana Public Service Commission on this newly formed agreement.

Increasing Investments for Better Service

For the sake of safety, service reliability and to comply with federal requirements, the company has made huge investments in its Montana natural-gas production, transmission and distribution system. As a leading energy delivery company in the region, since 2005, NorthWestern Energy has increased its investment by $300 million to over $742 million in recent times.

As a result of this increased investment, the company is seeking for a rate hike from the commission. If the agreement is approved, a typical residential customer using 100 therms per month will have to pay approximately 2.9% more than what they are paying now.

Peers Investment

The electricity and natural gas service providers are investing substantially for increasing safety and service reliability.

CenterPoint Energy’s (NYSE:CNP) made a capital expenditure of $298 million in the first quarter of 2017. The company will continue with its capital expenditure program of $7 billion from 2017 through 2021, including an investment of $1.5 billion in just 2017. It is currently focused on upgrading infrastructure and improving reliability.

NiSource (NYSE:NI) is also willing to invest nearly $1.6–$1.8 billion in planned utility infrastructures annually from 2018 to 2020 and has identified long-term infrastructure investments worth $30 billion. The company is also focused on clean energy. It has invested nearly $850M in Flue Gas Desulfurization (FGD) Facilities and New Environmental Controls through 2016.

Price Movement

NorthWestern Corporation has outperformed the Zacks categorized Utility- Electric Power industry, in the last six months. During this period, the company’s shares gained 11.1% as against the industry’s gain of 8.7%.

The company's focus to serve the customer and the communities with better and reliable services had resulted in continued investments. This has also boosted the performance of the company in the recent quarters.

Zacks Rank and Another Stock to Consider

NorthWestern Corporation holds a Zacks Rank #2 (Buy). A better-ranked stock in the same space is RWE AG (OTC:RWEOY) sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

RWE AG's Zacks Consensus Estimate for 2017 moved up nearly 21.4% to $2.06 per share in the last 60 days.

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