NorthWestern Energy Group (NWE) risk factors, FY2025 10-K

NorthWestern Energy Group's FY2025 10-K, filed Feb 12, 2026, lists 48 risk factors in 4 groups. Against the prior year's 22: 27 new, 1 dropped, 4 substantially reworded.

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Risk factors listed
484 groups
New this year
27vs 22 last year
Dropped
1since the prior 10-K
Substantially reworded
4of those kept
Section length
16k wordsItem 1A

What the changes say

  • The company added substantial risk disclosures related to its pending merger with Black Hills and energy transition challenges.
  • Updates focus on changing EPA fossil fuel rules and natural gas system capacity constraints.

What changed since the prior 10-K

New

  • NewOperational Risks

    Liquidity and Financial Risks

  • NewRegulatory, Legislative and Legal Risks

    not recovered through regulated rates. Such changes also could affect the manner in which we conduct our business and could require us to make substantial additional capital expenditures or abandon certain projects

    Exceeding estimated environmental liabilities or failing to recover remediation and compliance costs could adversely affect results.

  • NewOperational Risks

    Weather and weather patterns, including normal seasonal and quarterly fluctuations of weather, as well as extreme weather events, could adversely affect our ability to manage our operational requirements to serve our customers, and ultimately adversely affect our results of operations and liquidity

    Seasonal weather variations and extreme events can disrupt operational requirements and increase working capital needs for supply purchases.

  • NewOperational Risks

    efficient energy storage is still in development. Other technology risks include the need for significant upfront financial investments, lengthy development timelines, and the uncertainty of integration and scalability across our entire service territory

    Fossil-fuel divestment trends and institutional investor focus on sustainable lending could increase our cost of capital or limit funding access.

  • NewRisks Related to the Merger

    an agreement with respect to a more favorable alternative transaction, or may be able to do so only by incurring potentially significant liability to Black Hills

    Termination of the Merger Agreement under certain circumstances could require NorthWestern or Black Hills to pay a $100 million termination fee.

  • NewRisks Related to the Merger

    NorthWestern is subject to risk of the Merger having adverse impact on its credit rating while the Merger is pending

    The pending Merger creates a risk of credit rating downgrades, which would increase borrowing costs and hinder refinancing.

  • NewRisks Related to the Merger

    The market prices of NorthWestern Common Stock and other securities may be subject to fluctuation while the Merger is pending

    Market prices of NorthWestern common stock and securities may fluctuate significantly while the Merger is pending.

  • NewRisks Related to the Merger

    NorthWestern is subject to contractual restrictions in the Merger Agreement that may hinder its operations while the Merger is pending. The corollary restrictions applicable to Black Hills may not prevent Black Hills from taking actions that are adverse to NorthWestern or its stockholders

    Contractual restrictions in the Merger Agreement may prevent NorthWestern from pursuing attractive business opportunities prior to completion.

  • NewRisks Related to the Merger

    NorthWestern will incur significant transaction and other costs in connection with the Merger

    NorthWestern has incurred and will incur significant transaction and integration costs associated with the Merger.

  • NewRisks Related to the Merger

    Uncertainties associated with the Merger may cause a loss of management personnel and other key employees of NorthWestern and Black Hills, which could adversely affect the future business and operations of the combined company following the Merger

    Uncertainties surrounding the Merger may cause a loss of management personnel and key employees.

  • NewRisks Related to the Merger

    The Merger may not be accretive to NorthWestern's or Black Hills' earnings and may cause dilution to the combined company's earnings per share, which may negatively affect the current or future market price of NorthWestern Common Stock or other securities

    The Merger may fail to be accretive to earnings per share and could cause dilution affecting common stock market prices.

  • NewRisks Related to the Merger

    If the Merger does not qualify as a “reorganization” within the meaning of Section 368(a) of the Code, certain NorthWestern stockholders may be required to pay substantial U.S. federal, state and/or local income taxes

    If the Merger fails to qualify as a reorganization under Section 368(a) of the Code, certain stockholders may face substantial tax liabilities.

  • NewRisks Related to the Merger

    NorthWestern and/or Black Hills may be subject to litigation challenging the Merger while it is pending, and an unfavorable judgment or ruling in any such lawsuits could prevent or delay the consummation of the Merger and/or result in substantial costs

  • NewRisks Relating to the Combined Company Following Completion of the Merger

    Failure to successfully combine the businesses of NorthWestern and Black Hills in the expected time frame or at all may adversely affect the future results of the combined company, and, consequently, the value of the Black Hills common stock to be received by the NorthWestern shareholders in the Merger

  • NewRisks Relating to the Combined Company Following Completion of the Merger

    NorthWestern stockholders will have a reduced ownership and voting interest after the Merger and will exercise less influence over management

  • NewRisks Relating to the Combined Company Following Completion of the Merger

    The market price of the combined company's Common Stock after the completion of the Merger may be affected by factors different from those that historically have affected or currently affect NorthWestern Common Stock

  • NewRisks Relating to the Combined Company Following Completion of the Merger

    The failure to integrate the businesses and operations of NorthWestern and Black Hills successfully in the expected time frame may adversely affect the combined company's future results

  • NewRisks Relating to the Combined Company Following Completion of the Merger

    Each of NorthWestern and Black Hills may have liabilities that are not known to the other party

  • NewRisks Relating to the Combined Company Following Completion of the Merger

    The combined company’s debt service obligations with respect to this indebtedness could have an adverse impact on its earnings and cash flows for as long as the indebtedness is outstanding

  • NewRisks Relating to the Combined Company Following Completion of the Merger

    There can be no assurance that the combined company will be able to repay or refinance such borrowings and obligations

  • NewRisks Relating to the Combined Company Following Completion of the Merger

    The combined company may fail to realize all of the anticipated benefits of the Merger

  • NewRisks Relating to the Combined Company Following Completion of the Merger

    The future results of the combined company following the Merger will suffer if the combined company does not effectively manage its expanded operations

  • NewRisks Relating to the Combined Company Following Completion of the Merger

    There is no guarantee that the combined company will declare and pay dividends following the Merger

  • NewRisks Relating to the Combined Company Following Completion of the Merger

    The combined company is expected to record a significant amount of goodwill as a result of the Merger, and such goodwill could become impaired in the future

  • NewRisks Relating to the Combined Company Following Completion of the Merger

    The combined company's ability to utilize NorthWestern's and/or Black Hills' historic net operating loss carryforwards and certain other tax attributes may be limited

  • NewRisks Relating to the Combined Company Following Completion of the Merger

    Future sales or issuances of Black Hills Common Stock could have a negative impact on the Black Hills Common Stock price

  • NewRisks Relating to the Combined Company Following Completion of the Merger

    Future disclosures relating to the Merger may not align with investor expectations

Dropped

  • DroppedOperational Risks

    review all energy related regulations implicating reliability and affordability, it is not yet clear what the impact will be on existing regulations or future legislation or regulations affecting GHG

Reworded

  • 85% rewrittenOperational Risks

    In addition, our natural gas system serves both retail customers and the needs of natural gas fired electric generation. The natural gas system has capacity constraints that expose us to risks to be able to deliver natural gas during periods of peak demand

    Added specific focus on natural gas system capacity constraints serving retail customers and gas-fired electric generation during peak demand.

  • 71% rewrittenRegulatory, Legislative and Legal Risks

    We are subject to extensive and changing energy, and environmental laws and regulations with which compliance may be difficult and costly

    Updated to reflect specific 2024 EPA final rules on fossil fuel assets and 2025 proposals to remove those requirements.

    Was: We are subject to extensive and changing energy, and environmental laws and regulations, including legislative, judicial, and regulatory responses to climate change, with which compliance may be difficult and costly

  • 40% rewrittenRegulatory, Legislative and Legal Risks

    Early closure of our owned and jointly owned electric generating facilities due to environmental risks, litigation or public policy changes could have a material adverse impact on our results of operations and liquidity

    Removed references to climate-related impacts from opposition text regarding fossil-fuel generation.

  • 39% rewrittenOperational Risks

    We are subject to financial risks associated with the transition to a lower carbon economy

    Retained transition risk disclosures regarding lower-carbon economy shifts without altering core financial risk points.

All 48 risk factors

Headings as the filing states them, in filing order.

Operational Risks

  1. 01Liquidity and Financial RisksNew
  2. 08Our electric and natural gas operations involve numerous activities that may result in accidents, fires, system outages and other operating risks and costs that are unique to our industry
  3. 09We maintain insurance against some, but not all, of these risks and losses. The occurrence of any of these events not fully covered by insurance could have a material adverse effect on our financial position and results of operations
  4. 10Our electric and natural gas portfolios rely significantly on market purchases. This exposure adversely affects our ability to manage our operational requirements to reliably serve our customers, while exposing us to market volatility, which ultimately could adversely affect our results of operations and liquidity
  5. 11In addition, our natural gas system serves both retail customers and the needs of natural gas fired electric generation. The natural gas system has capacity constraints that expose us to risks to be able to deliver natural gas during periods of peak demand85% rewritten
  6. 12Weather and weather patterns, including normal seasonal and quarterly fluctuations of weather, as well as extreme weather events, could adversely affect our ability to manage our operational requirements to serve our customers, and ultimately adversely affect our results of operations and liquidityNew
  7. 13Our results of operations may be impacted by disruptions to fuel supply or the electric grid that are beyond our control
  8. 14We may have difficulty cost-effectively completing certain operations activities and construction projects due to inflationary pressures or if our third-party business partners are unable to deliver ordered supplies or complete contracted services timely, including workforce shortages or macro supply chain disruptions
  9. 15Failure to attract and retain an appropriately qualified workforce could affect our operations
  10. 16We may be unable to obtain insurance coverage, and the coverage we currently have may not apply or may be insufficient to cover a significant loss
  11. 17Our plans for future expansion through the acquisition of assets, capital improvements to existing assets, generation investments, and transmission grid expansion involve substantial risks
  12. 18Access to capital markets is critical to our operations and our capital structure. Increasing interest rates could have a material negative impact on our financial condition
  13. 19We are subject to financial risks associated with the transition to a lower carbon economy39% rewritten
  14. 20efficient energy storage is still in development. Other technology risks include the need for significant upfront financial investments, lengthy development timelines, and the uncertainty of integration and scalability across our entire service territoryNew
  15. 21We must meet certain credit quality standards. If we are unable to maintain investment grade credit ratings, our liquidity, access to capital and operations could be materially adversely affected
  16. 22Changes in tax law may significantly impact our business
  17. 23We are subject to counterparty credit risk
  18. 24Poor investment performance of plan assets of our defined benefit pension and postretirement benefit plans, in addition to other factors impacting these costs, could unfavorably impact our results of operations and liquidity
  19. 25We have a holding company structure and rely on cash from our subsidiaries to pay dividends

Regulatory, Legislative and Legal Risks

  1. 02We are subject to changing federal and state laws and regulations. Congress and state legislatures may enact legislation that adversely affects our operations and financial results
  2. 03We are subject to extensive and changing energy, and environmental laws and regulations with which compliance may be difficult and costly71% rewritten
  3. 04not recovered through regulated rates. Such changes also could affect the manner in which we conduct our business and could require us to make substantial additional capital expenditures or abandon certain projectsNew
  4. 05Early closure of our owned and jointly owned electric generating facilities due to environmental risks, litigation or public policy changes could have a material adverse impact on our results of operations and liquidity40% rewritten
  5. 06Increased risks of regulatory penalties could negatively impact our business
  6. 07Federally mandated purchases of power from QFs, and integration of power generated from those projects in our system, may increase costs to our customers and decrease system reliability, limit our ability to make generation investments and adversely affect our business

Risks Related to the Merger

  1. 26an agreement with respect to a more favorable alternative transaction, or may be able to do so only by incurring potentially significant liability to Black HillsNew
  2. 27NorthWestern is subject to risk of the Merger having adverse impact on its credit rating while the Merger is pendingNew
  3. 28The market prices of NorthWestern Common Stock and other securities may be subject to fluctuation while the Merger is pendingNew
  4. 29NorthWestern is subject to contractual restrictions in the Merger Agreement that may hinder its operations while the Merger is pending. The corollary restrictions applicable to Black Hills may not prevent Black Hills from taking actions that are adverse to NorthWestern or its stockholdersNew
  5. 30NorthWestern will incur significant transaction and other costs in connection with the MergerNew
  6. 31Uncertainties associated with the Merger may cause a loss of management personnel and other key employees of NorthWestern and Black Hills, which could adversely affect the future business and operations of the combined company following the MergerNew
  7. 32The Merger may not be accretive to NorthWestern's or Black Hills' earnings and may cause dilution to the combined company's earnings per share, which may negatively affect the current or future market price of NorthWestern Common Stock or other securitiesNew
  8. 33If the Merger does not qualify as a “reorganization” within the meaning of Section 368(a) of the Code, certain NorthWestern stockholders may be required to pay substantial U.S. federal, state and/or local income taxesNew
  9. 34NorthWestern and/or Black Hills may be subject to litigation challenging the Merger while it is pending, and an unfavorable judgment or ruling in any such lawsuits could prevent or delay the consummation of the Merger and/or result in substantial costsNew

Risks Relating to the Combined Company Following Completion of the Merger

  1. 35Failure to successfully combine the businesses of NorthWestern and Black Hills in the expected time frame or at all may adversely affect the future results of the combined company, and, consequently, the value of the Black Hills common stock to be received by the NorthWestern shareholders in the MergerNew
  2. 36NorthWestern stockholders will have a reduced ownership and voting interest after the Merger and will exercise less influence over managementNew
  3. 37The market price of the combined company's Common Stock after the completion of the Merger may be affected by factors different from those that historically have affected or currently affect NorthWestern Common StockNew
  4. 38The failure to integrate the businesses and operations of NorthWestern and Black Hills successfully in the expected time frame may adversely affect the combined company's future resultsNew
  5. 39Each of NorthWestern and Black Hills may have liabilities that are not known to the other partyNew
  6. 40The combined company’s debt service obligations with respect to this indebtedness could have an adverse impact on its earnings and cash flows for as long as the indebtedness is outstandingNew
  7. 41There can be no assurance that the combined company will be able to repay or refinance such borrowings and obligationsNew
  8. 42The combined company may fail to realize all of the anticipated benefits of the MergerNew
  9. 43The future results of the combined company following the Merger will suffer if the combined company does not effectively manage its expanded operationsNew
  10. 44There is no guarantee that the combined company will declare and pay dividends following the MergerNew
  11. 45The combined company is expected to record a significant amount of goodwill as a result of the Merger, and such goodwill could become impaired in the futureNew
  12. 46The combined company's ability to utilize NorthWestern's and/or Black Hills' historic net operating loss carryforwards and certain other tax attributes may be limitedNew
  13. 47Future sales or issuances of Black Hills Common Stock could have a negative impact on the Black Hills Common Stock priceNew
  14. 48Future disclosures relating to the Merger may not align with investor expectationsNew

Other NorthWestern Energy Group 10-Ks

  • FY2024 10-K risk factors
    22 risks

    Heavy exposure to federal and state energy, environmental, and climate regulations dominating operations. Significant reliance on capital markets, weather-dependent market purchases, and third-party suppliers. Operational risks span wildfires, infrastructure constraints, and workforce shortages.

    Filed Feb 13, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.