Our Clean Energy Vision and Goals

Executive Summary from our President and CEO
President and COO Brian Brid
“NorthWestern Energy begins this transition to an even cleaner energy future building on the considerable progress we have already made. Our total portfolio of electric generation is 56% carbon free, which is higher than the electric utility average of about 40%. Our natural gas system has a leak per mile rate that is better than the industry average thanks to our investments in pipe infrastructure and leak detection capabilities. We have the tremendous honor to be the stewards of this critical energy infrastructure that delivers safe and reliable energy to our region. Now is the time to raise the bar and start the transition to Net Zero 2050.”
‑Brian Bird, NorthWestern Energy President and CEO
Hexagon collage of NorthWestern Energy images

Over the past 100 years, NorthWestern Energy has maintained our commitment to provide customers with reliable and affordable electric and natural gas service while also being good stewards of the environment. We have responded to climate change, its implications and risks, by increasing our environmental sustainability efforts and our access to clean energy resources.

But more must be done.

We are committed to achieving net-zero by 2050 for Scope 1 and Scope 2 emissions.

Though we are committed to net zero on Scope 1 and 2 emissions which are more in our control, we will endeavor to work with our suppliers and customers to also help them minimize their emissions (Scope 3). For instance, much of our contracted electric supply is wind resources that have helped us achieve our 56% total portfolio carbon free position. In addition, we continue to work with our customers on energy efficiency and other projects to help them reduce their emissions.

Reaching Net Zero will require a series of incremental steps and investments in energy generation, infrastructure, technology and sustainability practices, such as the electrification of our fleet. We must also maintain our commitment to providing reliable and affordable service to our customers. The technologies needed to reach this goal sooner are not currently available in a manner that is cost‑effective for our company or our customers. Our needs require technologies and resources that are proven to be successful and cost‑effective for both generation and capacity especially for critical long‑duration service. Additionally, regulatory and policy support will be critical in the speed of our transformation. For these reasons, we believe the year 2050 is the appropriate realistic timeline for our commitment to reaching Net Zero carbon emissions.

Scope 1

  • The Environmental Protection Agency defines Scope 1 greenhouse gas emissions as those from activities in a company’s control. NorthWestern Energy’s Scope 1 emissions are primarily from owned electric generation plants, fugitive missions from our natural gas production, gathering, transmission and distribution systems and company owned transportation fleet.

Scope 2

  • The Environmental Protection Agency defines Scope 2 greenhouse gas emissions as indirect emissions from purchased  power used at facilities. NorthWestern Energy’s Scope 2 emissions are primarily from the electric and natural gas utilized to heat, cool and power our offices, warehouses and other facilities.

Scope 3

  • The Environmental Protection Agency defines Scope 3 greenhouse gas emissions as all other emissions. NorthWestern Energy’s Scope 3 greenhouse gas emissions primarily result from the (upstream) production of electric and natural gas  we purchase from third parties and the (downstream) consumption of electricity and natural gas by our customers. Emissions resulting from commercial travel and employee commuting are also included in Scope 3.

Our Electric Operations

A pie chart showing the Montana 2022 electric generation portfolio.

Our Electric Operations

Over the last 10 years, nearly all the owned electric generation we have put into service in Montana and South Dakota are carbon‑free resources. In 2014, NorthWestern Energy
bought Montana hydro facilities, adding 446 megawatts of clean generation to our portfolio. These facilities are the backbone of our generation fleet in that state. We built or bought more than 130 megawatts of wind facilities in both Montana and South Dakota. These clean resources have reduced our Scope 1 carbon emissions significantly over the last decade and reduced our need for thermal generation as a 24/7 energy source.
Contracted energy from Colstrip Energy Limited Partners (CELP), Yellowstone Energy Limited Partners (YELP) as well as a  majority of the contracted wind, hydro and solar are federally mandated Qualifying Facilities, as defined under the Public Utility Regulatory Policies Act of 1978 (PURPA).

NorthWestern does not own all the renewable energy certificates (RECs) generated by contracted resources, and periodically sells its own RECs with proceeds benefiting retail customers. Accordingly, we cannot represent that 100% of carbon-free energy in the portfolio was delivered to our customers.

We need a diverse generation portfolio

Leaf chart of electric portfolio and net electric generation

We need a diverse generation portfolio

Our customers need energy they can rely on. During periods of severe weather conditions, or simply when the wind is not blowing or the sun is not shining, our customers depend on our cost‑effective thermal assets to provide critical reliability. In our electric business, our owned and contracted supply resources are 56% clean (approximately one-third hydro‑electric generation, one‑third wind generation, and one‑third thermal generation).

Reliability requires a balanced mix of resources

Three gears labeled reliability, affordability and sustainability

Reliability requires a balanced mix of resources

We are proud of our diverse generation fleet of hydro, wind, natural gas and coal resources. Each has a role to play in serving our customers. Over time we will close our coal plants at the earlier of depreciable life or when the plant is no longer cost effective. Until longer duration carbon free resources are available and cost effective, we are likely going to need natural gas fired generation to supplant the output and
capacity provided by our coal resources. The natural gas‑powered plants we are building in South Dakota (Bob Glanzer Generating Station) and in Montana (Yellowstone County Generating Station) will provide on‑demand resources to support the variability of wind and solar projects coming onto our system and help serve our customers during extended periods of peak demand.
Over time, the natural gas plants and other thermal generation on our system will be used less as new cleaner, cost‑effective resources are available. As these plants operate less, they will of course, emit less carbon. Nonetheless, we believe some of our natural gas resources will occasionally be needed beyond 2050 to meet customers’ peak energy needs. To achieve net zero, we will procure available carbon offsets. Though a balanced mix of resources is important we will continue to transition over time to additional carbon free resources. In fact, we believe by 2035 we will only procure carbon free resources going forward. That is when we believe longer duration resources will be available and cost effective.

A reliable transition path

A collage with pictures of wind turbines, a solar array, a hydro facility and a natural-gas generating plant.

A reliable transition path

We hold minority ownership in each of our coal plants and do not have the ability to dictate the ultimate retirement date of these units. At both our Colstrip plant in Montana
and our Coyote plant serving customers in South Dakota, majority owners are planning to exit the facilities earlier than the current expected useful life date. This puts us in
a difficult situation since these resources are cost‑effective ways to provide energy during critical times.
It is our hope to operate the Colstrip and Coyote coal plants through their useful lives, and then replace them, at the right time and price, with newer and proven technologies which we believe will be available in the future. We see our coal plant resources as a necessary bridge to long duration, clean resources and technologies not yet developed. We are certainly excited about the rapid development of newer nuclear technologies and advances in hydrogen, but neither is proven and cost‑effective today, nor are they expected to be in the near term. We are evaluating additional technologies
like geothermal, pumped hydro storage and long duration battery storage as well. We believe advances in technology will allow us to avoid adding any incremental carbon-emitting generating resources after 2035.

Our natural gas operations

NorthWestern Energy has 9,683 miles of gas transmission and distribution pipe. In addition, we have gas production, compression, and underground storage operations. These gas systems can be a source of leaks – either through normal operation or if damaged. We have already taken numerous actions to reduce methane and carbon emissions on our gas system.
  • We have no cast iron or bare steel pipe on our system, which historically have been associated with higher leak rates.
  • We replace aging pipe infrastructure and have improved our leak detection capabilities, resulting in better‑than‑industry average (lower) leaks per mile.
  • Through our energy efficiency efforts, we have reduced the amount of gas needed by our customers. Nonetheless, as our region grows, demand for gas grows, especially at peak.

Net zero carbon and methane emissions by 2050

Natural gas worker works in the field

Net zero carbon and methane emissions by 2050

As with our electric systems, the foundation for service to our gas customers is reliability, affordability and environmental sustainability. Our approach to Net Zero by 2050 will be primarily focused on Scope 1 emissions. To accomplish our 2050 goal, we will first take steps to reduce our methane emissions 30% by 2030 from a 2020 base. Through continued pipeline infrastructure investments, improved compression operations, improved leak detection, and other operational changes, we believe we will achieve the necessary methane reduction. We will also reduce the amount of flaring in our operations to reduce carbon emissions.
Going forward from 2030 to 2050, we will rely on new technologies and increased investments in pipe infrastructure to  ensure our pipeline system, gas production, compression, and storage operations are tight. Any remaining methane or

carbon emissions by 2050, albeit small, will be offset with carbon credits.

One carbon offset that will be considered is the production and delivery of renewable natural gas (RNG) for our customers. Whether that RNG is produced by us (Scope 1) or another party (Scope 3), it will dramatically reduce methane emissions. RNG production will be delivered into our South Dakota gas infrastructure in 2022, and we continue to evaluate ways we and others can increase the amount of RNG delivered onto our system in the future. Finally, we will monitor other cleaner fuels like hydrogen to consider as a replacement for natural gas when those resources become cost effective.

Other initiatives to reduce emissions

Electrification of fleet vehicles

We will electrify our fleet of 1,200 vehicles and equipment. In 2022, we will begin replacing vehicles and equipment at the end of their useful lives with electric  alternatives. By 2030, we intend to replace 30% of our light‑duty class vehicles (about 100 cars and light trucks), 20% of new medium and heavy‑duty vehicles, and 30% of new bucket trucks with electric vehicles. In addition, by 2030, all new forklift replacements will be electric. We drive 13 million miles each year to serve our customers, so the emission reductions of going to EVs will be substantial.

Learn more

Automated Metering Infrastructure

Another way we will help customers reduce their carbon footprint is by providing better information to allow them to manage their energy use. The roll‑out of automated metering infrastructure (AMI) is finished in South Dakota and will be completed in Montana over the next two years. AMI meters will allow our customers to access
real‑time information on their energy use and better analytics to make changes on their side of our meter to reduce their bills.

On our side of the meter, AMI helps us reduce emissions through two means:

  • First, we will be able to significantly reduce dispatch frequency and miles traveled by our fleet of trucks.
  • Secondly, AMI will help with volt/VAR optimization which will reduce emissions while providing the same power quality.

Learn more

Grid and gas infrastructure

We continue to invest in the modernization of our grid and gas infrastructure which will provide us with more information, enabling us to reduce the energy needed to serve our customers.

We are deploying small scale renewables with battery storage in some difficult‑to‑serve locations to improve reliability in cleaner ways. Initially small pilots were deployed to better understand how these resources could help improve capacity, reliability and resiliency on our grid. We are planning to roll out this design on a much larger scale to improve rural reliability and to reduce emissions.

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Energy Efficiency

NorthWestern offers efficiency programs to customers. It is a way to help our customers reduce their emissions while also reducing our downstream Scope 3 emissions. Since the late 1970s, we have performed services and offered programs to assist our Montana customers with the wise and efficient use of energy. Over the years, our Efficiency Plus (E+) programs have included energy audits and virtual home energy assessments, electric and natural gas energy efficiency rebate programs, low‑income energy assistance, and small‑scale renewable activities. We provide training and continuing education to contractors and trade allies.

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EV Infrastructure Investments

We are developing turnkey installation of new charging infrastructure along highway
corridors at commercial customers’ properties in Montana and South Dakota. In addition, we are conducting an in-depth analysis to design programs for business customers to ensure our electric infrastructure is adequate and efficient for significant EV charging growth.

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Sustainable Procurement Committee

Our employees are doing their part to reduce our carbon footprint. In 2021, we formed a Sustainable Procurement Committee, made up of employees from across our service territories, to take meaningful steps to ensure actions and operations at all of our facilities are more environmentally friendly and sustainable. The committee developed procurement and practice guidelines to be implemented in our facilities in 2022. These guidelines will continue to develop and evolve, with employee feedback and experience.

Energy Efficiency Savings

In 2020, E+ programs produced energy savings totaling 67,606 MWh and 498,267 therms for a total cost of $11.6 million.

100% Net Zero by 2050

Electric Operations

  • Carbon‑Free Resources: Continue transition to a carbon‑free portfolio
  • Natural Gas Plants: Gas plants needed to offset intermittency of renewable energy and will ultimately transition to peak load only
  • Fossil Fuel Transition: Retire coal plants the earlier of depreciable life or when no longer cost effective

 

Natural Gas Operations

  • Pipeline Modernization: Replace aging pipe and other infrastructure to minimize leaks
  • Enhanced Leak Detection: Use technology to improve leak detection and expand plant emission monitoring
  • Development of Alternative Fuels: Renewable natural gas and/or Hydrogen

 

Other Actions

  • Partner with customers on emission reductions: Enhance energy efficiency programs, expand green energy offering and develop other solutions for customers
  • Electric Vehicles: Convert fleet to electric over time and develop infrastructure to support EVs
  • Carbon Offsets: Utilize carbon offsets as necessary

 

Working together to deliver a Bright Future

We will continue to increase NorthWestern Energy’s environmental sustainability and create an even cleaner portfolio of electric and gas resources and infrastructure for our customers and communities. 100% Net Zero by 2050 is achievable for our electric and natural gas business by responsibly taking incremental steps toward this goal and maintaining our commitment to reliable, affordable, environmentally sustainable service capable of meeting the needs of all customers. Public policy support and alignment with customers is essential to achieve these goals.