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This increase was
primarily due to higher Montana transmission loads and rates, favorable weather compared to prior
period, higher commercial demand as compared to the prior period due to the COVID-19 pandemic
related shutdowns, the prior period disallowance of supply costs, and a favorable electric qualifying
facilities (QF) liability adjustment as compared with the prior period., As a result of the project discontinuance, we recorded a $1.6 million pre-tax
charge for the write-off of preliminary construction costs., This increase was primarily due to higher Montana
transmission loads and rates, favorable weather, higher commercial demand as compared to the prior
NorthWestern Reports 2021 Financial Results
February 10, 2022
Page 6
period due to the COVID-19 pandemic related shutdowns, the prior period disallowance of supply
costs, a favorable electric QF liability adjustment as compared with the prior period, and lower
property and other taxes, partly offset by higher operating and maintenance expense, depreciation
and depletion, and Montana electric supply costs., Consolidated utility margin for items impacting net income increased $55.9 million, including:
• $25.1 million increase due to higher transmission rates and demand due to market conditions
and pricing and the recognition of approximately $4.7 million of deferred interim revenues;
• $17.1 million increase due to higher electric retail volumes driven by warmer summer weather in
both Montana and South Dakota, customer growth, and increased commercial volume as
compared to the prior year due to the COVID-19 pandemic related shutdowns, partly offset by
warmer overall winter weather in Montana and South Dakota;
• $9.4 million increase due to prior period MSPC disallowance of electric supply costs;
• $4.4 million increase due to a more favorable electric QF liability adjustment compared to the
prior period., This increase was primarily driven by higher Montana transmission loads and rates, favorable
weather, higher commercial demand as compared to the prior period due to the COVID-19 pandemic
related shutdowns, the prior period disallowance of supply costs, a favorable electric QF liability
adjustment as compared with the prior period, and lower property and other taxes, partly offset by
higher operation and maintenance expense, higher depreciation expense, and higher administrative
and general expense.