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NorthWestern Corporation (NWE) Q3 2021 Earnings Call Transcript

By Motley Fool Transcribers – Oct 25, 2021 at 8:30PM

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NWE earnings call for the period ending September 30, 2021.

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NorthWestern Corporation (NWE -1.43%)
Q3 2021 Earnings Call
Oct 25, 2021, 3:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Crystal D. Lail -- Vice President And Chief Financial Officer

-- continue to be under recovery of electric supply costs and you see that impact reflected in $106.9 million increase overall year-to-date in electric supply -- or overall energy supply costs and you can see the breakout at the bottom between electric and natural gas. From a quarter perspective, that's about a $20 million continuing trend as we think about it year-to-date.

Slide 10, the non-GAAP earnings slide. I would point you to a couple of things here. Again, we've already talked about the impact ongoing of favorable weather and you will see for the quarter $0.05 of favorable weather that we remove that compares to $0.01 of unfavorable weather in the prior quarter. The other item I would mention here is again that mark-to-market of the QF liability adjustment there with $0.02. So when you look at the quarter of $0.68 on a diluted EPS basis adjusted to $0.65 on a non-GAAP basis compared to the prior period of $0.58 of earnings adjusted to $0.59, so that's $0.65 on a non-GAAP basis compared to $0.59, again driven by margin improvement offset by some higher operating costs.

Slide 11, I would mention that the quarter again was in line with our expectations. I'll remind you that in Q2 we narrowed in our guidance a bit. We had a wider range at the beginning here of $0.20. We narrowed that down to $0.15 and have reaffirmed our guidance for '21 at $3.43 to $3.58 per diluted share. And Q2, we also discussed that we expect proceeds of $200 million in '21 from our equity offering and that's driven by higher capital, but also remind you we had delayed equity from 2020 and in '21 are executing on that. We are on track for $450 million of capital in 2021, which is a higher number than we've been at in prior years. So with that, expect to stay consistent with our guidance for 2021 and then broadly we're close to EEI here in a couple of weeks. And with that, we're looking forward to discussing with you our plans in 2022 including both guidance, capital program and also where we will be going from an equity needs perspective.

So, Bob, back to you.

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Robert C. Rowe -- Chief Executive Officer

Crystal, it sounded like you were selling tickets to EEI. Good job. A couple of regulatory items. First concerning the Power Cost Credit Adjustment Mechanism. We had requested -- we requested approval to increase the base forecast given that the existing PCAM really is energy driven, not capacity driven. We implemented an interim of about $17 million of loss replacer [Phonetic], pardon me. Anyways, we implemented the interim subsequently. Then the consumer council filed a motion arguing that the PCAM can only be adjusted in a general rate case. We were disappointed that the Commission granted that motion to dismiss. However, we have not seen a written order. When we do see that, we will evaluate and certainly have the opportunity to request reconsideration. Our view is that under the tariff, the PCAM base may be reset outside of a rate case.

Second, concerning our decoupling mechanism. As you know, we requested that that be suspended early on in COVID as the disparate direction of the residential and C&I sectors really highlighted that the mechanism was a mismatch to its intended purpose. And the Commission voted to grant our request to suspend. We consider that a real positive. The consumer council had requested reconsideration and that was denied. So that's a very good outcome.

And then finally, I know we'll come back and talk about this. On May 19, we had filed a request for approval of three capacity resources, including our Laurel plant and we withdrew that request simply to manage the supply chain issues and we're very much going ahead with the Laurel plant. Brian will come back and talk about that.

A couple other regulatory matters really below the radar. FERC has initiated a routine audit covering the years 2018 to present. We responded to quite a few data requests. Haven't yet received a report, but that is expected within the next six months. Can't really speak to the outcome of that. And then just a couple of weeks ago WECC, Western Electricity Coordinating Council, initiated one of their audits. Brian and our Vice President for Transmission, Mike Cashell and I all participated in the kick-off with our WECC audit team. We consider those to be constructive and important processes and we're looking forward to the results there.

And now moving on to the capital plan. As Crystal mentioned, we will be updating our plans and discussing that with you at EEI. But as is reflected here, we currently have a $2.1 billion overall capital plan over the next five years, which we expect to finance with cash flows from operations, first mortgage bonds and equity issuances. Then as always financing plans are subject to change.

Two important highlights to this current plan. First of all, the plan, as depicted here, does include about $60 million for 30 to 40 megawatt flexible generating plant near Aberdeen. And we decided to discontinue our plans there as a result of significant increases in estimated construction costs and the overall supply chain challenges. We will, obviously, continue to monitor our customers' needs in South Dakota and make appropriate decisions to address those. On the other hand, these projections do not include about $275 million of anticipated investment in the 175 megawatt generation facility to be constructed near Laurel. So this overall level of capital is anticipated to result in an annualized rate base growth of 4% to 5%. And with the acceleration of the Laurel project and the discontinuation of the Aberdeen project, we anticipate -- we do anticipate providing an update at EEI coming up in just a few weeks.

And I'll now turn it over to Chief Operating Officer, Brian Bird for an update on the generation portfolio and also to report our progress on ESG matters.

Brian B. Bird -- President and Chief Operating Officer

Thanks, Bob. As Bob pointed out, obviously we withdrew our filing associated with the Laurel project, but we are certainly moving ahead with the project. In fact, we want to take advantage of the fixed price contract and protect our customers from rising costs that everyone is seeing and also to get moving as quickly as we can on the project in case unforeseen supply chain issues arise.

In addition to that the Beartooth Battery contract, since the time period to build that facility is much, much shorter than the Laurel plant, we do plan to bring that in front of the Commission as a stand-alone pre-approval filing and, in fact, we plan to file that relatively soon.

In addition to that, the Powerex contract which will actually go in effects in early 2022 will be available to provide protection to our customers coming up in the coming winter season. In regards to South Dakota, we are in construction of a 16 [Phonetic] megawatt plant and it's going relatively well. With COVID and some other supply chain issues, it has been pushed out to early '22. But we're excited about seeing that come online here relatively soon.

As we pointed out, as Bob pointed out, in terms of the Aberdeen plant, we looked at the rising costs. We did not have an opportunity to lock in prices associated to that project. We are still in the development phase and we are negotiating those prices. But it was -- we saw those prices go up. We picked the prudent [Phonetic] thing and talked with the South Dakota Commission and talked about the expected increase in the price of that project and collectively agreed with folks we discussed the matter, decided to put a hold to the project and come back at what we hope is a more reasonable pricing and then possibly with different alternatives sometime down the road.

Moving on to ESG. I guess I would say, one of the big advantages of being a member of NASDAQ is they have [Indecipherable] services, one of which is OneReport. It's a tool that we can track all of our ESG-related information. We've certainly used that tool in the first half of the year, recorded everything that we can capture today and loaded it into one report. We've now disseminated that information to those folks that rate us from an ESG perspective and we also dovetailed that into the release of our brand new web page, which is -- you will see that ESG is very, very prominent in that. We're already seeing some improvement in some of our scores and we expect to see a bit more as people continue their process of looking at our information.

And with that, I'll send it back to Bob.

Robert C. Rowe -- Chief Executive Officer

Okay. And with that we are ready for your questions.

Questions and Answers:

Travis Meyer -- Director of Corporate Finance and Investor Relations Officer

Thank you, Bob and team. [Operator Instructions] Looks like we have our first question in the queue from Ryan Greenwald of BofA. Ryan? Ryan, is your line unmuted?

Ryan Greenwald -- Bank of America Merrill Lynch -- Analyst

Hey. Can you hear me?

Travis Meyer -- Director of Corporate Finance and Investor Relations Officer

Yeah. Now we can.

Ryan Greenwald -- Bank of America Merrill Lynch -- Analyst

Awesome. Appreciate the time. Good afternoon, everyone.

Travis Meyer -- Director of Corporate Finance and Investor Relations Officer

Hey, Ryan.

Ryan Greenwald -- Bank of America Merrill Lynch -- Analyst

Can you talk a bit about latest conversations with the rating agencies following withdrawal of the pre-approval application and the PCAM order out of the Commission? I know it sounds like we're going to get some more information at EEI here. But anything preliminary you can say just in terms of potential equity needs end of '22 and the initial thoughts around timing and cadence, whether it'd be a block or another ATM?

Crystal D. Lail -- Vice President And Chief Financial Officer

Ryan, Crystal here. Thanks for the question. First, I'll take the first part of your questions. We did speak with each of the rating agencies as we made the decision to move forward with the Laurel project and the importance of that given, as Brian alluded to, having fixed price contracts on the table, being able to progress quickly and be able to execute on that from a customer perspective.

I think the ratings agencies understand the perspective of that side of it moving forward from a business side of it. We also understand the other piece of that is you're looking for us to get recovery on rates and that'll be chief of mind for us as to how we progress with the Montana Commission and work together to accomplish that. With -- your question with regard to '22, happy to talk about that at EEI and looking forward to it.

Robert C. Rowe -- Chief Executive Officer

One footnote on the ratings agencies. Just a couple of weeks ago Moody's did an excellent presentation to the Montana Commission laying the foundation for what the ratings agencies do, how they look specifically utilities and then how they evaluate NorthWestern Energy. That was really well received by the Commission. Lot of good discussion. It's the presentation. At least the video is available online. South Dakota Commission is very interested in having a similar presentation. Of course, our view is the more our regulators understand the better for all.

Ryan Greenwald -- Bank of America Merrill Lynch -- Analyst

Understood. Thank you. And then can you help quantify the magnitude of inflationary pressures you guys saw with Aberdeen before opting not to move forward with the project? Was the balance sheet a limiting factor at all or was -- were the concerns really just oriented around elevated rates with the higher costs?

Brian B. Bird -- President and Chief Operating Officer

No, I think we were seeing prices upwards of 50% higher than we originally seen and that's why based upon that news that we thought it made sense to sit down and chat and collectively made a good decision we believe. The balance sheet, certainly -- obviously we want to invest much capital as we need, but that was not the factor as to why we decided not to move forward.

Ryan Greenwald -- Bank of America Merrill Lynch -- Analyst

Understood. Thank you. And then maybe just lastly, I know you alluded earlier in terms of the fixed costs for Laurel here. But is there anything that's open in terms of that contract in terms of the $275 million that could be subject to price movement?

Brian B. Bird -- President and Chief Operating Officer

Not that I can think of, Ryan.

Ryan Greenwald -- Bank of America Merrill Lynch -- Analyst

Great. I'll leave it there. Thank you, guys. Thanks, Ryan.

Crystal D. Lail -- Vice President And Chief Financial Officer

Thank you.

Travis Meyer -- Director of Corporate Finance and Investor Relations Officer

We'll take our next call from Jamieson or as his friends call him, James Ward from Guggenheim. James?

James Ward -- Guggenheim Partners -- Analyst

You guys have tripled the mute, I think here. Can you hear me now?

Travis Meyer -- Director of Corporate Finance and Investor Relations Officer

Now, I can.

James Ward -- Guggenheim Partners -- Analyst

Perfect. I had -- I dialed star, 6, I hit the unmute button on the screen. And then another one popped up in the bottom corner.

Travis Meyer -- Director of Corporate Finance and Investor Relations Officer

It's like three-factor authentication, I guess.

James Ward -- Guggenheim Partners -- Analyst

I love it. It's extra -- cyber security is a big --

Robert C. Rowe -- Chief Executive Officer

We had an extra layer of security for equity analysts.

Brian B. Bird -- President and Chief Operating Officer

Yeah.

James Ward -- Guggenheim Partners -- Analyst

I love it. What I was saying there to Travis' comment, I said, well, I count you among those front. So feel free to call me as you wish. So the question on Aberdeen was already asked and answered, 50% higher is very clear. 2022 EPS guidance. I understand capex and presumably, how you're going to finance that in some way, shape or form will be part of the discussion at EEI. Will 2022 EPS guidance come at the same time or will that come later?

Crystal D. Lail -- Vice President And Chief Financial Officer

Absolutely. We will be talking about both '22 EPS guidance along with capital plans. Obviously with things shifting with both Laurel accelerating and Aberdeen moving, we'll be updating capital, EPS and all financing plans.

James Ward -- Guggenheim Partners -- Analyst

Beautiful.

Robert C. Rowe -- Chief Executive Officer

So you've got to be there.

James Ward -- Guggenheim Partners -- Analyst

Well, certainly will be. The final question that I have is on Laurel, you mentioned in the release that toward the end of last week there was an unfortunately other lawsuit filed and mentioned the potential for that to delay construction. How should we think about the timing on when you could start construction, how this could impact? Well, maybe I'll just start at there. How good this is about [Phonetic] timing and then start date, end date, financing etc.?

Robert C. Rowe -- Chief Executive Officer

I will say a couple of things and turn it over to our COO. Obviously we were disappointed by the litigation. It seem to be untimely in terms of the administrative process followed. We were encouraged to hear today from the Governor that we will be side-by-side with the department in defending the lawsuit. But obviously this is Monday. We received that just several days ago. So our legal team is evaluating. Brian?

Brian B. Bird -- President and Chief Operating Officer

Yeah. What I would add is the biggest time factor at this point in time is getting the engines manufactured and from a site preparation standpoint and permitting, there are certain things that we're working on. We'll continue to work on that during this process. But it's the -- and that will take time and so I think there'll be on a time that can transpire, if you will, the lawsuit that we can be working at some other things.

James Ward -- Guggenheim Partners -- Analyst

Got you. Well, it sounds like you've got some good allies there, which is very nice to hear. The last question would be just on those, the construction of those engines. Where would that be taking place. Some RICE units are European in origin, others -- rather than just assuming and figure out I'd just ask the question. Where would --

Brian B. Bird -- President and Chief Operating Officer

We have had engines in the past for PGGS, so produced in Germany and shipped and we'll be doing the same here for Laurel.

James Ward -- Guggenheim Partners -- Analyst

Beautiful. Thank you very much, guys. Look forward to seeing you at EEI.

Travis Meyer -- Director of Corporate Finance and Investor Relations Officer

Thanks, James. We'll take our next question from the line of Jonathon Reeder at Wells Fargo. Jonathan? Don't forget the triple unmute.

Jonathon Reeder -- Wells Fargo Securities, LLC -- Analyst

All right. Can you hear me now?

Robert C. Rowe -- Chief Executive Officer

Yes.

Travis Meyer -- Director of Corporate Finance and Investor Relations Officer

Yeah. Sure, can, Jonathan.

Jonathon Reeder -- Wells Fargo Securities, LLC -- Analyst

Yeah, it takes a while for that unmute button pop-ups. So apologies for that. Just kind of piggybacking on that last question, just to be clear, you've given, I guess, the contractors for Laurel the notice to proceed then, right, where we're definitely moving forward. It's not that you intend to do it before sometime in the future when you have to execute on the fixed price.

Brian B. Bird -- President and Chief Operating Officer

We are on the final stages on final notice to proceed. I'll leave it at that.

Jonathon Reeder -- Wells Fargo Securities, LLC -- Analyst

And then another front around the capex refresh, but it sounds like despite this environmental lawsuit, you are going to be rolling that Laurel plant then into the forecast. Even though I guess that has the potential to derail it.

Brian B. Bird -- President and Chief Operating Officer

Absolutely.

Jonathon Reeder -- Wells Fargo Securities, LLC -- Analyst

Okay. Is it safe to assume these global supply chains and inflationary pressures are also impacting kind of the base capex budget, thus if you want to accomplish the same amount of work as contemplated in the current budget, it might cost more to do so?

Brian B. Bird -- President and Chief Operating Officer

Yeah, it's a good question. Matter of fact, a question that was raised by the Board yesterday when we got the capital budget approved. I would say in two ways. At the time of capital budgets put together in July and we considered increasing cost from an inflationary standpoint, but I'd argue that since July even, we're seeing a bit more change there. So it's something that we certainly want to keep our eyes on. I think what might be an offsetting factor to some increased cost is concerns about -- supply chain concerns about other things that could slow construction too. So we kind of felt that we probably will end up about where we planned initially.

Jonathon Reeder -- Wells Fargo Securities, LLC -- Analyst

You're saying where you planned initially from a dollar perspective, but not necessarily --

Brian B. Bird -- President and Chief Operating Officer

From a dollar perspective. From a dollar perspective.

Jonathon Reeder -- Wells Fargo Securities, LLC -- Analyst

Okay. Okay. And then, I guess in terms of though like getting certain amount of work actually done going forward, you'll have to look at what it's going to cost to get that done balanced out against your, I guess, expected rate impacts and figure out what the sweet spot is there?

Brian B. Bird -- President and Chief Operating Officer

Correct.

Jonathon Reeder -- Wells Fargo Securities, LLC -- Analyst

Okay. And then [Speech Overlap] --

Robert C. Rowe -- Chief Executive Officer

The other comment on supply chain is the Board management is paying a lot of attention to supply chain issues, both sides cost and availability, as is the entire industry. And we're participating in the industry effort to manage through this. Certainly the challenges don't same transitory in the sense that they will evaporate in a period of weeks or months.

Brian B. Bird -- President and Chief Operating Officer

Yeah. And again just to be a bit more clear from my perspective, obviously the supply chain issues and other issues that could cause work to slow things could -- I don't think it's an essence of cutting projects as much as pushing projects out into the future.

Jonathon Reeder -- Wells Fargo Securities, LLC -- Analyst

Got you. Well, that makes sense. And then actually I'm trying to think -- I had a follow-up on that and I lost my train of thought. Just two kind of housekeeping items. The $2.7 million pre-tax reversal of the previously written offline collectible accounts, was that anticipated in the '21 guidance or was that kind of an upside surprise?

Crystal D. Lail -- Vice President And Chief Financial Officer

I would say that was within line with our expectations.

Jonathon Reeder -- Wells Fargo Securities, LLC -- Analyst

Okay. All right. Well, thanks. I'll leave it there. Appreciate the time.

Travis Meyer -- Director of Corporate Finance and Investor Relations Officer

Thanks, Jonathan. And with that we -- I think our Monday morning call has -- no we did just have one come into the queue here. It is the last four digits 3425.

Eric Peterson -- Millennium Management -- Analyst

Hey, guys. Can you hear me?

Travis Meyer -- Director of Corporate Finance and Investor Relations Officer

Yes, we can. Who do we have?

Eric Peterson -- Millennium Management -- Analyst

Hey. This is Eric Peterson from Millennium.

Travis Meyer -- Director of Corporate Finance and Investor Relations Officer

Hey, Eric.

Eric Peterson -- Millennium Management -- Analyst

I appreciate you taking my question. Hey. Just real quick on the project up in Aberdeen. Can you give us any flavor on whether the capacity need will still be there in the next iteration of the IRP next year?

Brian B. Bird -- President and Chief Operating Officer

Absolutely.

Eric Peterson -- Millennium Management -- Analyst

And then part two -- oh, go ahead.

Brian B. Bird -- President and Chief Operating Officer

Yeah, I think -- I'm sorry, I didn't interrupt -- if you had a further question, I'll pause and let's keep going.

Eric Peterson -- Millennium Management -- Analyst

Okay. Yeah, just separately, was that charge-off adjusted out in your non-GAAP earnings this quarter?

Brian B. Bird -- President and Chief Operating Officer

No, I'll let the CFO answer that question. I'll take the first question. I think the capacity need still exists in South Dakota. I think we just want -- we will continue to manage that and these other means to close that gap in the short term, but continue to evaluate what we want to do longer term there. And again, understanding what pricing has done, in the future come back at some point in time in the next IRP and make a decision there.

Crystal D. Lail -- Vice President And Chief Financial Officer

And, Eric, this is Crystal. The second part of your question is, was the charge-off that's related to those initial cost at Aberdeen non-GAAP-ed out. It was not. It is in our earnings.

Eric Peterson -- Millennium Management -- Analyst

Got it. Okay. Thank you, guys, very much.

Travis Meyer -- Director of Corporate Finance and Investor Relations Officer

Thanks, Eric. It looks like we have one more question in the queue that we're trying to get through here. We'll see if this works. It's from the line of Matt Davis, I believe. Matt, we just allowed you to speak. If you --

Matthew Davis -- Coann Capital -- Analyst

Hi, guys. Can you hear me?

Travis Meyer -- Director of Corporate Finance and Investor Relations Officer

Yeah, we can. [Phonetic]

Matthew Davis -- Coann Capital -- Analyst

So I just had a question on the Aberdeen project. I mean, I understand that pricing has gone up roughly 50%. But what -- based on what you're seeing in the energy market as well as in the capacity market in your region with the extreme cost as well as, I believe the project was expected to come online sometime in 2024. So a little bit later in the the planning horizon, why go ahead and make that decision now? And how do you -- and is this -- the 50% increase in the project cost enough to kind of outweigh what you're seeing in the energy and capacity markets?

Brian B. Bird -- President and Chief Operating Officer

Yeah. I think the main thing was when you sit down with the Commission and tell you want to give them a heads up that if we move forward this project at this point in time this is what we expect to see and we talked about alternatives and then we collectively agreed it probably makes sense to wait. And we had asked if there is certain other things we can do in the short term, we did say we had alternatives and we would collectively look at that in the next IRP.

If you might remember, we initially -- Aberdeen was something it didn't necessarily contemplate in the first IRP, but we thought from an expeditious standpoint we could forge ahead with that and we were certainly planning to head that direction. But again, the dialog we have with the Commission, it just was a collective decision to not move forward.

Matthew Davis -- Coann Capital -- Analyst

And then just one other one. In terms of thinking about the moving pieces around the capital program, I get that your base plan probably has some inflationary measures. But is it just as simply as thinking about at putting in Laurel and subtracting out Aberdeen or are there other pieces to the puzzle?

Robert C. Rowe -- Chief Executive Officer

We'll be discussing the updated capital plan in great detail at EEI. Honestly, excited about the good and important work ahead of us. So it's not a simple matter of trading out one for one.

Matthew Davis -- Coann Capital -- Analyst

Okay. Thank you.

Brian B. Bird -- President and Chief Operating Officer

Thanks, Matt.

Travis Meyer -- Director of Corporate Finance and Investor Relations Officer

Thanks, Matt. It looks like we have one more question in the queue from Andy Levi. Andy we're opening your line.

Andrew Levi -- HITE Hedge Asset Management LLC -- Analyst

Unmute. Okay, does that work?

Travis Meyer -- Director of Corporate Finance and Investor Relations Officer

That works.

Andrew Levi -- HITE Hedge Asset Management LLC -- Analyst

Oh, look at that. See, I am the old guy and I can figure it out quicker than the other guys.

Robert C. Rowe -- Chief Executive Officer

You're technologically adept.

Andrew Levi -- HITE Hedge Asset Management LLC -- Analyst

Yeah, I can push a button. How are you guys are doing? All right, everything good?

Robert C. Rowe -- Chief Executive Officer

Very good.

Andrew Levi -- HITE Hedge Asset Management LLC -- Analyst

Everything good. Yes, OK, good. Okay. So just two questions. First just on natural gas in general. If I remember it correctly, right, you guys made several acquisitions on the natural gas side as far as resources. Is that correct?

Robert C. Rowe -- Chief Executive Officer

Correct.

Andrew Levi -- HITE Hedge Asset Management LLC -- Analyst

And are those still flowing gas? Are those still flowing gas?

Robert C. Rowe -- Chief Executive Officer

Yes.

Andrew Levi -- HITE Hedge Asset Management LLC -- Analyst

Okay. And so could you just -- I have a couple of questions around that. But could you kind of just explain how significant that is as far as helping you this winter on supply and I mean that price wise?

Robert C. Rowe -- Chief Executive Officer

I'll say a couple of things and turn it over to, again, Brian, our COO. In Montana, in particular, think about the integrated system that does have some owned supply that has a lot of storage and transmission and storage at both ends of the system. So that gives us flexibility in terms of bringing gas in several points on the system, storing -- purchasing and storing gas in the off-season when prices are relatively more attractive than moving the gas around the system. So that puts us in, I think, a much better position than if we were simply a local delivery system. So that's a real positive. Brian?

Brian B. Bird -- President and Chief Operating Officer

Yeah. I would say two things. First of all, we thought that buying gas reserves made sense. Some rules were changed at the Commission that made difficult for us to do more of that. We would like to have done more particularly for events like this with higher prices. But I would say, about 10% to 15% of that purchase gas is available to us at this point in time and the nice thing Bob mentioned, stores that we have in our system. We're able to use that storage and fill it up and save it for peak periods in the winter season and that provides about 50% of the gas that we use. So we certainly -- that's a nice advantage of our system.

Andrew Levi -- HITE Hedge Asset Management LLC -- Analyst

When you say 10% to 15% that's your total supply, not what you're using from the reserves that you have, is that correct?

Brian B. Bird -- President and Chief Operating Officer

Total supply -- total supply, Andy.

Andrew Levi -- HITE Hedge Asset Management LLC -- Analyst

Right. Okay. And how -- I know it's been a while since we discussed this, what do you have as far as reserves, like what's the total amount that you have or that you actually produce on an annual basis?

Brian B. Bird -- President and Chief Operating Officer

Andy, years ago we used to have those slides in our deck and we're talking about [Speech Overlap] --

Andrew Levi -- HITE Hedge Asset Management LLC -- Analyst

I know. Okay. Okay, so -- OK. So that's fine. You don't have it right now. That's fine. We can discuss at EEI. And then I've like a bigger picture question about that. I understand it's a rate base type of product -- project -- product. Okay. At the same time you need equity and obviously equity affects our rates and affects the customer as well. Are there any thoughts again that's kind of paying its dividends this year, but also the price of gas has gone up so dramatically and the price for assets has gone up so dramatically that have you ever thought of monetizing those assets in lieu of doing equity?

Robert C. Rowe -- Chief Executive Officer

That would be a no.

Andrew Levi -- HITE Hedge Asset Management LLC -- Analyst

Okay, fair enough. Stuff that pops in my head.

Robert C. Rowe -- Chief Executive Officer

No, it's good. We always appreciate your ideas.

Andrew Levi -- HITE Hedge Asset Management LLC -- Analyst

Okay. Well, some people do. I don't know about my family for that. It depends on the family member. And then the last question --

Robert C. Rowe -- Chief Executive Officer

No one is a hero at home.

Andrew Levi -- HITE Hedge Asset Management LLC -- Analyst

That's true. And then the last question I have is just again around the amount of equity that you need, not the actual dollar amount but just again you're thinking on -- because I truly believe that the ATM has affected your stock price on a relative basis. And so any thoughts kind of around that versus just someone like myself or other people just kind of buying the shares from you all at once and then taking that pressure off the stock since it doesn't trade that much volume, same question I ask to you every quarter.

Robert C. Rowe -- Chief Executive Officer

Crystal?

Crystal D. Lail -- Vice President And Chief Financial Officer

Andy, we appreciate your resounding interest in our stock. We think it's a good holding through. We hear you on that. The comments on technical execution would be the only thing I have to say about that. We hear you.

Brian B. Bird -- President and Chief Operating Officer

I'll help you out, Andy, on your previous question. You asked the amount of Bcf. And if my math serves me kind of in that 10% to 15%, I'd argue it's about 3 Bcf.

Andrew Levi -- HITE Hedge Asset Management LLC -- Analyst

Okay. That's great, guys. I see --

Brian B. Bird -- President and Chief Operating Officer

[Indecipherable]

Andrew Levi -- HITE Hedge Asset Management LLC -- Analyst

Okay. I see you guys soon in Florida. Look forward to seeing you in person. Can you hear me?

Crystal D. Lail -- Vice President And Chief Financial Officer

Yes.

Robert C. Rowe -- Chief Executive Officer

Yes. Thank you. [Speech Overlap]

Andrew Levi -- HITE Hedge Asset Management LLC -- Analyst

Okay. See you, guys. Thank you. Bye.

Travis Meyer -- Director of Corporate Finance and Investor Relations Officer

Looks like we have another call coming in from the line of Paul Patterson [Phonetic]. Paul, we're opening up your line now.

Paul Patterson -- Analyst

Yeah. Can you hear me?

Travis Meyer -- Director of Corporate Finance and Investor Relations Officer

Yeah.

Paul Patterson -- Analyst

Okay.

Robert C. Rowe -- Chief Executive Officer

Yeah, we lost you now.

Paul Patterson -- Analyst

Can you hear me?

Robert C. Rowe -- Chief Executive Officer

Barely.

Paul Patterson -- Analyst

I'll send you a text.

Travis Meyer -- Director of Corporate Finance and Investor Relations Officer

Yes. We can hear you now.

Crystal D. Lail -- Vice President And Chief Financial Officer

We can hear you.

Paul Patterson -- Analyst

Okay. My question is basically with the Aberdeen increase of 50% it sounds a little like hyperinflation. Was there any specific driver or drivers or can you just give a little more color on? I apologize, I missed it.

Brian B. Bird -- President and Chief Operating Officer

No, I didn't give any specific drivers. Thinking about the total cost it wasn't just one particular component. But from a total cost perspective, it was upwards of 50% increase, all in.

Paul Patterson -- Analyst

Okay. Okay. So it's just everything just pretty much came together. Is that it? This seems so big.

Brian B. Bird -- President and Chief Operating Officer

Yep, it does.

Paul Patterson -- Analyst

Okay. Thanks so much. I really appreciate it.

Robert C. Rowe -- Chief Executive Officer

Thank you.

Brian B. Bird -- President and Chief Operating Officer

Thanks, Paul.

Travis Meyer -- Director of Corporate Finance and Investor Relations Officer

All right. With that, I think we have now exhausted our queue. I'll hand it back to Bob for close.

Robert C. Rowe -- Chief Executive Officer

Okay. Thank you all for your interest and a very good discussion and the theme here is we're all going to have lots to talk about at EEI. So looking forward to seeing most of you, many of you in person and some of you probably online. Take care and be safe.

Duration: 29 minutes

Call participants:

Crystal D. Lail -- Vice President And Chief Financial Officer

Robert C. Rowe -- Chief Executive Officer

Brian B. Bird -- President and Chief Operating Officer

Travis Meyer -- Director of Corporate Finance and Investor Relations Officer

Ryan Greenwald -- Bank of America Merrill Lynch -- Analyst

James Ward -- Guggenheim Partners -- Analyst

Jonathon Reeder -- Wells Fargo Securities, LLC -- Analyst

Eric Peterson -- Millennium Management -- Analyst

Matthew Davis -- Coann Capital -- Analyst

Andrew Levi -- HITE Hedge Asset Management LLC -- Analyst

Paul Patterson -- Analyst

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