Property, Plant and Equipment

12 Months Ended

Dec. 31, 2024

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

(5) Property, Plant and Equipment

The following table presents the major classifications of our property, plant and equipment (in thousands):

	December 31,
	2024		2023
	(in thousands)
Electric Plant	$	6,034,159	$	5,462,229
Natural Gas Plant	1,615,228		1,506,943
Plant acquisition adjustment(1)	686,328		686,328
Common and Other Plant	277,623		267,132
Construction work in process	164,767		377,241
Total property, plant and equipment	8,778,105		8,299,873
Less accumulated depreciation	(2,019,142)		(1,930,688)
Less accumulated amortization	(360,688)		(329,384)
Net property, plant and equipment	$	6,398,275	$	6,039,801

(1) The plant acquisition adjustment balance above includes our Beethoven wind project acquired in 2015, our hydro generating assets acquired in 2014, and the inclusion of our interest in Colstrip Unit 4 in rate base in 2009. The acquisition adjustment is amortized on a straight-line basis over the estimated remaining useful life of each related asset in depreciation expense.

Net plant and equipment under finance lease were $3.0 million and $5.2 million as of December 31, 2024 and 2023, respectively, which is primarily comprised of a long-term power supply contract with the owners of a natural gas fired peaking plant, which has been accounted for as a finance lease.

Jointly Owned Electric Generating Plant

We have an ownership interest in four base-load electric generating plants, all of which are coal fired and operated by other companies. We have an undivided interest in these facilities and are responsible for our proportionate share of the capital and operating costs while being entitled to our proportionate share of the power generated. Our interest in each plant is reflected in the Consolidated Balance Sheets on a pro rata basis and our share of operating expenses is reflected in the Consolidated Statements of Income. The participants each finance their own investment.

In January 2023 and July 2024, we entered into definitive agreements, the first with Avista and the second with Puget, to acquire their respective interests in Colstrip Units 3 & 4. In particular, we agreed to acquire a 15% (222 megawatts) interest from Avista and a 25% (370 megawatts) interest from Puget. Both agreements provide that the purchase price will be $0. These agreements are substantially similar and are both scheduled to close December 31, 2025, subject to the satisfaction of customary closing conditions and approvals contained within the agreements. Under the terms of the agreements, we will be responsible for operating costs starting on January 1, 2026; while Puget and Avista will remain responsible for their respective pre-closing share of environmental and pension liabilities attributed to events or conditions existing prior to the closing of the transaction and for any future decommission and demolition costs associated with the existing facilities that comprise their interests.

Acquisition of Avista and Puget's interests would result in our ownership of 55 percent of the facility with the ability to guide operating and maintenance investments. This would provide capacity to help us meet our obligation to provide reliable and cost effective power to our customers in Montana, while allowing opportunity for us to identify and plan for newer lower or no-carbon technologies in the future.

Either party may terminate the respective separate agreement if any requested regulatory approval is denied or if the closing has not occurred by December 31, 2025 or if any law or order would delay or impair closing.

Information relating to our ownership interest in these facilities is as follows (in thousands):

	Big Stone (SD)			Neal #4 (IA)			Coyote (ND)			Colstrip Unit 4 (MT)
December 31, 2024
Ownership percentages	23.4		%	8.7		%	10.0		%	30.0		%
Plant in service	$	157,572		$	65,426		$	52,430		$	330,888
Accumulated depreciation	49,573			39,025			39,887			137,153
December 31, 2023
Ownership percentages	23.4		%	8.7		%	10.0		%	30.0		%
Plant in service	$	156,696		$	64,132		$	52,630		$	323,793
Accumulated depreciation	44,525			37,178			39,393			127,381