MDU Resources Group, Inc. (NYSE:MDU) Q3 2023 Earnings Call Transcript

Brian Russo: Just a follow-up on the renewables. Just looking at the third quarter revenue, looks like renewables were down on CSG, of course, was down quite significantly. And again, it was down for the 9 months ended September. While I see margins up, I just thought if you could just comment on the revenue trends there. If you’re seeing any near-term slowdown or projects being pushed to the right.

Dave Goodin: Jeff?

Jeff Thiede: We had a large project complete in Las Vegas. We’ve also picked up additional work in the renewable solar area in Ohio and in the Midwest. We do have several projects on our radar screen in the Midwest and are currently also looking for an increase of our backlog in the renewable solar market in the Las Vegas area, going forward. We did have a completion of 2 very significant projects in the Pacific Northwest, and those projects are completed. And I think that’s what is affecting the numbers that we’ve reported out here. So we have the capabilities on the solar workforce also the EVs, electrical vehicle, we’ve worked in manufacturing facilities. We’ve done quite a view of the charging stations. So we’ve got the experience. We see that this is a good opportunity going forward. We’re positioned well for it, and we’ll be able to build upon that as those opportunities come forward.

Brian Russo: And then switching gears [Audio Gap] in terms of rate cases and what’s already completed. The only thing left, right, is the Washington gas case? And given that, correct me if I’m wrong, but that’s about 20% to 25% of your overall utility operations. Could you just add more color — maybe the accumulating rate base looks like or remind us when the test year of the last rate case that concluded was.

Nicole Kivisto: I can go ahead and take that. Thanks for the question, Brian. So yes, I’m really proud of the team’s work as we think about the overall regulatory activity that we have undertaken, obviously, a lot of that was highlighted in the news release. So you have seen what we’ve done historically, and certainly, that has added to our ability to improve our ROE over the last trailing 12 months. So really proud of the team’s work there. In terms of your question on go ahead, what we’re doing in the ensuing year. Yes, the one we’ve highlighted in the remarks is the Washington multiyear case. So this will be the first year that we’d be using the multiyear case in that state. We recently implemented rates in the state here last year and we’ll be filing for the multiyear case here next year.

In addition to Washington, though, I would comment that we are looking at 3 other states for filings later in the year next year. So most likely, we would be filing addition to Washington and 3 other gas jurisdictions. With respect to the overall percentage, you’ve got that approximately right. But keep in mind that we’ve got Washington and Oregon that operate under the Cascade brand. So Washington would be the larger state of those 2. Did that answer your question?

Brian Russo: Yes, it did. And just one quick follow-up. I think in Washington state, is it a 11-month statutory period to conclude rate cases you file in early ’24, we can assume that you’ll have full rates in effect in 2025.

Nicole Kivisto: You are correct. It’s an 11-month statutory. So if we file in the first quarter, whatever date we filed 11 months from there would be the assumed implementation date.

Brian Russo: And then just switching to the transmission. MISO Tranche 1 projects that you’re working on. Any updates on the development there? Is everything on time and on schedule and aligned with your capital forecast?

Nicole Kivisto: We have been working with our partner and have hosted several open houses in some of the communities that would be in the line of sight in terms of that project. Everything right now, it’s obviously early stages, but everything right now is on time, and we have not changed the overall budget. So as a reminder, a partner on that project. Total project costs are estimated at $440 million, our share of which would be $220 million, and that is included in our forecast and will continue to be included at that rate as we think about a new updated forecast that we would be bringing to the market here later in November.