MDU Resources to expand electric, natural gas utilities, pipeline businesses with $2.8 billion investment
(UI) – MDU Resources Group, Inc. plans to make capital investments totaling $2.8 billion from 2024 through 2028.
MDU Resources intends to pursue a tax-free spinoff of its construction services subsidiary, MDU Construction Services Group. MDU Resources intends to become a pure-play regulated energy delivery business consisting of electric and natural gas utilities and a natural gas pipeline business.
MDU Resources plans to increase investments in its electric and natural gas utilities 44% over the next five years as compared to 2019-23. Planned investments include:
- Construction of electric transmission lines and substations, as well as natural gas delivery infrastructure, to serve a customer base that is expected to continue growing at 1%-2% annually over the next five years.
- Construction of a Midwest Independent System Operator-approved 345-kilovolt transmission line project from Jamestown, North Dakota, to Ellendale, North Dakota, in partnership with Otter Tail Power Company.
- Replacing and modernizing certain existing electric and natural gas utility infrastructure to ensure continued safe and reliable service to customers.
Rate base for the utilities is expected to grow 6%-7% on a compounded annual basis over the next five years.
MDU Resources' planned capital investments at the pipeline business will focus on system growth to expand natural gas transmission capacity. A number of projects are included in the planned investments, including the Wahpeton Expansion project in North Dakota that is expected to be constructed in 2024.
In 2024, MDU Resources plans to invest $52 million in MDU Construction Services Group, primarily on normal replacements and upgrades of the equipment that is used in the transmission and distribution, and electrical and mechanical services the company performs.
"Our capital investment plans over the next five years are heavily focused on our regulated energy delivery businesses, with a 15% increase in planned spending as compared to the previous five years," said David L. Goodin, president and CEO of MDU Resources. "We plan to expand our energy delivery systems to meet growing demand while upgrading existing infrastructure to ensure continued reliable and safe service to our customers. As we expect to complete the spinoff of our construction services business late next year, our planned capital investments for that business are limited to 2024."
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