MDU RESOURCES GROUP INC
For the period ended Jun 30, 2025. Filed Aug 7, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 7, 2025
MDU$18.63+0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0000067716-25-000042
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-07.
0000067716-25-000074
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 196 previous paragraphs and 259 current paragraphs.
105 unchanged; 68 reworded; 67 added; 22 removed; 1 previous and 19 current paragraphs rearranged.
Tables are not compared: 14 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (67)
Current report
•The electric business earnings decrease was largely the result of higher operation and maintenance expense, primarily due to increased payroll-related costs, higher contract services related to electric generation station planned outage-related costs, as well as increased software, which includes certain costs associated with TSA services provided, and insurance expenses. The decrease in net income was partially offset by rate relief in South Dakota and increased commercial retail sales volumes, largely from a data center near Ellendale, North Dakota.
Current report
•The natural gas distribution business reported an increased seasonal loss, largely the result of higher operation and maintenance expense, primarily due to higher payroll-related costs and increased software expenses, which includes certain costs associated with TSA services provided. Lower volumes due to warmer weather further drove the loss. The seasonal loss was partially offset by higher retail sales revenue due to rate relief in Washington and Montana, and higher transportation revenue.
Current report
•Other experienced lower operation and maintenance expense, primarily a result of corporate overhead costs classified as continuing operations allocated to Everus in 2024, which are not included in Other in 2025. Other was negatively impacted by higher income tax adjustments related to the Company's annualized estimated tax rate.
Current report
•Revenue decreased $1.1 million.
Current report
▪Higher net transmission revenue of $1.1 million, including data center revenue.
Current report
▪Rate relief of $500,000 in South Dakota.
Current report
•Electric fuel and purchased power decreased $1.8 million, largely the result of lower commodity prices, partially offset by higher retail sales volumes.
Current report
•Operation and maintenance increased $6.8 million.
Current report
▪Higher payroll-related costs of $2.5 million.
Current report
▪Higher contract services related to electric generation station planned outage-related costs of $2.1 million.
Current report
▪Increased software expense of $1.9 million.
Current report
•Taxes, other than income increased $200,000, largely as a result of higher payroll tax.
Current report
Six Months Ended June 30, 2025, Compared to Six Months Ended June 30, 2024 Electric earnings decreased $8.0 million as a result of:
Current report
•Revenue increased $3.5 million.
Current report
▪Rate relief of $900,000 in South Dakota.
Current report
•Operation and maintenance increased $11.8 million.
Current report
◦Largely the result of:
Current report
▪Increased software expense of $2.9 million.
Current report
•Other income decreased $300,000, primarily resulting from lower interest income from regulatory deferral balances and lower returns on the Company's nonqualified benefit plan investments, partially offset by TSA income as described above.
Current report
•Interest expense increased $800,000, largely the result of lower AFUDC.
Current report
•Income tax benefit increased $5.2 million, largely due to lower income before income taxes, and higher production tax credits of $2.3 million driven by higher wind production.
Current report
Three Months Ended June 30, 2025, Compared to Three Months Ended June 30, 2024 Natural gas distribution reported an increased seasonal loss of $2.4 million as a result of:
Current report
•Revenue increased $5.4 million.
Current report
▪Rate relief of $3.2 million, primarily in Washington and Montana.
Current report
•Purchased natural gas sold increased $2.4 million, largely due to net environmental compliance costs of $10.3 million and higher commodity costs of $1.8 million. These increases were largely offset by lower volumes of natural gas purchased of $9.7 million.
Current report
•Operation and maintenance increased $5.5 million.
Current report
▪Higher payroll-related costs of $2.8 million.
Current report
▪Higher software-related expense of $1.2 million.
Current report
•Taxes, other than income increased $600,000, largely from higher revenue-based taxes recovered in rates.
Current report
•Other income decreased $300,000.
Current report
▪Lower interest income on regulatory deferral balances.
Current report
▪Higher TSA revenue, of $2.0 million as described above.
Current report
▪Higher returns on the Company's nonqualified benefit plans.
Current report
•Income tax benefit increased $400,000, primarily the result of higher seasonal loss before income taxes, partially offset by changes in permanent tax adjustments.
Current report
•Revenue increased $85.2 million.
Current report
▪Higher purchased natural gas sold of $64.0 million, including net environmental compliance costs, recovered in customer rates and offset in expense, as described below.
Current report
•Operation and maintenance increased $9.8 million.
Current report
◦Due in large part to:
Current report
▪Higher payroll-related costs of $3.2 million.
Current report
▪Higher software-related expense of $1.1 million.
Showing the first 40 of 67 passages. Open the source sections for the rest.
Removed paragraphs (22)
Previous report
•Revenue increased $4.7 million.
Previous report
◦Largely due to:
Previous report
•Operation and maintenance increased $5.1 million.
Previous report
▪Increased software and insurance expenses.
Previous report
•Taxes, other than income decreased $300,000, largely as a result of lower property tax and lower payroll tax.
Previous report
•Revenue increased $79.8 million.
Previous report
◦Largely due to:
Previous report
•Operation and maintenance increased $4.3 million.
Previous report
▪Higher payroll-related costs of $400,000.
Previous report
•Other income decreased $4.9 million.
Previous report
▪Lower returns of $1.3 million on the Company's nonqualified benefit plans.
Previous report
The Electric Generation and Greenhouse Gas Rule establishes GHG emissions standards for new natural gas-fired electric generating units and existing coal units. It is anticipated this rule could affect Montana-Dakota's jointly owned coal-fired units. The joint owners continue to evaluate compliance options. This rule is currently being challenged before the DC Circuit Court. Montana-Dakota is participating in this challenge. Though the case has been fully briefed and oral argument has taken place, the EPA has requested the court hold the case in abeyance in order to allow new leadership to review the underlying rule, which was granted by the court in February 2025.
Previous report
The Legacy Coal Combustion Residuals Rule requires utilities to evaluate older coal ash disposal units at certain inactive and active electric generating facilities. Montana-Dakota must complete facility evaluations by February 8, 2027, to determine if legacy ash is present and assess the extent of ash on site. If legacy ash is present, Montana-Dakota must monitor and evaluate for potential impacts and may need to conduct additional closure and remediation. The cost of additional remediation or closure activities may be material. This rule also faces challenge in the DC Circuit Court.
Previous report
The fourth rule, the Effluent Limitations Guidelines Rule is not expected to have impacts on any owned or co-owned Montana-Dakota facilities.
Previous report
•In Oregon, the Climate Protection Program Rule was approved in December 2021, which required natural gas companies to significantly reduce GHG emissions from customer use of natural gas starting in 2022. This rule was ultimately invalidated due to a procedural issue by the Oregon Court of Appeals, with final judgment issued in February 28, 2024.
Previous report
Cascade began incurring expenses in 2022 to comply with the prior Climate Protection Program Rule. The OPUC has authorized Cascade, through a deferred accounting order, to collect $4.2 million in actual 2022 and 2023 costs related to the prior Climate Protection Program Rule. The average residential customer will experience a monthly bill increase of $1.75 or 2.4 percent. Cascade also expects the compliance costs for the new Climate Protection Program Rule to be recovered through customer rates. In August 2024, the Company filed a request for reauthorization of the use of deferred accounting for costs related to the decarbonization programs in Oregon. Due to the timing of regulatory recovery, future compliance obligation purchases could impact the Company's operating cash flow.
Previous report
•In Washington, the Climate Commitment Act requires natural gas distribution companies to reduce overall GHG emissions 45 percent below 1990 levels by 2030, 70 percent below 1990 levels by 2040 and 95 percent below 1990 levels by 2050. The Company must demonstrate that it has met GHG emissions reduction goals through a combination of on-site emissions reductions and the use of approved allowances and offsets. Some emissions allowances are allocated by the Washington DOE to the Company at no cost and a portion of these are required to be sold at auction to generate revenue for the benefit of customers.
Previous report
•Revenues increased $5.4 million as a result of:
Previous report
▪Growth projects placed in service throughout 2024 of $3.8 million.
Previous report
◦Operation and maintenance increased $800,000.
Previous report
•Other income decreased $500,000, primarily due to lower investment returns on the Company's non-qualified benefit plans.
Previous report
•Potential Baker Storage Field Enhancement and associated transportation expansion project, which will increase the firm storage deliverability and transportation from the Company's Baker Storage Field in southeastern Montana. The storage enhancement project includes the purchase of additional cushion gas, construction of new storage wells and well lines and a new compressor station. The transportation expansion project includes the construction of new pipeline and compression. A binding open season for this capacity began in April 2025 and concludes in May 2025.
Reworded paragraphs (68)
Previous wording
The Company incurred costs in connection with the strategic initiatives in 2024 and 2025, as noted in the Business Segment Financial and Operating Data section. The majority of the separation costs have already been incurred due to the separation of Everus in October 2024, as previously discussed.
Current wording
The Company incurred costs in connection with its strategic initiatives in 2024 and 2025, as noted in the Business Segment Financial and Operating Data section. The majority of the separation costs have already been incurred due to the separation of Everus in October 2024, as previously discussed.
Previous wording
Market Trends The Company continues to manage the inflationary pressures experienced throughout the United States, including the impact that inflation, higher interest rates, changes in tariffs, commodity price volatility and supply chain disruptions may have on its business and customers and proactively looks for ways to lessen the impact to its business. The Company has observed supply chain improvements in lead times for certain commodities. Although the Company has started to see some reduction to interest rates, they remain elevated and have resulted in and may continue to result in increased borrowing costs on new debt, impacts to the Company's asset valuations and negatively impacting the purchasing power of its customers.
Current wording
Market Trends The Company continues to manage the inflationary pressures experienced throughout the United States, including the impact that inflation, higher interest rates, changes in tariffs, commodity price volatility and supply chain disruptions may have on its business and customers and proactively looks for ways to lessen the impact to its business. The Company has observed supply chain improvements in lead times for certain commodities. Although the Company has started to see some reduction to interest rates, they remain elevated and have resulted in and may continue to result in increased borrowing costs on new debt, impacts to the Company's asset valuations and negatively impacting the purchasing power of its customers. The Company has not yet observed any material impacts related to the changes in tariffs and continues to monitor the future impacts that may occur.
Previous wording
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. Other than statements of historical facts, all statements which address activities, events, or developments that the Company anticipates will or may occur in the future are based on underlying assumptions (many of which are based, in turn, upon further assumptions), including, but not limited to, statements identified by the words "anticipates," "estimates," "expects," "intends," "plans," and "predicts" in each case related to such things as growth estimates, stockholder value creation, the Company's "CORE" strategy, capital expenditures, financial guidance, trends, objectives, goals, strategies and other such matters, are forward-looking statements. These forward-looking statements are based on many assumptions and factors, which are detailed in the Company's filings with the SEC.
Current wording
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. Other than statements of historical facts, all statements which address activities, events, or developments that the Company anticipates will or may occur in the future are based on underlying assumptions (many of which are based, in turn, upon further assumptions), including, but not limited to, statements identified by the words "anticipates," "estimates," "expects," "intends," "plans," and "predicts" in each case related to such things as growth estimates, stockholder value creation, the Company's "CORE" strategy, capital expenditures, financial guidance, trends, objectives, goals, dividend payout ratio targets, strategies and other such matters, are forward-looking statements. These forward-looking statements are based on many assumptions and factors, which are detailed in the Company's filings with the SEC.
Previous wording
Three Months Ended March 31, 2025, Compared to Three Months Ended March 31, 2024 The Company's consolidated earnings decreased $18.9 million. The decrease in earnings is primarily due to the absence of income from discontinued operations in 2025, partially offset by increased earnings at the natural gas distribution and pipeline businesses.
Current wording
Three Months Ended June 30, 2025, Compared to Three Months Ended June 30, 2024 The Company's consolidated earnings decreased $46.7 million. The decrease in earnings is primarily due to the absence of income from discontinued operations in 2025. Other drivers of the earnings decrease include:
Previous wording
•The electric business earnings decrease was largely the result of higher operation and maintenance expense, primarily due to higher contract services related to electric generation station outage-related costs, increased software expenses and higher payroll-related costs, and lower investment returns on nonqualified benefit plans. The decrease in net income was partially offset by increased retail sales revenue due to higher volumes to residential customers, primarily due to colder weather, and higher volumes to a data center near Ellendale, North Dakota.
Current wording
•The electric business earnings decrease was largely the result of higher operation and maintenance expense, primarily due to higher payroll-related costs, increased software expenses, which includes certain costs associated with TSA services provided, higher contract services related to electric generation station planned outage-related costs, and higher insurance expense. The decrease in net income was partially offset by higher retail sales volumes, partly from a data center near Ellendale, North Dakota, as well as rate relief in South Dakota.
Previous wording
•The natural gas distribution earnings improvement was largely the result of higher retail sales revenue due to rate relief in Washington, Montana and South Dakota, as well as increased volumes due to colder weather. These increases were partially offset by higher operation and maintenance expense, lower interest income and lower investment returns on nonqualified benefit plans.
Current wording
•The natural gas distribution earnings improvement was largely the result of higher retail sales revenue due to rate relief in Washington, Montana and South Dakota, increased volumes due to colder weather in certain jurisdictions, as well as higher transportation revenue. These increases were partially offset by higher operation and maintenance expense, primarily due to increased payroll-related costs and higher software expenses, which includes certain costs associated with TSA services provided. Lower interest income also negatively impacted earnings.
Previous wording
•The earnings increase at the pipeline business was driven by growth projects placed in service throughout 2024 and customer demand for short-term firm capacity contracts. Higher storage-related revenue further drove the increase. The increase was offset in part by higher operation and maintenance expense, primarily attributable to payroll-related costs. The business also incurred higher depreciation expense due to growth projects placed in service, as previously discussed, and lower investment returns on nonqualified benefit plans.
Current wording
•The slight earnings increase at the pipeline business was driven by growth projects placed in service throughout 2024 and customer demand for short-term natural gas transportation contracts. Higher storage-related revenue further drove the increase. The increase was largely offset by higher operation and maintenance expense, primarily attributable to payroll-related costs, and the absence of proceeds received in 2024 from a customer settlement. The business also incurred higher depreciation expense due to growth projects placed in service, as previously discussed, and higher property tax accruals in certain jurisdictions.
Previous wording
Strategy and challenges The electric and natural gas distribution segments provide electric and natural gas distribution services to customers, as discussed in Note 14. Both segments strive to be top performing utility companies with a commitment to customers and communities, operational excellence, returns focused initiatives and an employee driven culture. The segments provide safe, reliable, competitively priced and environmentally responsible energy service to customers while focusing on growth and expansion opportunities within and beyond its existing territories. The Company is focused on cultivating organic growth while managing operating costs and monitoring opportunities for these segments to retain, grow and expand their customer base through extensions of existing operations, including building and upgrading electric generation, transmission and distribution, and natural gas systems, and through selected acquisitions of companies and properties with similar operating and growth objectives at prices that will provide stable cash flows and an opportunity to earn a competitive return on investment. The continued efforts to create operational improvements and efficiencies across both segments promotes the Company's business integration strategy. The primary factors that impact the results of these segments are the ability to earn authorized rates of return; weather; climate change laws, regulations and initiatives; competitive factors in the energy industry; population growth; and economic conditions in the segments' service areas.
Current wording
Strategy and challenges The electric and natural gas distribution segments provide electric and natural gas distribution services to customers, as discussed in Note 14. Both segments strive to be top performing utilities and provide safe, reliable, competitively priced and environmentally responsible energy services to customers. The segments are focused on cultivating organic growth while managing operating costs and monitoring opportunities for these segments to retain, grow and expand their customer base through extensions of existing operations, including building and upgrading electric generation, transmission and distribution, and natural gas systems. The continued efforts to create operational improvements and efficiencies across both segments promotes the Company's business integration strategy. The primary factors that impact the results of these segments are the ability to earn authorized rates of return; weather; climate change laws, regulations and initiatives; competitive factors in the energy industry; population growth; and economic conditions in the segments' service areas.
Previous wording
The electric and natural gas distribution segments are subject to extensive regulation in the jurisdictions where they conduct operations with respect to costs, timely recovery of investments and permitted returns on investment. The Company is focused on modernizing utility infrastructure to meet the varied energy needs of both its customers and communities while ensuring the delivery of safe, reliable, affordable and environmentally responsible energy. The segments continue to invest in facility upgrades to be in compliance with existing and known future regulations. To assist in the reduction of regulatory lag in obtaining revenue increases to align with increased investments, tracking mechanisms have been implemented in certain jurisdictions. The Company also seeks rate adjustments for operating costs and capital investments, as well as reasonable returns on investments not covered by tracking mechanisms. For more information on the Company's tracking mechanisms and recent rate cases, see Note 16 and the 2024 Annual Report.
Current wording
The electric and natural gas distribution segments are subject to extensive regulation in the jurisdictions where they conduct operations with respect to costs, timely recovery of investments and permitted returns on investment. The Company is focused on modernizing utility infrastructure to meet the varied energy needs of both its customers and communities while working to deliver safe, reliable, affordable and environmentally responsible energy. The segments continue to invest in facility upgrades to be in compliance with existing and known future regulations. To assist in the reduction of regulatory lag in obtaining revenue increases to align with increased investments, tracking mechanisms have been implemented in certain jurisdictions. The Company also seeks rate adjustments for operating costs and capital investments, as well as reasonable returns on investments not covered by tracking mechanisms. For more information on the Company's tracking mechanisms and recent rate cases, see Note 16 and the 2024 Annual Report.
Previous wording
In late summer and fall of 2023, electric fuel and purchased power prices increased across Montana-Dakota's integrated system. This was caused by transmission congestion in northwest North Dakota due to delays in additional SPP transmission line build-out, as well as additional load growth in the Bakken region. Electric fuel and purchased power prices remained elevated through January 2024. Montana-Dakota and MISO each filed a complaint with FERC against SPP related to this issue, which were denied in September 2024. In October 2024, Montana-Dakota and MISO filed with FERC for rehearing on FERC's decision to deny these complaints. Both rehearing requests were denied by operation of law in November 2024. FERC ultimately reaffirmed their prior position and denied the Montana-Dakota and MISO rehearing requests through commission action in March 2025. In January 2025, Montana-Dakota and MISO each filed a petition for review of the FERC decision with the United States Court of Appeals for the Eighth Circuit. To assist in the recovery of the higher electric fuel and purchased power costs, Montana-Dakota filed waiver requests with the NDPSC and SDPUC, which were approved deferring the increased costs to the annual fuel clause adjustment. In Montana, the waiver request is filed monthly and was unopposed by the MTPSC. Effective April 1, 2024, as approved by the NDPSC, Montana-Dakota started recovery in North Dakota of these increased costs over a period of two years rather than one year, which will lessen the impact to customers and allow more time for Montana-Dakota's FERC complaint to mature and have greater certainty of the outcome. In South Dakota and Montana, Montana-Dakota started recovery of these costs over a one-year period effective July 1, 2024. In December 2024, Montana-Dakota filed a request with the NDPSC for authorization to defer external legal expenses related to this congestion litigation and record those deferred expenses into a regulatory asset.
Current wording
In late summer and fall of 2023, electric fuel and purchased power prices increased across Montana-Dakota's integrated system. This was caused by transmission congestion in northwest North Dakota due to delays in additional SPP transmission line build-out, as well as additional load growth in the Bakken region. Electric fuel and purchased power prices remained elevated through January 2024. Montana-Dakota and MISO each filed a complaint with FERC against SPP, which were denied, along with rehearing requests which were also denied. In January 2025, Montana-Dakota and MISO each filed a petition for review of the FERC decision with the Eighth Circuit. Initial briefs with the Eighth Circuit were due June 25, 2025. To assist in the recovery of the higher electric fuel and purchased power costs, Montana-Dakota filed waiver requests with the NDPSC and SDPUC, which were approved deferring the increased costs to the annual fuel clause adjustment. In Montana, the waiver request is filed monthly and was unopposed by the MTPSC. Effective April 1, 2024, as approved by the NDPSC, Montana-Dakota started recovery in North Dakota of these increased costs over a period of two years rather than one year, which will lessen the impact to customers and allow more time for Montana-Dakota's FERC complaint to mature and have greater certainty of the outcome. In South Dakota and Montana, Montana-Dakota recovered these costs over a one-year period effective July 1, 2024. In July 2025, the NDPSC approved Montana-Dakota's request to defer external legal expenses related to this congestion litigation and record those deferred expenses into a regulatory asset.
Previous wording
The Company continues to proactively monitor and work with its manufacturers to reduce the effects of increased pricing and lead times on delivery of certain raw materials and equipment used in electric generation, transmission and distribution system and natural gas pipeline projects. Long lead times are attributable to increased demand for steel products from pipeline companies as they continue pipeline system safety and integrity replacement projects driven by PHMSA regulations, as well as delays in the manufacturing and shipping of electrical equipment and increased demand for electrical equipment due to regulatory activity and grid expansion. The Company has been able to minimize the effects by working closely with suppliers or obtaining additional suppliers, as well as modifying project plans to accommodate extended lead times and increased costs. The Company expects these delays and inflationary pressures to continue. The Company also continues to monitor the impact tariffs will have on its costs. Tariff increases on raw materials could negatively affect the Company's construction projects and maintenance work. For additional discussion regarding risks and uncertainties, see Part II, Item 1A. Risk Factors in this quarterly report and Part I, Item 1A. Risk Factors in the 2024 Annual Report.
Current wording
The Company continues to proactively monitor and work with its manufacturers to reduce the effects of increased pricing and long lead times on delivery of certain raw materials and equipment used in electric generation, transmission and distribution system and natural gas pipeline projects. Long lead times are attributable to increased demand for steel products from pipeline companies as they continue pipeline system safety and integrity replacement projects driven by PHMSA regulations, as well as delays in the manufacturing and shipping of electrical equipment and increased demand for electrical equipment due to regulatory activity and grid expansion. The Company has been able to minimize the effects by working closely with suppliers or obtaining additional suppliers, as well as modifying project plans to accommodate extended lead times and increased costs. The Company expects these delays and inflationary pressures to continue. The Company also continues to monitor the impact tariffs will have on its costs. Tariff increases on raw materials could negatively affect the Company's construction projects and maintenance work. For additional discussion regarding risks and uncertainties, see Part II, Item 1A. Risk Factors in this quarterly report and Part I, Item 1A. Risk Factors in the 2024 Annual Report.
Previous wording
The ability to grow through acquisitions is subject to significant competition and acquisition premiums. In addition, the ability of the segments to grow their service territory and customer base is affected by regulatory constraints, the economic environment of the markets served, population changes and competition from other energy providers and fuel. The construction of new electric generating facilities, transmission lines and other service facilities is subject to increasing costs and lead times, extensive permitting procedures, and federal and state legislative and regulatory initiatives, which may necessitate increases in electric energy prices. As the industry continues to expand the use of renewable energy sources, the need for additional transmission infrastructure is growing. As part of MISO's long range transmission plan, in August 2022, the Company announced its intent to develop, construct and co-own JETx with Otter Tail Power Company in central North Dakota. On October 6, 2023, the FERC issued an order approving the Company's request for CWIP Incentive Rate and Abandoned Plant Incentive treatment on this project. Montana-Dakota and Otter Tail Power Company received approval of a Certificate of Public Convenience and Necessity from the NDPSC on November 20, 2024 on this project.
Current wording
The ability to grow through acquisitions is subject to significant competition and acquisition premiums. In addition, the ability of the segments to grow their service territory and customer base is affected by regulatory constraints, the economic environment of the markets served, population changes and competition from other energy providers and fuel. The construction of new electric generating facilities, transmission lines and other service facilities is subject to increasing costs and lead times, extensive permitting procedures, and federal and state legislative and regulatory initiatives, which may necessitate increases in electric energy prices. As the industry continues to expand the use of renewable energy sources, the need for additional transmission infrastructure is growing. As part of MISO's long range transmission plan, in August 2022, the Company announced its intent to develop, construct and co-own JETx with Otter Tail Power Company in central North Dakota. In October 2023, the FERC issued an order approving the Company's request for CWIP Incentive Rate and Abandoned Plant Incentive treatment on this project. Montana-Dakota and Otter Tail Power Company received approval of a Certificate of Public Convenience and Necessity from the NDPSC in November 2024 on this project.
Previous wording
Three Months Ended March 31, 2025, Compared to Three Months Ended March 31, 2024 Electric earnings decreased $2.9 million as a result of:
Current wording
Three Months Ended June 30, 2025, Compared to Three Months Ended June 30, 2024 Electric earnings decreased $5.1 million as a result of:
Previous wording
•Depreciation and amortization increased $600,000, largely due to increased property, plant, and equipment balances as a result of transmission projects placed in service to improve reliability and update aging infrastructure.
Current wording
•Depreciation and amortization increased $1.1 million, largely due to increased property, plant, and equipment balances as a result of transmission projects placed in service to improve reliability and update aging infrastructure.
Previous wording
•Other income decreased $1.0 million, primarily resulting from lower returns on the Company's nonqualified benefit plan investments of $900,000.
Current wording
•Other income increased $700,000, primarily resulting from higher TSA income, as described above, and higher returns on the Company's nonqualified benefit plan investments.
Previous wording
•Income tax benefit increased $3.2 million, largely due to higher production tax credits of $2.0 million driven by higher wind production, and lower income before income taxes.
Current wording
•Income tax benefit increased $2.0 million, largely due to lower income before income taxes, and higher production tax credits of $400,000 driven by higher wind production.
Previous wording
▪Higher fuel and purchased power costs of $4.0 million recovered in customer rates and offset in expense, as described below.
Current wording
▪Higher fuel and purchased power costs of $2.2 million recovered in customer rates and offset in expense, as described below.
Previous wording
▪Higher retail sales volumes of $1.8 million, driven primarily by higher residential volumes, largely due to colder weather than last year, and higher commercial volumes from the data center as further discussed in the Outlook section.
Current wording
▪Higher retail sales volumes of $1.8 million, driven primarily by higher residential volumes, largely due to colder weather in the first quarter of the year, and higher commercial volumes from the data center as further discussed in the Outlook section.
Previous wording
▪Higher payroll-related costs of $1.5 million.
Current wording
▪Higher net transmission revenue of $1.5 million, including data center revenue.
Previous wording
◦Partially offset by lower renewable tracker revenues associated with higher production tax credits offset in income tax benefit, as described below.
Current wording
◦Partially offset by lower renewable tracker revenues, partly associated with higher production tax credits offset in income tax benefit, as described below.
Previous wording
•Electric fuel and purchased power increased $4.0 million, largely the result of higher retail sales volumes, partially offset by lower commodity prices.
Current wording
•Electric fuel and purchased power increased $2.2 million, largely the result of higher retail sales volumes, partially offset by lower commodity prices.
Previous wording
▪Higher contract services related to electric generation station outage-related costs of $1.3 million.
Current wording
▪Higher contract services related to electric generation station outage-related costs of $3.0 million.
Previous wording
•Taxes, other than income were comparable to the same period in the prior year.
Current wording
•Taxes, other than income was comparable to the same period in the prior year.
Previous wording
▪Higher purchased natural gas sold of $61.7 million, including net environmental compliance costs, as described below.
Current wording
▪Higher purchased natural gas sold of $2.4 million, including net environmental compliance costs, recovered in customer rates and offset in expense, as described below.
Previous wording
▪Higher transportation revenues of $900,000.
Current wording
▪Higher transportation revenues of $1.3 million.
Previous wording
▪Higher payroll-related costs of $1.0 million.
Current wording
▪Lower retail sales volumes of $1.0 million, which includes lower volumes to all customer classes, largely due to warmer weather in Idaho, offset in part by weather normalization and decoupling mechanisms in certain jurisdictions.
Previous wording
•Depreciation and amortization increased $600,000, of which $1.6 million resulted from increased property, plant, and equipment balances related to growth and replacement projects placed in service, partially offset by lower regulatory amortizations and lower depreciation rates implemented from rates cases in North Dakota, Montana and South Dakota of $400,000.
Current wording
•Depreciation and amortization increased $1.0 million, of which $1.6 million resulted from increased property, plant and equipment balances related to growth and replacement projects placed in service, partially offset by lower depreciation rates implemented from rates cases in North Dakota and Montana, and lower regulatory amortizations.
Previous wording
•Interest expense decreased $900,000, primarily from lower long-term interest expense, largely due to lower long-term debt balances.
Current wording
•Interest expense decreased $1.6 million, primarily from lower long-term interest expense, largely due to lower long-term debt balances.
Previous wording
Three Months Ended March 31, 2025, Compared to Three Months Ended March 31, 2024 Natural gas distribution earnings increased $4.6 million as a result of:
Current wording
Six Months Ended June 30, 2025, Compared to Six Months Ended June 30, 2024 Natural gas distribution earnings increased $2.3 million as a result of:
Previous wording
▪Rate relief of $6.8 million in Washington, Montana and South Dakota.
Current wording
▪Rate relief of $10.0 million, primarily in Washington, Montana and South Dakota.
Previous wording
▪Higher revenue-based taxes recovered in rates of $3.7 million offset in expense, as described below.
Current wording
▪Higher revenue-based taxes recovered in rates of $4.1 million offset in expense, as described below.
Previous wording
▪Higher retail sales volumes of $3.3 million, which includes higher volumes to commercial and residential customer classes, largely due to colder weather, offset in part by weather normalization and decoupling mechanisms in certain jurisdictions.
Current wording
▪Higher retail sales volumes of $2.3 million, which includes higher volumes to commercial and residential customer classes, largely due to colder weather in certain jurisdictions, and weather normalization and decoupling mechanisms in certain jurisdictions.
Previous wording
▪Higher conservation revenues of $1.7 million that were offset in expense, as described below.
Current wording
▪Higher conservation revenues of $2.0 million that were offset in expense, as described below.
Previous wording
•Purchased natural gas sold increased $61.7 million, largely due to net environmental compliance costs of $37.4 million, higher volumes of natural gas purchased of $20.8 million and higher commodity costs of $3.5 million.
Current wording
•Purchased natural gas sold increased $64.0 million, largely due to net environmental compliance costs of $47.6 million, higher volumes of natural gas purchased of $11.1 million and higher commodity costs of $5.3 million.
Previous wording
▪Higher conservation related costs which are recovered in rates, as discussed above.
Current wording
▪Higher conservation-related costs of $2.0 million which are recovered in rates, as discussed above.
Previous wording
•Taxes, other than income increased $3.0 million, primarily from higher revenue-based taxes, as described above.
Current wording
•Taxes, other than income increased $3.6 million, primarily from higher revenue-based taxes, as described above.
Previous wording
•Income tax expense increased $1.6 million, primarily the result of higher income before income taxes.
Current wording
•Income tax expense increased $1.2 million, primarily the result of a change in permanent tax adjustments and higher income before income taxes.
Previous wording
Existing and proposed emissions reduction plans from the EPA could require the owners of Coyote Station to incur significant new costs. The EPA's GHG and mercury emissions standards finalized in May 2024 would require additional pollution controls to operate beyond 2031 and 2027, respectively, with a potential extension to add pollution controls that may be granted. If the owners decide to incur such costs, the costs could, dependent on determination by state regulatory commissions on approval to recover such costs from customers, negatively impact the Company's results of operations, financial position and cash flows. In December 2024, the EPA issued a final decision on the NDDEQ's Regional Haze state implementation plan, maintaining the proposed disapproval of the state's conclusion that no additional controls are warranted during this implementation period. The EPA did not issue a federal implementation plan in place of the state plan and would have two years from state plan disapproval to either propose a federal plan or approve a new state plan. Coyote Station co-owners filed a petition for review with the Eighth Circuit Court of Appeals in January 2025, challenging EPA's NDDEQ state plan disapproval, and filed a petition for reconsideration with the EPA in February 2025. In March 2025, the EPA announced the agency is restructuring the regulations for implementing the Regional Haze Program. In March 2025, the Eight Circuit Court of Appeals granted a request by the EPA to hold the petition of review proceeding in abeyance for a period of 120 days so that the EPA could review the previous administration's findings and actions. The Company is one of four owners of Coyote Station and cannot make a unilateral decision on the plant's future; therefore, the Company could be negatively impacted by decisions of the other owners. The joint owners continue to collaborate in analyzing data and weighing decisions that impact the plant and its employees as well as each company's customers and communities served.
Current wording
The EPA's GHG and mercury emissions standards finalized in May 2024 would have required additional pollution controls for Coyote Station to operate beyond 2031 and 2027, respectively. In April 2025, the EPA granted a two year extension for Coyote Station to add pollution controls to comply with the mercury emissions standard. In June 2025, the EPA proposed rules to repeal both the mercury emissions standard and the electric generation GHG emissions standard. If the rules go into effect, it could require owners of Coyote station to incur significant new costs. These costs could, dependent on determination by state regulatory commissions on approval to recover such costs from customers, negatively impact the Company's results of operations, financial position and cash flows. In December 2024, the EPA issued a final decision on the NDDEQ's Regional Haze state implementation plan, maintaining the proposed disapproval of the state's conclusion that no additional controls are warranted during this implementation period. The EPA did not issue a federal implementation plan in place of the state plan and would have two years from the state plan disapproval to either propose a federal plan or approve a new state plan. Coyote Station co-owners filed a petition for review with the Eighth Circuit in January 2025, challenging EPA's NDDEQ state plan disapproval, and in February 2025, filed a petition for reconsideration with the EPA, which was granted in April 2025. In March 2025, the EPA announced the agency is restructuring the regulations for implementing the Regional Haze Program. In June 2025, the Eighth Circuit granted a request by the EPA to continue to hold the petition of review proceeding in abeyance so that the EPA could review the previous administration's findings and actions. The Company is one of four owners of Coyote Station and cannot make a unilateral decision on the plant's future; therefore, the Company could be negatively impacted by decisions of the other owners. The joint owners continue to collaborate in analyzing data and weighing decisions that impact the plant and its employees as well as each company's customers and communities served.
Previous wording
On February 13, 2025, Montana-Dakota entered into a definitive purchase and sale agreement with Badger Wind, LLC, a subsidiary of Orsted Onshore North America, LLC. Pursuant to the terms of the agreement, Montana-Dakota will purchase a 49 percent undivided ownership interest in a wind project being constructed and located in North Dakota that is anticipated to have a net generating capacity of approximately 250 MW for a purchase price of $294.0 million, which would represent 122.5 MW of wind generation to be owned by Montana-Dakota. The purchase agreement is contingent on regulatory approval from the NDPSC. This transaction would reduce Montana-Dakota's purchase requirements under the existing power purchase agreement with Badger Wind, LLC, dated November 4, 2024.
Current wording
In February 2025, Montana-Dakota entered into a definitive purchase and sale agreement with Badger Wind, LLC, a subsidiary of Orsted Onshore North America, LLC. Pursuant to the terms of the agreement, Montana-Dakota will purchase a 49 percent undivided ownership interest in a wind project being constructed and located in North Dakota that is anticipated to have a net generating capacity of approximately 250 MW for a purchase price of $294.0 million, which would represent 122.5 MW of wind generation to be owned by Montana-Dakota. The purchase agreement is contingent on regulatory approval from the NDPSC for Advance Determination of Prudence, for which a hearing is scheduled on September 9, 2025. This transaction would reduce Montana-Dakota's purchase requirements under the existing power purchase agreement with Badger Wind, LLC, dated November 4, 2024.
Previous wording
In March 2023, the Company began to provide power for Applied Digital's data center near Ellendale, North Dakota. At full capacity, the data center requires 180 MW of electricity, which is the equivalent of about 28 percent of the Company's generation portfolio. Applied Digital's load is purchased from the MISO market and does not impact other customers' power supply. An electric service agreement to serve an additional 350 MW data center load with Applied Digital in the Company's service territory was approved by the NDPSC. A portion of the additional data center load is expected to be online in 2025.
Current wording
In March 2023, the Company began to provide power for Applied Digital's data center near Ellendale, North Dakota. At full capacity, the data center requires 180 MW of electricity, which is the equivalent of about 28 percent of the Company's generation portfolio. Applied Digital's load is purchased from the MISO market and does not impact other customers' power supply. An electric service agreement to serve an additional 350 MW data center load with Applied Digital in the Company's service territory was approved by the NDPSC. 100 MW of the additional data center load is expected to be online in the fourth quarter of 2025.
Showing the first 40 of 68 pairs. Open the source sections for the rest.
Rearranged current paragraphs (19)
Current report — wording carried from elsewhere
•The earnings decrease at the pipeline business was driven by higher operations and maintenance expense, primarily attributable to payroll-related costs. The absence of proceeds received in 2024 from a customer settlement further drove the decrease. The business also incurred higher depreciation expense due to growth projects placed in service throughout 2024, and higher property tax accruals in certain jurisdictions. The decrease was offset in part by higher transportation revenue due to growth projects placed in service, as previously discussed, and customer demand for short-term natural gas transportation contracts.
Current report — wording carried from elsewhere
Six Months Ended June 30, 2025, Compared to Six Months Ended June 30, 2024 The Company's consolidated earnings decreased $65.6 million. The decrease in earnings is primarily due to the absence of income from discontinued operations in 2025.
Current report — wording carried from elsewhere
•As previously discussed, the Company was adversely impacted by the absence of income from discontinued operations in 2025.
Current report — wording carried from elsewhere
▪Lower fuel and purchased power costs of $1.8 million recovered in customer rates and offset in expense, as described below.
Current report — wording carried from elsewhere
▪Lower renewable tracker revenues associated with higher production tax credits offset in income tax benefit, as described below.
Current report — wording carried from elsewhere
▪Higher payroll-related costs of $3.5 million.
Current report — wording carried from elsewhere
•Depreciation and amortization increased $1.7 million, largely due to increased property, plant, and equipment balances as a result of transmission projects placed in service to improve reliability and update aging infrastructure.
Current report — wording carried from elsewhere
▪Higher transportation revenues of $2.2 million.
Current report — wording carried from elsewhere
▪Higher costs associated with MAOP projects.
Current report — wording carried from elsewhere
•Interest expense decreased $2.4 million, primarily from lower long-term interest expense, largely due to lower long-term debt balances.
Current report — wording carried from elsewhere
▪Increased usage of short-term natural gas transportation contracts of $700,000.
Current report — wording carried from elsewhere
◦Increased demand revenue, largely due to:
Current report — wording carried from elsewhere
▪Higher storage related revenue of $800,000.
Current report — wording carried from elsewhere
▪Partially offset by the expiration of certain contracts.
Current report — wording carried from elsewhere
◦Operation and maintenance increased $4.0 million.
Current report — wording carried from elsewhere
▪Higher other costs including insurance and contract services.
Current report — wording carried from elsewhere
•Depreciation and amortization increased $1.5 million driven largely by higher property, plant and equipment balances related to growth projects placed in service, as previously discussed.
Current report — wording carried from elsewhere
•Interest expense increased $700,000, primarily from higher debt balances to fund capital expenditures.
Current report — wording carried from elsewhere
•Income tax expense decreased $300,000, primarily from a decrease in the state effective tax rate largely due to growth in North Dakota.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Three Months Ended March 31, 2025, Compared to Three Months Ended March 31, 2024.