MDU RESOURCES GROUP INC
For the period ended Mar 31, 2026. Filed May 7, 2026.
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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.
Mar 31, 2026 · Filed May 7, 2026
Extracted filing text, with the paragraph anchors used by the comparison.
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. Regulatory matters
Note 10 -Regulatory matters
Regulatory assets and liabilities
The following table summarizes the individual components of unamortized regulatory assets and liabilities:
| EstimatedRecovery or RefundPeriod as ofMarch 31, 2026 · * · March 31, 2026 · March 31, 2025 · December 31, 2025 | ||||
|---|---|---|---|---|
| (In thousands) | ||||
| Regulatory assets: | ||||
| Current: | ||||
| Environmental compliance programs | Up to 1 year | $92,143 | $56,441 | $78,784 |
| Conservation programs | Up to 1 year | 29,078 | 16,902 | 29,148 |
| Natural gas costs recoverable through rate adjustments | Up to 1 year | 23,899 | 51,321 | 22,897 |
| Decoupling mechanisms | Up to 1 year | 22,497 | 4,769 | 17,091 |
| Cost recovery mechanisms | Up to 1 year | 15,327 | 4,806 | 13,460 |
| Electric fuel and purchased power deferral | Up to 1 year | 3,163 | 7,109 | 6,902 |
| Other | Up to 1 year | 4,572 | 1,993 | 11,297 |
| 190,679 | 143,341 | 179,579 | ||
| Noncurrent: | ||||
| Pension and postretirement benefits | ** | 135,222 | 142,065 | 135,222 |
| Cost recovery mechanisms | Up to 23 years | 61,151 | 72,764 | 63,328 |
| Plant costs/asset retirement obligations | Over plant lives | 48,002 | 46,920 | 48,352 |
| Manufactured gas plant site remediation | - | 28,466 | 27,443 | 28,411 |
| Taxes recoverable from customers | Over plant lives | 12,145 | 12,228 | 12,250 |
| Covid-19 deferred costs | Up to 2 years | 3,637 | 3,926 | 3,761 |
| Long-term debt refinancing costs | Up to 37 years | 1,657 | 1,865 | 1,799 |
| Other | Up to 13 years | 3,693 | 4,797 | 4,095 |
| 293,973 | 312,008 | 297,218 | ||
| Total regulatory assets | $484,652 | $455,349 | $476,797 | |
Index
| EstimatedRecovery or RefundPeriod as ofMarch 31, 2026 · * · March 31, 2026 · March 31, 2025 · December 31, 2025 | ||||
|---|---|---|---|---|
| (In thousands) | ||||
| Regulatory liabilities: | ||||
| Current: | ||||
| Environmental compliance programs | Up to 1 year | $90,692 | $65,680 | $89,306 |
| Natural gas costs refundable through rate adjustments | Up to 1 year | 35,288 | 46,744 | 47,130 |
| Demand Charges | Up to 1 year | 9,684 | 10,000 | — |
| Margin sharing | Up to 1 year | 3,895 | 3,562 | 3,946 |
| Taxes refundable to customers | Up to 1 year | 2,228 | 2,087 | 2,301 |
| Conservation programs | Up to 1 year | 1,103 | 2,782 | 733 |
| Provision for rate refund | Up to 1 year | 1,062 | 3,833 | 1,780 |
| Other | Up to 1 year | 4,457 | 5,477 | 3,388 |
| 148,409 | 140,165 | 148,584 | ||
| Noncurrent: | ||||
| Plant removal and decommissioning costs | Over plant lives | 227,100 | 221,349 | 224,313 |
| Taxes refundable to customers | Over plant lives | 173,860 | 182,742 | 176,665 |
| Cost recovery mechanisms | Up to 16 years | 43,896 | 33,373 | 41,323 |
| Accumulated deferred investment tax credit | Over plant lives | 22,607 | 19,301 | 22,663 |
| Pension and postretirement benefits | ** | 4,776 | 4,862 | 4,776 |
| Other | Up to 12 years | 2,718 | 2,252 | 2,589 |
| 474,957 | 463,879 | 472,329 | ||
| Total regulatory liabilities | $623,366 | $604,044 | $620,913 | |
| Net regulatory position | $(138,714) | $(148,695) | $(144,116) | |
*Estimated recovery or refund period for amounts currently being recovered or refunded in rates to customers.
** Recovered as expense is incurred or cash contributions are made.
As of March 31, 2026 and 2025, and December 31, 2025, approximately $175.7 million, $179.3 million and $174.3 million, respectively, of regulatory assets were not earning a rate of return but are expected to be recovered from customers in future rates. These assets are largely comprised of the unfunded portion of pension and postretirement benefits, asset retirement obligations, estimated future cost of manufactured gas plant site remediation and certain pipeline integrity cost recovery mechanisms.
The Company is subject to environmental compliance regulations in certain states which require natural gas distribution companies to reduce overall GHG emissions to certain thresholds as established by each applicable state. Compliance with these standards may be achieved through increased energy efficiency and conservation measures, purchased emission allowances and offsets and purchases of low carbon fuels. Emission allowances are allocated by the respective states to the Company at no cost, of which a portion is required to be sold at auction in certain states. The compliance costs for these regulations and the revenues from the sale of the allocated emissions allowances are passed through to customers in rates and the Company has, accordingly, deferred the environmental compliance costs as a regulatory asset and proceeds from the sale of allowances as a regulatory liability.
If, for any reason, the Company's regulated businesses cease to meet the criteria for application of regulatory accounting for all or part of their operations, the regulatory assets and liabilities relating to those portions ceasing to meet such criteria would be written off and included in the statement of income or accumulated other comprehensive loss in the period in which the discontinuance of regulatory accounting occurs.
Regulatory proceedings
The Company regularly reviews the need for electric and natural gas rate changes in each of the jurisdictions in which service is provided. The Company files for rate adjustments to seek recovery of operating costs and capital investments, as well as reasonable returns as allowed by regulators. Certain regulatory proceedings and cases may also contain recurring mechanisms that can have an annual true-up. Examples of these recurring mechanisms include: infrastructure riders, transmission trackers, renewable resource cost adjustment riders, as well as weather normalization and decoupling mechanisms. The Company is unable to predict the ultimate outcome of these matters, the timing of final decisions of the various regulators and courts, or the effect on the Company's results of operations, financial position or cash flows.
Index
The following table summarizes the Company's significant regulatory proceedings and cases by jurisdiction:
| Segment | State | Filing Date | Annual Revenue Increase (%) * | Annual Revenue Increase (In millions) * | ROE | Status | Key Drivers and Additional Information |
|---|---|---|---|---|---|---|---|
| General Rate Cases Pending | |||||||
| Electric | Montana | September 30, 2025 | 20.2% | $14.1 | 10.8% | PendingInterim rate increase of $10.4M or 16.2% effective April 1, 2026 | •Investments, including Badger Wind Farm•Corresponding depreciation on those investments•Increased operation and maintenance expense |
| Natural Gas Distribution | Oregon | November 25, 2025 | 15.8% | $16.4 | 10.4% | Pending | •Rate base growth•Growth in operations and maintenance expense•Growth in depreciation expense associated with new investments in rate base |
| General Rate Cases Finalized | |||||||
| Natural Gas Distribution | Washington | March 29, 2024 | Rate Year 17.9%Rate Year 22.6% | Rate Year 1$29.8Rate Year 2$10.8 | 9.5% | Approved February 24, 2025Final rates effective March 5, 2025$3.7M revenue reduction effective June 1, 2025Final rates effective March 1, 2026Filed for a $2.1M revenue reduction effective June 1, 2026 | •Multi-year rate case•Infrastructure investments necessary to provide safe and reliable service•Higher operating costs due to inflation•$3.7M revenue reduction was driven by forecasted plant that was not placed in service by December 31, 2024•$2.1M revenue reduction was driven by forecasted plant that was not placed in service by December 31, 2025 |
| Electric | Wyoming | June 30, 2025 | 18.6% | $5.8 | 9.7% | ApprovedFinal rates effective April 1, 2026 | •Increases in operation and maintenance expense•Investments made since the last rate case•Corresponding depreciation on those infrastructure investments•Withdrew the requested Reliability and Safety Rider |
| *Annual revenue increase and percent increase for general rate cases pending and general rate cases finalized, reflects the final approved amount or the amount reflected in the most recent settlement agreement, if applicable.**Reflects a reduction to revenues resulting from a provisional plant review. The adjustment applies retroactively to the original rate effective date. As a result, the Company is required to refund customers for amounts overcollected during the retroactive period. | |||||||
| Segment | State | Filing Date | Annual Revenue Increase (In millions) | Status | Key Drivers and Additional Information |
|---|---|---|---|---|---|
| Other Filings | |||||
| Natural Gas Distribution | Wyoming | August 15, 2025 | N/A | Pending | System Safety and Integrity Rider•Would allow Montana-Dakota to recover costs and expenses associated with a pipeline replacement program |
| Electric | Montana | September 30, 2025 | N/A | Pending | Systems Management Cost Adjustment Mechanism•Recovery of transmission and wildfire related costs |
| Electric | South Dakota | October 31, 2025 | $1.1 | Pending | Infrastructure Rider•Allows annual adjustments for recent projected capital costs and related expenses for projects determined to be recoverable•Update includes Badger Wind Farm |
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