MDU's Investment in Wind Farm Deemed Prudent and Cost-Effective for Customers

Rhea-AI Summary

MDU Resources Group (NYSE: MDU) has received regulatory approval for its planned acquisition of a 49% ownership stake in the Badger Wind Farm. The North Dakota Public Service Commission (NDPSC) granted both an Advanced Determination of Prudence (ADP) and Certificate of Public Convenience and Necessity (CPCN) for the project.

The investment, valued at approximately $294 million, will give MDU a 122.5 MW stake in the 250 MW wind project near Wishek, North Dakota. The NDPSC has deemed the project prudent up to $295.5 million, including $1.5 million in internal costs. The wind farm is expected to be completed by the end of 2025, supporting MDU's commitment to providing cost-effective energy to its 1.2 million customers across the Pacific Northwest and Midwest.

Positive

• Regulatory approval secured for $294 million wind farm investment
• Project deemed prudent up to $295.5 million by NDPSC, providing regulatory certainty
• Will provide cost-effective energy to customers upon completion
• Expands renewable energy portfolio with 122.5 MW of wind power capacity

Negative

• Significant capital investment of $294 million required
• Project completion timeline risks extending beyond 2025

Insights

Utilities Regulatory Expert

NDPSC approval eliminates regulatory uncertainty for MDU's $294M wind investment, confirming its prudency within established cost parameters.

The regulatory approval secured by Montana-Dakota Utilities represents a significant de-risking event for MDU Resources' $294 million investment in the Badger Wind Farm. The Advanced Determination of Prudence (ADP) from North Dakota regulators effectively creates a regulatory shield around this capital deployment, establishing a $295.5 million prudency ceiling that includes $1.5 million in capitalized internal costs.

This preemptive regulatory blessing is particularly valuable in the utility sector, where retrospective prudency challenges can otherwise threaten cost recovery. The Certificate of Public Convenience and Necessity (CPCN) further solidifies the project's standing by formally recognizing it as necessary infrastructure, creating a dual layer of regulatory protection.

The timing of this approval is strategically advantageous, coming just months before the project's anticipated completion in late 2025. This positions MDU to begin rate-basing the asset promptly after completion, minimizing regulatory lag between capital expenditure and return generation. The 49% ownership structure suggests a partnership model that likely spreads development risk while maintaining significant operational control.

For a utility serving 1.2 million customers, the addition of approximately 122.5 MW of wind capacity represents a material expansion of renewable generation assets, supporting both regulatory compliance with clean energy mandates and potential long-term operating cost stability through fuel-free generation.

BISMARCK, N.D., Sept. 24, 2025 /PRNewswire/ -- MDU Resources Group, Inc. (NYSE: MDU) is pleased to announce that its subsidiary, Montana-Dakota Utilities Co. (MDU), was granted an Advanced Determination of Prudence (ADP) and Certificate of Public Convenience and Necessity (CPCN) by the North Dakota Public Service Commission (NDPSC) for MDU's planned acquisition of a 49% ownership interest in the Badger Wind Farm.

"Securing the ADP approval and CPCN from the NDPSC is a pivotal milestone in bringing cost-effective energy to our customers," said Nicole Kivisto, president and CEO of MDU Resources. "It validates our strategic investment in the Badger Wind Farm not only from a regulatory standpoint, but also in terms of long-term value."

The Badger Wind project is currently under construction near Wishek, North Dakota, and is anticipated to be complete near the end of 2025. As previously announced, the estimated investment for the project is approximately $294 million for a 122.5 MW stake in the net 250 MW wind project. The ADP issued by the NDPSC affirms that the Badger Wind project is prudent up to an investment of $295.5 million, including $1.5 million of internal costs capitalized as part of the project, providing a regulatory framework that supports the project's financial viability and long-term value to customers.

About MDU Resources Group, Inc.

MDU Resources Group Inc., a member of the S&P SmallCap 600 index, strives to deliver safe, reliable, affordable and environmentally responsible electric utility and natural gas distribution services to more than 1.2 million customers across the Pacific Northwest and Midwest. In addition to its utility operations, the company's pipeline business operates a more than 3,800-mile natural gas pipeline network and storage system, ensuring reliable energy delivery across the Northern Plains. With a legacy spanning over a century, MDU Resources remains focused on energizing lives for a better tomorrow. For more information about MDU Resources, visit www.mdu.com or contact the investor relations department at investor@mduresources.com.

Investor Contact: Brent Miller, treasurer, 701-530-1730
Media Contact: Byron Pfordte, director of integrated communications, 208-377-6050

Cautionary Note Regarding Forward-Looking Statements

This news release 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, capital expenditures, financial guidance, trends, objectives, goals, strategies, customer rates, regulatory approvals, sustainability, and other such matters, each of which is a forward-looking statement. These forward-looking statements are based on many assumptions and factors, which are detailed in the company's filings with the U.S. Securities and Exchange Commission.

While made in good faith, these forward-looking statements are based largely on the company's expectations and judgments and are subject to a number of risks and uncertainties, many of which are unforeseeable and beyond the company's control. For additional discussion regarding risks and uncertainties that may affect forward-looking statements, see "Risk Factors" disclosed in the company's most recent Annual Report on Form 10-K, and subsequent filings. Any changes in such assumptions or factors could produce significantly different results. Undue reliance should not be placed on forward-looking statements, which speak only as of the date they are made. Except as required by applicable law, the company undertakes no obligation to update the forward-looking statements, whether as a result of new information, future events, or otherwise.

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SOURCE MDU Resources Group, Inc.

FAQ

What is the size of MDU's investment in the Badger Wind Farm?

MDU is investing approximately $294 million for a 49% ownership stake (122.5 MW) in the 250 MW Badger Wind Farm project.

When will the MDU Badger Wind Farm project be completed?

The Badger Wind Farm project is expected to be completed by the end of 2025.

What regulatory approvals did MDU receive for the Badger Wind Farm?

MDU received an Advanced Determination of Prudence (ADP) and Certificate of Public Convenience and Necessity (CPCN) from the North Dakota Public Service Commission.

How many customers does MDU Resources serve?

MDU Resources serves more than 1.2 million customers across the Pacific Northwest and Midwest regions.

What is the total capacity of the Badger Wind Farm project?

The total capacity of the Badger Wind Farm is 250 MW, with MDU acquiring a 122.5 MW stake representing its 49% ownership.