MDU Resources Group - Earnings Call - Q1 2025

Executive Summary

• Q1 2025 was a clean beat versus Street: diluted EPS from continuing operations of $0.40 vs consensus $0.363*, and revenue of $674.8M vs consensus $653.1M*; strength came from record pipeline earnings (+13.9% YoY) and rate relief plus colder weather at gas distribution.
• EPS guidance for FY 2025 was affirmed at $0.88–$0.98; management reiterated long-term targets: 7–8% rate base CAGR, 6–8% EPS CAGR, and a 60–70% payout ratio.
• Electric utility earnings fell to $15.0M (from $17.9M) despite a 25.1% surge in retail volumes, as outages and higher O&M costs offset volume gains; data center load under ESAs reached 180 MW online with more to come.
• Cash flow from operations improved to $217.5M (+32% YoY), supporting capex and balance sheet flexibility; no 2025 equity needs, but ATM program likely reestablished for 2026+.
• Near-term catalysts: continued rate case progress (WA, MT, WY, ID), pipeline storage expansion (Baker) and Bakken East commercial development; affirmed guidance reduces downside estimate risk.

What Went Well and What Went Wrong

What Went Well

• Pipeline segment posted record Q1 earnings of $17.2M (+13.9% YoY), driven by growth projects (Wahpeton, Line Section 27) and strong short-term firm capacity and storage demand.
• Natural gas distribution earnings rose 11.5% to $44.7M on broad-based rate relief in WA/MT/SD and colder weather boosting volumes; customer count +1.5% YoY.
• Management reaffirmed FY25 EPS guidance and long-term growth framework; “We are well positioned for growth… anticipated capital investment of $3.1 billion over the next five years, 7% to 8% compound annual utility rate base growth… long-term EPS growth rate of 6% to 8%”.

What Went Wrong

• Electric utility earnings fell to $15.0M (from $17.9M) despite strong volumes; outages at Coyote Station and Wygen III and higher O&M (contract services, software, insurance, payroll) pressured results.
• Lower returns on nonqualified benefit plan investments reduced segment earnings across the portfolio (~$0.01 per share impact for the organization, per CFO).
• Comparability noise from discontinued operations (Everus spin-off Oct 31, 2024) affected YoY net income optics; prior periods restated, with discontinued ops contributing in Q1 2024.

Transcript

Operator (participant)

My name is Ina, and I will be your conference facilitator. At this time, I would like to welcome everyone to the MDU Resources Group 2025 First Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer period. If you would like to ask a question during this time, simply press Star then the number 1 on your telephone keypad. If you would like to withdraw your question, press Star 2 on your telephone keypad. The webcast can be accessed at www.mdu.com. Under the Investors heading, select Events and Presentations, and pick Q1 2025 Earnings Conference Call. After the conclusion of the webcast, a replay will be available at the same location. I would now like to turn the conference over to Jason Vollmer, Chief Financial Officer of MDU Resources Group. Thank you, Mr. Vollmer.

You may begin your conference.

Jason Vollmer (CFO)

Thank you, Operator. I would like to welcome everyone to our First Quarter 2025 Earnings Conference Call. You can find our earnings release and supplemental materials for this call on our website at www.mdu.com under the Investors tab. Leading today's discussion along with me is Nicole Kivisto, President and CEO of MDU Resources. During our call, we will make certain forward-looking statements within the meaning of the Federal Securities Laws. For more information about the risks and uncertainties that could cause our actual results to vary from any forward-looking statements, please refer to our most recent SEC filings. I will provide consolidated financial results later during the call, but first, we will turn the call over to Nicole for her remarks. Nicole?

Nicole Kivisto (CEO)

Thank you, Jason. Thank you, everyone, for joining us today and for your continued interest in MDU Resources. We are off to a strong start in 2025. This morning, we reported income from continuing operations of $82.5 million, or $0.40 per share for the first quarter, a 10.4% increase compared to this time last year. Our pipeline and natural gas distribution segments grew earnings by 13.9% and 11.5%, respectively, year-over-year, driving our solid first quarter performance. I am extremely proud of our employees whose dedication to our core strategy continues to deliver exceptional performance and positions MDU Resources with compelling long-term growth prospects. Our utility experienced 1.4% combined retail customer growth compared to a year ago, which is in line with our 1%-2% annual projected growth rate.

This growth reinforces our need to invest in our utility infrastructure to meet the demands of our growing customer base. At our electric segment, we signed a purchase agreement to acquire a 49% ownership interest in the Badger wind farm during the quarter, which equates to 122.5 MW of the project's total 258 MW of generation capacity. The purchase is contingent on certain regulatory approvals, and we have filed an advanced determination of prudence with the North Dakota Public Service Commission for this project. We also anticipate filing general rate cases in Montana and Wyoming at our electric segment yet this year. From a legislative perspective, wildfire prevention and liability limitation bills have passed in three of our four electric states: Wyoming, North Dakota, and Montana. While we remain focused on designing processes to prevent wildfires in our service territory, this legislation provides greater certainty going forward and limits liability.

We continue to see data center opportunities, including the 580 megawatts of data center load we have under signed electric service agreements. Of that total, 180 megawatts is currently online, with an additional 100 megawatts expected to come online late this year and the balance expected to continue through the next few years. Our current approach is to serve these large customer opportunities with a capital-light business model, which not only benefits our earnings and returns but also provides cost savings to our other retail customers. At our natural gas distribution segment, rate relief was a strong contributor to the quarterly results. In Washington, we received a final order approving our multi-year rate case, with year one rates effective March 5, 2025, and year two rates effective March 1, 2026.

Subsequently, we did file a revision to decrease revenue slightly due to forecasted plant that was not placed in service by December 31, 2024. In Montana, we received approval of interim rates effective February 1 and also filed a settlement agreement on April 3, 2025. In Wyoming, we have reached a settlement in principle in our rate case there and anticipate filing that settlement in the near term. We also anticipate filing a general rate case in Idaho yet in the second quarter. Moving on to our pipeline segment, we achieved record first quarter earnings, up 13.9% from the first quarter of 2024. The segment is executing well on our core strategy and delivering strong results, driven by strategic expansion and increased demand for transportation and storage services.

We remain committed to investing in future expansion projects to meet increasing customer demand for services, including strong interest from industrial customers and power generation projects. In January 2025, we completed a non-binding open season for our proposed Bakken East pipeline project that could run approximately 375 mi from the Bakken region to eastern North Dakota. This project would provide much-needed takeaway capacity to meet the forecasted natural gas production growth in the region and provide natural gas transportation service to industrial, power generation, and local distribution companies. Currently, we are engaged in planning and discussions with potential customers and landowners along the proposed route, and we are targeting an in-service date of late 2029 for the first phase of this project and late 2030 for the second phase.

As a reminder, this project is not currently in our five-year capital forecast and would be incremental should we determine to proceed. Additionally, in April, we announced a binding open season for the Baker storage field enhancement and transportation expansion project. The proposed project could add 72 million cubic feet per day of new firm natural gas storage deliverability and transportation service. The open season runs through May 20, 2025. Looking at the full year for MDU Resources, we are affirming our earnings per share guidance in the range of $0.88-$0.98 per share. This range reflects continued strong performance across our segments coming off a strong first quarter. As we look ahead, we are focused on our core strategy, which emphasizes customers and communities, operational excellence, returns focus, and employee-driven.

We believe we are well positioned for growth into the future with anticipated capital investment of $3.1 billion over the next five years, 7-8% compound annual utility rate base growth, and customer growth expected in the 1-2% range annually. We also anticipate a long-term EPS growth rate of 6-8% while targeting a 60-70% annual dividend payout ratio. As always, MDU Resources is committed to operating with integrity and with a focus on safety. We remain dedicated to delivering value as a leading energy provider and employer of choice. I will now turn the call back over to Jason for the financial update. Jason.

Jason Vollmer (CFO)

Thank you, Nicole. I'm pleased to share the details of our first quarter results. This morning, we announced first quarter earnings of $82 million, or $0.40 per diluted share, compared to first quarter 2024 earnings of $100.9 million, or $0.49 per diluted share. First quarter income from continuing operations was $82.5 million, or $0.40 per share, compared to $74.7 million, or $0.37 per share in the prior year. As we look at our individual businesses, our electric utility reported first quarter earnings of $15 million, compared to $17.9 million for the same period in 2024. Retail sales revenue increased due to higher volumes for residential customers due to colder weather and from higher data center volumes.

This increase was more than offset by higher operation and maintenance expense, largely from higher contract services for outage-related costs at two electric generating stations, increased software and insurance expenses, and higher payroll-related costs. Lower returns on non-qualified benefit plan investments also impacted results. Our natural gas utility segment reported earnings of $44.7 million in the first quarter, an 11.5% increase over the first quarter of 2024, which was $40.1 million. The 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 and lower investment returns on non-qualified benefit plans. The pipeline segment posted record first quarter earnings of $17.2 million, compared to $15.1 million in the first quarter last year.

The earnings increase 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. Partially offsetting the increase was higher operation and maintenance expense, primarily higher payroll-related costs. The business also incurred higher depreciation expense due to the growth projects we previously discussed and lower investment returns on non-qualified benefit plans. Finally, MDU Resources continues to manage a strong balance sheet and maintain ample access to working capital to finance its operations throughout our peak seasons. While we have no equity needs in 2025 based on our current capital plan, our $3.1 billion capital investment program over the next five years will likely require some access to the equity capital markets. As such, we plan to reestablish an ATM program in the near term to meet those future needs.

Business momentum is strong as we close out the first quarter of 2025, and we will continue to provide updates regarding our 2025 guidance and outlook as we progress throughout the year. That summarizes the financial highlights for the quarter. We appreciate your interest in and commitment to MDU Resources and ask that we now open the line for questions. Operator?

Operator (participant)

Thank you. At this time, I would like to remind everyone, if you would like to ask your question, please press star then the number one on your telephone keypad. If you would like to withdraw your question, please press star then the number two. If you are on a speakerphone, please place the handset before pressing any keys. We'll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Chris Ellinghaus from Siebert Williams Shank. Please go ahead.

Chris Ellinghaus (Managing Director and Equity Analyst)

Hey, everybody. How are you?

Nicole Kivisto (CEO)

We're.

Chris Ellinghaus (Managing Director and Equity Analyst)

Nicole, the large customer load strategy that you guys are deploying, being capital-light, are the rates that you're or the tariffs that you're seeing demanded from the large customers not accretive for new resources in what you're seeing?

Nicole Kivisto (CEO)

Yeah. Good afternoon, Chris, and thanks for the question. As we think about our opportunity on the data center front, I would describe what we have right now in terms of the 580 megawatts of ESAs. 530 of that is in our Ellendale location. There was really a unique opportunity there to serve that load in a capital-light manner because we had a situation where there was basically a constrained area or a pocket within our system where there was generation that was not getting to market.

How I would describe that opportunity is it was best for us to think about that on a capital-light manner because, one, it was accretive incrementally right away, as I mentioned in the script, to our earnings and ROE, but also provided benefit because that transmission then cost was shared with this large customer, and that benefit then went back to our retail customer base. That strategy in that particular pocket was the right strategy for that time. What I will say is we continue to evaluate in conversations with other customers if it would make sense to look at incremental generation. Of course, that is going to have to make sense for us financially. It'll have to make sense for our regulators and also certainly not have impact to our overall retail customer base.

We continue to look for opportunities to think differently going forward, but currently, today, we like the model that we have.

Chris Ellinghaus (Managing Director and Equity Analyst)

Okay. There is an awful lot of potential disruption to the economy. Have you got any thoughts that certainly there is some potential disruption to the Bakken, certainly with the oil prices where they are and the type of oil resource that the Bakken is? Have you got any thoughts on how it might affect particularly North Dakota?

Nicole Kivisto (CEO)

Yeah. I would say overall, Chris, the way we look at the Bakken play is this is a long-term play. I guess what I would describe as a couple of things in terms of how that relates to MDU Resources in total. One would be, and we've shared in the past with investors, how you look at that gas-to-oil ratio increasing over time. It certainly is an oil play. It's very important to the state of North Dakota. As you can imagine, the state is very interested in the Bakken region in totality. As it relates specifically to MDU Resources, one of the things that we see is that there is more need for takeaway capacity. We've talked to investors about that in the past. One of the drivers is because the gas-to-oil ratio has been increasing over time.

Yes, the pricing environment does ebb and flow, but we do believe long-term in what's happening in the Bakken and believe that there are long-term benefits, not only producer push benefits from, but customer pull. Industrial demand has increased. We've talked about natural gas fire generation being a driver for growth in the future. All of those fundamentals we still think hold.

Chris Ellinghaus (Managing Director and Equity Analyst)

Okay. So your thought is the gas side is, at least in the long term, more of an offset to whatever kind of pressures there might be on oil in the near term?

Nicole Kivisto (CEO)

Yeah. For the most part, I would say you summarized that right. I mean, yep. Go ahead, Jason. Were you going to add to that?

Jason Vollmer (CFO)

Yeah. I was going to say, certainly, even if the projections that we see from whether it's North Dakota Pipeline Authority or other places would show that even if oil stays relatively flat, so again, not a lot of drilling, you're going to see the gas-to-oil ratio continue to climb where gas continues to be a benefit here. Again, gas is not the target in the Bakken. Oil is the target. That does have some impact on the capital dollars flowing into drilling opportunities. Gas is an ever-increasing commodity being produced in the Bakken, and we think that's going to provide long-term benefits both for our pipeline business and our utility customers with a low-cost source of natural gas.

Chris Ellinghaus (Managing Director and Equity Analyst)

Sure. There is also some concern about sort of housing starts, and I guess that is really more of a residential type of concern. Just thinking about your service areas and what might be impacted, I was kind of curious your thoughts on this. One of your higher growth areas is Boise. Just given the type of economic development in Boise, would you be thinking that that area is somewhat insulated from economic sensitivity given the types of large customer growth that is taking place there and therefore the residential growth that you benefit from might be more or less economically sensitive?

Nicole Kivisto (CEO)

Yeah. I would say that's fair. I mean, Chris, the way I would look at this is over time, as we think about the customer growth rate, whether, and again, I would say we look at this from an overall perspective, we have been riding in that range of 1-2%. Within that 1-2%, and that has carried through periods of slowdown and acceleration. Economic conditions obviously do matter. I would say fundamentally, we have been able to kind of stay within that range. Now, as it relates to Idaho specific, you are correct. We have, as we've thought about that market, we have certainly seen that as being one of the faster-growing areas within our service territory.

That has ebbed and flowed a little bit but continues to rise to the top in terms of one of our higher customer addition areas. That all being said, as you know, rate base is also certainly a consideration as we think about earnings potential within the utility. I would take you back to, as we think about our ability to grow rate base within our utility, we're still very focused on achieving that 7-8% rate base growth, which ultimately drives earnings growth as we think about the forward look.

Chris Ellinghaus (Managing Director and Equity Analyst)

Okay. That's helpful. Jason, can I ask you sort of an accounting question here? In your restated number versus last year's reported, obviously, you're pulling out construction services as discontinued. What else goes in there? I mean, we can do the math of pulling out what you reported for construction services last year, but it's incremental to that. What's the incremental part versus what you on a reported basis last year?

Jason Vollmer (CFO)

Yeah. If we look back to last year, there's a couple of things when you look at the restated number. It would be accounting for, as you mentioned, Everest being pulled out as a discontinued operation. We would also have probably some costs still continuing as we went through the process of separating Knife River the year before that some of that would flow through as continuing or discontinued operations in the prior year. Even going back as far as when we separated previous businesses before like Fidelity, if you remember that part of the business in the past, there are a few things that end up in discontinued operations that flow through those numbers. The bulk of what's there is going to be Everest-related.

I think if you look at just the regulated energy delivery earnings we posted last year and divided that out by our number of shares, it would have gotten you in that probably $0.35, $0.36 range per share. Our number that we're showing now is $0.37 for the prior year. So there's not a lot of impacts in there outside of the Everest transaction being the biggest piece of it.

Chris Ellinghaus (Managing Director and Equity Analyst)

Is any portion of that your assessment of the dis-synergies of the separation?

Jason Vollmer (CFO)

No. The disenergies, actually, those are costs that would end up flowing through O&M on the remaining businesses here. So that actually is in continuing operations and is reflected in the $0.40 that we showed for the quarter here this 2025.

Chris Ellinghaus (Managing Director and Equity Analyst)

All right. That's what I wanted to figure out. Okay. Thanks so much for the details, guys. Appreciate it.

Jason Vollmer (CFO)

Thanks, Chris.

Nicole Kivisto (CEO)

Thank you.

Operator (participant)

Thank you. Your next question comes from the line of Julian Dumoulin-Smith from Jefferies. Please go ahead.

Brian Russo (Managing Director and Senior Equity Research Analyst)

Yeah. Hi. It's Brian Russell on for Julian.

Nicole Kivisto (CEO)

Hello, Brian.

Brian Russo (Managing Director and Senior Equity Research Analyst)

Hello. Hey, we could just focus on the electric segment first. The earnings were down year-over-year, yet you did report retail electric volumes up 25%. I was just wondering if maybe we could unpack kind of the positive drivers like sales versus some of the negative drivers like the outages and maybe quantify what the lower returns on the non-qualified plants look like. It just seemed like retail volumes were so strong that I'm surprised it was down as much as it was year-over-year.

Jason Vollmer (CFO)

Yeah. Thanks, Brian. I can jump in and field some of those, and we'll quantify some as we can along the way here. For the most part, if you look at the electric on a year-over-year basis, if you think back to our previous few years, we've been through a lot of rate case activity on the electric side of the business. We really did not have much of that that would have been incremental in Q1 of this year, right? Those rates were primarily put in effect in prior years. We did not have a significant amount of what I'll call regulatory rate relief in Q1 versus prior year on that one. What we did have is, of course, some higher O&M, which you would expect as we've seen payroll increases and just general cost increases along the way.

Some of that O&M was related to the generating station outages, as you mentioned as well. I can cover off on that in a minute. I think, generally speaking, if you look at the increase in volume, you may remember last year in the first part of the year, our data center customer, the 180 MW that is currently in service, was not online at that point in time. They had some outages on their end, so they were not taking as much power. A lot of that retail electric volume increase was really that data center now being online for the full first quarter where it had not been for the first quarter and actually a little bit in the second quarter last year as well.

As far as the outages that we saw, we did have a planned outage in our estimates this year as we thought about setting guidance. That was for our Kyle station. That was an outage that we knew was going to have some sort of an impact for us here as we went through the year and really probably largely gets completed by the end of Q2. The other one was an unplanned outage, actually, at the coal facility that we have with Basin Electric Power Cooperative. That was, again, unplanned outage. We had a little bit of an impact from there. All of those things, though, I think as we set our guidance earlier in the year and as we have reaffirmed our guidance range here today, those were all included in those numbers. Did not expect to see a big impact.

The other item that you had asked about was the non-qualified benefit plan. Again, if you remember, the equity markets in the first part of last year had an equity and debt markets, I guess probably had a pretty strong return profile. There are some assets set aside here to cover liabilities for these non-qualified plans that we do end up seeing some income statement impact to. What we really saw was just a different performance in the investments in the first quarter here than we saw in the first quarter of last year. Not a significant impact. If you would see it as a driver in each of the segments, it was quantified probably in total somewhere in the neighborhood of a penny per share for the entire organization, not just for electric, but across all of our segments.

Overall, I guess not significantly different than what we would have seen previously. Hopefully that answers your question.

Brian Russo (Managing Director and Senior Equity Research Analyst)

Yes. That's helpful. Just to maybe follow on, now that you have the 180 MW from Applied Digital online for the year, of course, is North Dakota in the sharing band this year versus not last year while that ESA volumes ramped up?

Jason Vollmer (CFO)

Yeah. Our ESA does have a band around sharing. I would hesitate to give you an answer on that right now because it really will depend on how our performance is throughout the year, not just on a quarter-by-quarter basis. We do an annual filing on that with the state as we look through that piece. Depending on performance of the electric throughout the year, we can probably update you with that later in the year. We have not been in a situation in prior years where we have had to share some with the state of North Dakota, which again is a good measure for those that may not be familiar. If we get above a 10% ROE, we end up having to share some of that back with our customers, and we get to keep a portion of that as well.

That's a good position to be in, and we have been in that in the past. Whether we're going to be in there in 2025 or not yet to be determined.

Brian Russo (Managing Director and Senior Equity Research Analyst)

Okay. Great. On the Bakken, I'm sorry, the Pipeline Segment and the Bakken East project, are you more confident in that and successful development following the conclusion of the open season? What are the next milestones, assuming a late 2029 and 2030 phase one, phase two start?

Nicole Kivisto (CEO)

Yeah. I would characterize it as conversations continue. You heard us on last quarter a call talk about that we continue conversations with customers, and that is certainly what we are doing. Those conversations will really inform us in terms of overall route timing, etc. I would characterize it probably as we did really last quarter. We're encouraged by the feedback that we're getting from customers. On the same token, we want to be mindful of making sure that we continue to work with them on overall route design, etc. That's how I would summarize it. I think what I would say, though, is we like our strategic position in terms of our pipeline, our access to storage, our access to other pipelines as well. More to follow as we know more.

As I mentioned previously, this is not currently in our five-year capital forecast. To the extent that we get new information and get more clarity here, we will certainly be providing that to investors as we move forward.

Brian Russo (Managing Director and Senior Equity Research Analyst)

Okay. Great. Thank you very much.

Operator (participant)

Thank you. As a reminder, if you would like to ask a question, please press star then the number one on your telephone keypad. To withdraw your question, please press star then the number two. If you are using a speakerphone, please flip the handset before pressing any keys. Your next question comes from the line of Fran Levin from Citi. Please go ahead.

Ryan Levine (Equity Analyst)

Hi, everybody. A couple of questions.

Nicole Kivisto (CEO)

Good afternoon.

Ryan Levine (Equity Analyst)

On Bakken East, recognizing production outlooks continue to evolve and you did the open season in January, would there be a more comprehensive or an updated open season anticipated, or do you think these more bespoke one-off conversations are enough to inform your commercial project?

Jason Vollmer (CFO)

Yeah. Ryan, I can jump in here a little bit, and Nicole can certainly add in along the way too. I think this is the next step, right? We are really working with the individuals that responded, the companies that responded to our original open season to really understand what's the timing, what's the need, what's the amount that they may be looking at for deliverability. It would proceed to more of a formal agreement after that. Whether we actually go forward with a binding open season or whether we actually move forward with new precedent agreements in some cases with various parties, those are things that would happen down the road.

Right now, I think this is really setting the stage, but eventually, we'll want to get to a point where we have a route, we have a design, we have a size, we have kind of a final cost estimate that we'd look at, which gets us to being able to really enter into firm agreements here and then being able to subsequently file for work approval at some point in the future as well.

Ryan Levine (Equity Analyst)

What role do the recent tariffs play in terms of the commercial attractiveness of Bakken East? How material are the current tariff proposals or current tariffs that are in place to the cost structure for that project?

Jason Vollmer (CFO)

Yeah. If we look at the current tariffs today, and again, it's early in the trade discussions process right now, and certainly tariffs, I mean, I think there were announcements today. I haven't had a chance to catch up yet, but as far as potential deals getting done in certain areas, it's early in that process. I would say this. When you look at a large project like this, there's a lot of components to it, right? There is securing right of way. There is engineering and design, some of those things we can do in-house. Some will have to hire third parties. The materials piece of that is certainly an important part of that.

Even with some tariffs on a piece of the materials, pipe as an example, or whatever the measurement items would be that go along with that, that will have some impact, but it's probably something we can plan for and design around as we look at that and be able to get final numbers in place to put in front of someone for an approval. Do not see that as something that would derail the project as we look at it today.

Ryan Levine (Equity Analyst)

Okay. In terms of wildfire legislation in some of the states that you operate, how do you see that impacting or potential legislation impacting future wildfire mitigation plans or any type of de-risking effort that the company may be pursuing?

Nicole Kivisto (CEO)

Yeah. Good question, Ryan. Essentially, as I mentioned on the call, we did get legislation passed in three of our states. I would say as it relates to our mitigation plans, the company certainly was already proactive and had plans in place to do what we could to prevent on an overall basis. What I see in terms of the benefits of this legislation really is going to be that we can formalize those plans more officially with folks. Obviously, that formalization of the plan is dependent on the state. State by state, I could talk to you about that. There is a little bit of variation between the states. Once we have done that, that kind of proves to that regulatory body that we have done our part. Ultimately, the benefit gets to limiting liability if something were indeed to happen.

Our first and most biggest priority, I guess I should say, would be prevention in the first place. The company is active in doing what we can there.

Ryan Levine (Equity Analyst)

Great. Just two quick clarifying questions. I think it was mentioned, the potential ATM filing. Is there a size anticipated? In terms of your 6%-8% EPS growth, what's your starting point that you're growing off of? Is that actual 2024, or could you just clarify the starting point for the long-term growth rate?

Jason Vollmer (CFO)

Yeah. No, that's a great question. I'll start with the ATM question first. We have not determined a size yet. Again, we are working through that process. We're looking forward to future needs. Right now, our current capital plan would show we do not have any equities in 2025. We would see some potentially starting in 2026, as we've talked about before. As we look through, typically an ATM program has probably got about a three-year time horizon to it. We'd try to size it to an appropriate amount to maybe offset our needs during that time period. That's yet to be determined. We'll follow up with public filings on that later this year. The second question on the 6%-8% long-term growth rate, maybe help me with the last part of that question again, Ryan?

Ryan Levine (Equity Analyst)

Just to clarify the starting point, was that off of the original 2024 estimate or the actual estimate, the actual results?

Jason Vollmer (CFO)

Yeah. I think what we have said when we came out with that guidance range in February of this year was we were basing it off of our 2025, where we expect to be only four. The reason that if you look back historically, given the spinoffs and the transaction costs that we had as part of our last few years, it kind of made the historical look back kind of noisy on that front from a public standpoint. I would tell you that it's probably the same range if you use the adjusted 2024 number. You could use either one and you end up in the same spot. I think from that perspective, I'd be comfortable saying it's based on that adjusted 2024 number or on the 2025 range we put out this year.

Ryan Levine (Equity Analyst)

Great. Thanks for taking my questions.

Jason Vollmer (CFO)

Thank you.

Nicole Kivisto (CEO)

Thank you.

Operator (participant)

Thank you. At this time, there are no further questions. I would now like to turn the conference back over to management for closing remarks.

Nicole Kivisto (CEO)

All right. Thank you again for joining us today. We appreciate your interest in and support of MDU Resources and look forward to connecting with you throughout the year. With that, I'll turn the call back over to you, Operator.

Operator (participant)

Thank you. This concludes today's MDU Resources Group conference call. Thank you for your participation. You may now disconnect.