Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported August 6, 2026 · Beat 4 of last 6 quarters
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MDU's expanding data center load under ESAs (now over 1 GW) and the Bakken East pipeline project underscore the growing demand for power and natural gas infrastructure to support AI-driven data centers. The company's capital-light approach to serving data centers, combined with its pipeline expansion, positions it to benefit from the AI infrastructure buildout while managing risk. The pending Polaris Forge 3 ESA and continued rate case activity signal sustained investment in grid and pipeline capacity.
MDU reported Q2 2026 earnings of $21.3 million ($0.10 per share), up from $13.7 million ($0.07) a year ago, driven by new rates, customer growth, and the Badger Wind Farm. Electric segment earnings rose to $14.7 million, while the gas distribution segment narrowed its seasonal loss to $3.9 million. Pipeline earnings declined to $14.4 million due to higher depreciation and lower other income, partially offset by strong short-term transportation demand. The company signed precedent agreements for all Bakken East open season interest, filed a North Dakota electric rate case, and entered into a new 430 MW electric service agreement with Applied Digital.
Management reaffirmed 2026 EPS guidance of $0.93–$1.00 and the long-term EPS growth target of 6–8%. The Bakken East project remains a key growth driver, with all precedent agreements now signed and a FERC 7(c) filing expected in Q4 2026, ahead of a final investment decision. The project is designed for 1.4 Bcf/d with an option to increase contracted volumes, and management is evaluating financing and partnership options for the $2.7–$3.2 billion investment. Data center load under signed ESAs now exceeds 1 GW, with the new Polaris Forge 3 ESA pending regulatory approval; management expects additional volumes to come online over the next few years. The company continues to file rate cases across jurisdictions, including a North Dakota electric case and a Washington multiyear gas case, and plans a Minnesota gas filing later this year.
“We now have executed agreements with all customers that submitted binding open season interest, totaling nearly 1.2 billion cubic feet per day of transportation capacity with a negotiated option in place that may increase contracted volumes to nearly all of the original interest from our binding open season.”
on Bakken East milestone
“Data center customers are responsible for paying the costs associated with connecting to and being served by the electric system, including infrastructure and energy-related expenses.”
on Data center strategy
“We feel very confident in the ability to finance a project like this and certainly some good appetite out there for these types of assets today.”
on Bakken East financing
On the financing options for Bakken East, are you seeing any favorable markets out there that could help you efficiently finance the project?
Jason Vollmer said the company is evaluating all options, including balance sheet financing, partnerships, and other instruments. He noted strong appetite for these types of assets and confidence in financing the project. He also clarified that the FERC 7(c) filing is now expected in Q4, with FID ahead of that.
Could you provide more information on the negotiated option in place and the strategic rationale behind it?
Nicole Kivisto explained that the option allows a customer to add volumes under an already negotiated agreement, bringing contracted volumes close to the original open season interest. She confirmed the project is still designed for 1.4 Bcf/d and that the state of North Dakota is part of the signed precedent agreements.
Are there any factors that would cause you to expand the Bakken East pipe? And when should we expect a capital plan refresh?
Nicole Kivisto said the design will balance expandability with financial hurdles. Jason Vollmer noted the company typically updates capital plans in late November, but a Bakken East FID would trigger an earlier update. He said the project could be upsized with additional compression if future demand warrants.