Q1 2022 MDU Resources Group Inc Earnings Call
Okay.
[music] [music].
Hello, My name is Tamara and I will be your conference facilitator at this time I would like to welcome everyone to the MDU resources Group 2022 first quarter conference call. All lines have been placed on mute to prevent any background noise. After the speakers' 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 one on your telephone keypad. If you would like to withdraw your question press the pound key on your telephone keypad. This call will be available for replay beginning at five P. M. Eastern time today through 11 59 P. M. Eastern time on May 19th the conference I'd number for the replay is 2188415.
Again, the conference I'd number for the replay is 2188415 the number to dial for the replay is 18558592056 or 4045373406 I would now like to turn the conference over to Jason Vollmer, Vice President and Chief Financial Officer.
Of MDU resources group. Thank you Mr. Vollmer, you may begin your conference.
Thank you and welcome everyone to our first quarter 2022 earnings conference call you can find our earnings release and supplemental materials for this call on our website at Www Dot MDU dot com under the Investor Relations tab.
Leading today's discussion along with me will be Dave Goodin, President and CEO of MDU resources also with US today to answer questions. Following our prepared remarks are Dave Barney President and CEO of Knife River Corporation.
Jeff Thiede, President and CEO of MDU construction services group, Nicole Crystal President and CEO of our utility group.
Trevor Hastings, President and CEO of WBI energy.
And Stephanie Barth, Vice President Chief Accounting Officer, and controller of MDU resources.
During our call we will make certain forward looking statements within the meaning of section 21 E of the Securities Exchange Act of 1934.
Although the company believes that its expectations and beliefs are based on reasonable assumptions actual results may differ materially.
For more information about the risks and uncertainties that could cause our actual results to vary from any forward looking statements.
These refer to our most recent SEC filings.
We may also make reference to certain non-GAAP information for a reconciliation of any non-GAAP information to appropriate GAAP metrics. Please refer to our earnings release.
I will start by providing consolidated financial results for the first quarter before handing the call over to Dave Goodin for his comments and his forward look.
Yesterday, we announced first quarter earnings of $31 7 million or <unk> 16 per share compared to first quarter 2021 earnings of $52 1 million or 26 per share.
Our combined utility business reported net income of $47 6 million for the quarter compared to $46 9 million for the first quarter of 2021.
The electric utility segment reported strong first quarter earnings of $11 3 million compared to $10 7 million for the same period in 2021 drew.
Driving the results was a two 5% increase in electric retail sales volumes, primarily from colder weather and higher transmission revenues.
Result of this business were impacted by lower investment returns on certain benefit plan investments.
Our natural gas segment also reported strong first quarter earnings of $36 3 million slightly higher than the previous year.
9% increase in our retail natural gas sales volumes across all customer classes.
Which of course were partially offset by weather normalization and decoupling mechanisms along with improved rate relief in certain jurisdictions positively impacted earnings for the quarter.
Partially offsetting these increases were higher operation and maintenance expense and again lower investment returns on certain benefit plans.
The pipeline business earned $7 3 million in the first quarter compared to $8 9 million in the first quarter of 2021.
The North Bakken expansion project placed in service on February 1st drove higher transportation revenue, which had a positive impact to earnings for the quarter.
But this was more than offset by higher operating expenses lower storage related revenue and lower investment returns on benefit plans.
Now turning to our construction businesses, our construction services group had record revenues in the first quarter of $552 6 million and reported first quarter earnings of $21 3 million.
This is compared to the prior year's first quarter revenue of $518 5 million, which also included last year's record first quarter earnings of $29 8 million.
Increased volumes and utility related transmission and distribution work along with a larger volume of work in the renewable and commercial markets were offset by a reduction in the amount of higher margin storm repair and fire hardening powerline work.
Lower industrial margins due to the timing of projects were partially offset by higher commercial margins at the electrical and mechanical portion of this business.
Our construction materials business also had a record first quarter revenue of $310 million and reported a seasonal loss of $40 million compared to the prior year first quarter revenues of $265 7 million and a seasonal loss of $30 8 million.
Higher average product pricing and higher volumes across all product lines drove top line growth, however, higher fuel repair and maintenance and labor related costs more than offset the increase.
Also negatively impacting the quarter were higher selling general and administrative expenses, primarily from higher payroll related costs less bad debt recoveries in the prior year and lower investment returns on benefit plans.
As I mentioned in the segment discussions are companies were impacted by lower investment returns on certain nonqualified benefit plans in total that impact was $6 2 million after tax when compared to the first quarter of 2021.
Finally, the company continues to maintain a strong balance sheet and ample access to working capital to finance our operations as we get into the peak seasons ahead of us.
That summarizes our financial highlights for the quarter and now I will turn the call over to Dave for his formal remarks, Dave.
Thank you Jason and thank you everyone for spending time with us today and for your continued interest in MDU resources.
We've had a solid start to the year reporting topline revenue growth across all segments with both of our construction business is reporting a record first quarter revenues.
As expected, we did experience and continue to experience inflationary pressures. However, we are encouraged by record construction backlog and the various growth opportunities at our regulated businesses.
We are proud of our team's ability to continue to execute on its business plans to provide strong results, while navigating through inflationary and supply chain challenges.
To summarize activity by business segment, I'll start off with the regulated energy delivery businesses.
The utility reported higher earnings on a combined basis for the quarter as it continues to experience strong customer growth across the service territory.
Our customer base grew one 7% on a year over year basis, and we expect this growth to continue at a pace between 1% and 2% compounded annually over the next five years. We also expect rate base growth at 5% compounded annually over the next five years as well and this was driven.
Primarily by investments in system infrastructure upgrades and replacements to safely meet customer demand.
This business continues to seek regulatory recovery for the investments associated with providing safe and reliable electric and natural gas service to our growing customer base.
In March our natural gas utility filed a multi party natural gas rate settlement in the state of Washington that would increase revenue by approximately $10 7 million annually, which is approximately 4% higher than current rates a hearing on the settlement is set for June 1st you can.
Read more about this in our other regulatory filings in our Form 10-Q filed this morning.
At our electric utility construction is soon to commence on Heskett station unit, four which is expected to be in service during the first half of 2023.
<unk> four is a reminder to those as a natural gas, peaking unit that will aid in partially replacing needed capacity with the retirement of our coal fired heskett station units, one and unit two.
Which in the first quarter. This year were retired and the coal fired Lewis and Clark unit number one which was retired in the first quarter of last year.
I would also like to recognize the efforts of our many employees who work tirelessly to restore power to customers in northwest North Dakota, who were impacted by the recent major snow and ice storms. These storms caused widespread power outages and significant damage to the company's electric transmission.
<unk> and distribution system.
And we had at one point over 18000 customers out of service.
Our teams have restored power to all communities as of last weekend and continuous storm damage repair and cleanup activities again, we thank our employees for their hard work and our thoughts are also with our customers impacted by this event.
At our pipeline business. We also had a solid quarter as Jason noted this business recorded higher transportation revenues related to the North Bakken expansion that was placed into service here just on February one.
This project is well positioned in the Bakken and can be readily expanded in the future for forecasted natural gas production growth in.
In addition to that opportunity we're excited about the multiple pipeline expansion projects on the horizon, such as the <unk> expansion project in Eastern North Dakota, which is expected to be in service in 2024 pending regulatory approval.
This project involves constructing approximately 60 miles of 12 inch pipeline from our existing facilities at Maple to North Dakota down to Whopper to North Dakota.
It will add some 20 million cubic feet per day of natural gas capacity.
It is expected to cost approximately $75 million.
In the more near term. This business has entered into long term customer agreements for four additional projects pending regulatory approval of these projects are expected to be completed here in later 2022 and into 2023 and combining to add some incremental 300 million cubic feet per day of.
Natural gas transport capacity to the system.
Now I'd like to move on to our construction platform.
At our construction services group, we had record revenues during the quarter with growth at nearly all of its business lines underscoring this businesses capabilities to perform a diverse range of projects.
We continue to see strong demand for utility related work as initiatives for grid hardening and optimization projects takes shape.
We're also excited about the increasing demand for renewable projects as well as higher institutional demand in the education and government sectors.
Although earnings were down during the quarter compared to the prior year's record first quarter earnings were also optimistic about the rest of 'twenty two and beyond construction.
<unk> services ended the quarter with an all time record backlog now standing at 167 billion. This was up 31% from the prior year.
And we have numerous projects underway across all of our markets, which are expected to contribute to the 2022 results.
We expect revenues at this business to be in the range of two 2% to $2 4 billion with margins comparable to 2021 levels.
And with our ability to successfully attract and retain a skilled workforce, which now numbers over 8300 employees across the footprint, which is up nearly 900 from the same time a year ago.
We are well positioned to complete these projects safely efficiently on budget and on time.
And finally, turning to our construction materials business. We also had record revenues in this business in part from contributions from recent acquisitions and increased product pricing. However.
However, this business recorded a larger seasonal seasonal loss, reflecting higher fuel materials and labor related cross costs across all product lines as the company continues to experience inflationary headwinds during the first quarter.
As previously mentioned this business is increasing pricing to offset these inflationary pressures and while the impacts to those increases were somewhat muted due to the typical low sale volumes during the first quarter, we expect to see the benefits from higher prices as the construction season progresses throughout the year.
And sales volumes ramp up, especially in our northern tier markets.
Through its successful first quarter bidding season, ne forever increase backlog, 15% from the prior year to now standing at $940 million.
Given our strong backlog and record first quarter revenues, we are increasing the revenue guidance by $150 million to now a range of 245 billion to $2 65 billion with margins slightly lower than 2021, reflecting the current inflationary environment.
Knife River is working hard to attract and retain a strong skilled workforce and through the use of its 270 acre training centre in the Pacific Northwest.
As providing training needed for new entrants to the construction industry as well as continuing education for industry veterans that.
The knife River training center, which celebrated its grand opening just last Thursday on April 28th features an 80000 square foot heated indoor arena for training on trucks and heavy equipment and an attached 16000 foot square office classroom and lab facility.
The accreditation program for the CDL driving school at this facility is complete which will provide much needed professional drivers for our operations.
Turning and looking forward, both our construction materials and construction services business are very well positioned to benefit from the infrastructure investment and jobs Act, which we anticipate will begin to positively impact bidding opportunities here later in 2022 and going forward. Both of these businesses are.
Also actively seeking acquisition opportunities that are complementary to our existing businesses and to increase market presence fuse.
Future acquisitions are not included in our stated guidance and would be incremental to our 2022 results.
This completes our individual business unit discussion now looking ahead, we are affirming our 2022 earnings guidance in the range of $2 to $2 15 per share with EBIT guidance in the range of $900 million to $950 million.
We have a robust capital plan with 770 million plan for 2022, and nearly $3 1 billion over the next five years. These capital expenditures, including line of sight opportunities such as the Heskett station and other infrastructure development at the utility expansion project.
At the pipeline and ongoing equipment replacements at our construction businesses.
As always MDU resources is committed to operating with integrity and with a focus on safety, while creating superior shareholder value as we continue providing essential services to our customers and delivering on our mission of building a strong America, while being a great and safe place to work.
Appreciate your interest in and commitment to MDU resources and ask now that we open the line to questions operator.
At this time I would like to remind everyone. If you would like to ask a question. Please press Star then the number one on your telephone keypad. If you would like to withdraw your question. Please press the pound key on your telephone keypad, if you're on a speakerphone. Please pick up your handset before entering a request we will pause for just a moment to compile the Q&A roster.
Our first question will come from the line of Darius <unk> with Bank of America. Please proceed with your question.
Hi, good afternoon, thanks for the time today.
Just wanted to start out on the <unk>.
Material.
Segment, and 22 guidance, where you guys moved up the revenue guidance and took down the margin expectations, a little bit so in the context of the comments about expecting gray.
Greater benefits from price increases and obviously you guys reaffirmed your full year EPS guidance, how should we think about those moving pieces as far as the earnings expectations for the materials business for the remainder of the year.
Yes.
I'll ask Dave Barney to weigh in here.
Maybe steel as headline though is that.
Clearly $150 million raise on the top line is.
We're seeing some inflationary pressures, but that's also reflecting some pricing adjustments as we think about the remainder of the year Darius.
And then as we think about the pricing increases that I noted.
We would expect because the first quarter is pretty light volumes in our business and we really start to see again on a volumetric basis if we.
Arrays, whether it's aggregates asphalt and ready mix.
That will be come into play more as we sell volumes, which are more second quarter and growing certainly strongest in the third quarter and then.
We start tapering off somewhere around Thanksgiving time, so that's how we're really viewing at those price increases will be reflected as our sales volumes ramp up through the remainder of the year.
Offsetting some of those inflationary pressures now Dave Barney did I leave anything else to say on that but I think they might be interested in just kind of a general.
Hence if you will of kind of what youre seeing out there maybe from a bidding opportunity perspective.
Yes, I think you pretty much covered it.
Alright.
We have raised prices in all product lines.
To offset that inflationary price increase that we're seeing.
As Dave said, the first quarter is light due to weather.
We're optimistic about 2022.
If you look back to our record year of 2020.
First quarter loss of <unk>.
Two which was only 1.8 million less than this year and that comparing our first quarter to the first quarter of 2020, we had a higher margin in 2020.
Backlog is higher than the backlog.
Through large is higher so the other thing that.
I'm not sure Dave hit on we have carryover work.
Protected.
So we are raising prices, but we do have carryover award.
We don't have price increases yet.
That will start happening in the second quarter. So we expect margins to continue to go up through the year.
So.
Hope that answers your question.
Yeah.
Okay.
To your question.
Yes, absolutely, yes, yes, thank you to both Dave and Dave for that one.
If I could just maybe ask now on the construction services side, just looking through the additional details that you guys are now providing very much appreciated.
The renewable segment it seemed like there was quite a jump year over year from last year's Q1, still a relatively small portion but growing fast.
However, the gross margin.
And that its comparably with less.
Are you guys actively looking to perhaps sacrificed a little bit on the margins there in order to capture market share or just how are you thinking about that.
Pat.
Renewables piece in particular.
So there is so I'll ask Jeff to weigh in but just as a reminder, actually the renewable space is something we've been doing for well over a dozen years.
It can tend to be lumpy at times, but obviously as we broke that out now among the various segments. It becomes more visible with I think is important for you and investors to get a sense for.
Jeff do you want to touch more on the specifics of that renewable space to help out.
The question that Darius Ed.
Absolutely.
You can see that our solar work as accretion as you mentioned and there were some startup costs involved with the change in those numbers and those percentages.
We expect to build upon our success in solar there's quite a few opportunities out there available in the marketplace.
Mostly people think about southern Nevada, where we are very well equipped with experience and team.
Teams to be able to build projects and we are seeing an increased growth.
So there we also have three utility scale solar projects in the Pacific Northwest and we just picked up another utility scale project in Illinois and that last project I mentioned is not reflected yet.
In our numbers that we released or in our backlog, but we see it as a growing market. We have the experience and we are well positioned.
Got it okay. Thank you very much if I can.
Squeeze one more in here just more on your overall 22 guidance.
Assume that the impact of the Cascade settlements are not included in your EPS guidance given it has not been approved yet, but if you could just confirm that.
Darius.
I think thats, a fair assumption, but obviously, we have a multi party.
<unk> to that as well so we have to kind of put that into context, as well anything else to add to that Nicole.
Sure.
Yes, I think as you look at the overall guidance for the corporation for the year. The utility would have provided their share of that to corporate and we do include some assumptions on how recoverability on that rate case essentially to your point, we do not have final approval yet.
Right now we've got a settlement in front of the commission to party settlement that we're waiting to hear on that and once we know we'll certainly let the market know.
Okay, great. Thank you very much.
Thank you very much areas.
Your next question will come from the line of Ryan Levine with Citi. Please proceed with your question.
Hi, everybody.
Turning to free cash flow outlook. Thank you took down your organic free cash so an increase of your capex number it's about 6%.
Are you thinking about financing needs and equity needs heading into the balance of the year.
Yeah. Thanks, Ryan This is Jason I can say, yes, you're spot on we did bring back the operating cash flow number a bit and also increased.
A little bit on the.
Capital expenditure side of things on the cash flow side, a lot of that is going to be due to just what we've seen even from working capital needs are a lot of it probably related to higher gas prices that we've seen.
With our utility company and the fact that we will you'll get recovery of that through purchase gas cost adjustments here in the future, but the timing of that might not match up with what we had originally expected with those higher costs on the capex side of things.
We did see some changes there are some increases as well thats really just kind of the addition of a few projects are really some pull forward of projects that maybe we're going to be in future parts of our five year forecast that were actually pointless forward a bit due to timing of request or just needed to get those projects done a little bit sooner on.
On the financing side of things back to that question on.
On the increased gas cost portion of it again will recover those through our normal PGA adjustments as we go forward. So not looking to do any external financing on that we've got plenty of liquidity and working capital to be able to manage through that process and realize the increases that we've seen on the <unk>.
Capex side of the equation are pretty small at this point in time, so I'm not changing any of our our forecasted look we've stated before we don't have any plans to issue equity in 2022 absent some larger acquisitions. We may do later in the year that has not changed we're still in that same position.
Thanks for the color and then I guess switching gears to the materials segment.
There's a lot of the ASP dynamics and overall segment contribution curious what really drove the decline in margin on the dollar per ton basis is it more the ready mix side or asphalt or other components of their business.
Yes.
Brian This is Dave I'll ask Dave Barney to weigh into that one Dave.
When youre looking to aggregate, it's mostly fuel and repair and maintenance.
On the aggregate side.
Basically the same.
Asphalt fuel maintenance drove margins down.
It is the decline in margin on a per ton basis is it more driven by.
One product over another product or is it fairly uniform in terms of the net decline on a per ton basis.
Okay.
Okay.
Right.
Alright.
All of our.
Product line.
It is just maintenance costs and fuel costs.
And Ryan I would just add to that really because of volumes are still very low in here in the first quarter.
The pricing increases that Dave Barney has noted.
We will become more visible into the second and third quarters as we start to ramp up volumes there and so I think it's a very small sample set that youre seeing here in the first quarter.
With with price increases.
Having a material effect given the low volumes.
Okay, and then I guess that leads to my follow up question in terms of timing of when price increases typically occur.
During the period of the year or you try and push the price increases across.
It has largely been impacted to reflect.
Every single inflationary pressures.
Dave can you touch on just kind of in general.
What the timing has been on the price adjustments and get a sense for that for Ryan.
Yes.
Jonathan.
We're putting the price increases into those jobs right, whether it's construction whether it's.
Aggregates ready mix asphalt.
But like I said, we have carryover work from last year, that's protected problem.
Probably a large majority of our first quarter work because.
Protected carryover work, so youre going to see the full impact of those increases in the second quarter.
I appreciate it.
That's all for me thank you.
Okay, well. Thank you Ryan appreciate the questions.
Your next question will come from the line of Brent Thielman with D. A Davidson. Please proceed with your question.
Great. Thank you for taking my questions.
I guess first on the.
Services side some of your peers in the electrical mechanical business combating major disruption sort of how their supply chain challenges in this last quarter arguably over the last few quarters.
I suspect some of that is going to be transitory, but just wondering if that was a factor here three this quarter.
How youre addressing those challenges going forward to protect margins.
Yes.
Yes, I heard the question, Brent primarily around labor and supply chain I'll ask Jeff Thiede to kind of touch on both because of particular, we've actually ramped up employment here as of late to an all time level at CST and.
Thats in response to the all time backlog that we've got two but.
Jeff a little more detail for Brent as to labor and supply chain.
And we certainly.
See the impacts of the supply chain issues.
At our backlog and we are.
Price protected or at least we've got market level clarification language in our proposals.
Management teams are estimators project managers.
<unk> closely with our customers to identify the risks and try to offer solutions and updates from our vendors, it's changing every day.
And with this material availability.
And the procurement part of our business.
We are responsible for delivering on time and so our vendors when we rely upon them.
We have also had some impact when the materials are late from other contractors because it does affect the labor, which is our biggest risk out there in the field. So we're working through this our teams are communicating better than they ever have in identifying updating pricing with our customers.
And that's how we're handling it but we have.
Certainly have been impacted by delays in supply chain.
It puts pressure on our labor.
Okay I appreciate that Jeff maybe one more on that side one of your peers. This morning.
Jeff talked about a very small base and a growing element or made a point to talk about a small but growing element of the electrical business related.
EV charging for EV charging stations is that something you are involved in.
Essentially represent a bigger opportunity for you here.
Yes from a national basis.
We have experience in.
About three of our local markets. So we're keeping a close eye on that.
A positive impact to R. R.
Electrical businesses, but also on the distribution side.
But a substation expansions and it will affect us all the way upstream from that so we are well positioned to continue to look for those opportunities and if we do see this as a growing market.
Okay. Appreciate that last one was just on the construction materials side just.
Wondering if there's been any disruption related to rebid projects since costs has gone up here sort of over engineer as commenced I'm. Just wondering if I suspect that felt transitory as well, but yes that had that happen with the backlog be even better.
Have you seen any of that.
Dave would you take that.
Sure.
We have seen.
Quite a few areas where.
Our our bid prices have been over the engineers estimate in most cases not all cases.
Warranty mills.
Because of their only seen one or two bidders on these jobs.
Most most cases, we're seeing that.
But there has been some jobs that have not awarded because that way over the engineer's estimate.
Okay, well, thanks again in the quarter Danielle Newmont.
Great. Thank you Brad appreciate it.
At this time as a reminder, I would like to remind everyone in order if you will.
I'd like to ask a question. Please press Star then the number one on your telephone keypad. If you would like to withdraw your question. Please press the pound key on your telephone keypad, if you're on a speakerphone. Please pick up your handset before entering your request. Your next question will come from the line of Brian Russo with Sidoti. Please proceed with your question.
Yes, hi, good afternoon.
Hi, Brian .
I just wanted to follow up on the construction services side just on the margins.
It looks like a little over 5% operating margins.
<unk> first quarter 'twenty two versus.
The high 7% margin in the first quarter of 2021.
Yes.
Very similar kind of trend that we've.
We've seen some of your other segment services peers.
I'm just curious.
Like the profile of <unk>.
The margins should look like for the remainder of the year.
In order for you to.
To achieve your.
Does your margin guidance there.
Sure.
I noted in the release, we did note that some of the difference on a year over year basis was the mix of work in which we had in the first quarter in particular, I'll say maybe stronger than typical.
The storm related activity first quarter of last year that has something to do with just the first quarter I'm going to ask Jeff Thiede to kind of talk about how he's seeing the balance of this year, which I think was the second part of your question, Brian and just how are we feeling about margins on an overall basis Jeff.
Yes.
Our first part of Q1 was a lot slower than our second part of Q1 and with our record backlog, we built quite a bit of momentum. We've also had.
Project timing.
Building back up.
Las Vegas, we came off of the resorts World project last year and a number of other large projects with our electrical mechanical fire protection and underground utility companies and we're starting to see those hours and the backlog increase in Las Vegas. In addition to Columbus, Ohio, So a lot of.
This was timing of when the Mega projects for finishing and.
When the new projects that we have in our record backlog we are starting.
Okay got it so is it fair to say that youre going to be burning off lower margin projects.
Maybe this quarter and next and then.
The backlogs.
Grows as it has.
Youll start.
Generating revenues and margins from higher margin projects more reflective of the economy.
Market and.
And industry environments.
It could be absolutely could be.
We're looking forward to execution offsetting some of these challenges and headwinds through are these projects in.
We have increased our prices on labor and materials.
It will be about planning about supply chain.
And we do.
See our margins improving on a go forward basis.
Yeah.
Okay, Great and then just.
A follow up on the JA and your positioning there.
I'm just curious how you see that money.
Being appropriate too.
So the state levels.
You are positioning.
And exposure to the Dot's are and are you involved in may.
Maintenance projects, which I would imagine it's going to be funded first.
At least quicker.
And then there's <unk>.
Larger more complicated expansion type projects that would have to go through.
Quite a bit of more.
Permitting and engineering, so just wanted to get a sense of how quickly we could see.
That type of business growth.
Sure.
I'll take that one and then if either Dave or Jeff have anything to add they certainly could but.
Our view would be.
We were pleased and excited that Congress passed the IHA back in November our view is that if we see any of those dollars here in 2022 there'll be late 'twenty two at best So really it's really not been factored into our guidance for this year now hopefully that.
Come sooner rather than later, but that's kind of our expectation it would be more of a 2023 and beyond.
You did mentioned D O T or road related activity, there's really $550 billion of new moneys included in the <unk>.
I know, it's billed as one two trillion, but it's really $550 billion of new moneys I think important for dot's.
Across the U S is that it provides a fair way of funding for the next several years and there is some.
Assurance, if you will of funding and so there isn't.
30, 60, 90 day extension of continuum of funding, which we've seen.
Seven years ago that just really didn't give planners in those departments much.
Roadway if you will to look ahead and kind of plan.
Projects for the same year upcoming years, those kind of things so.
Combined with new monies that 550 billion and the big buckets of things roughly two thirds of that those monies are things, we do whether it's in the traditional infrastructure, whether it's in the I'll call electrification of the economy EV stations grid hardening renewables sub.
Station upgrades those kinds of things and then again the traditional roads bridges highways that we do.
On materials so.
How that gets down I mean, we understand where the dollars are headed the timing of those but in summary kind of 'twenty. Three is when we would expect to start to see that and beyond but it's a lot of what is in there are a lot of the things in which we do which gives us some.
Confidence if you will as a continued funding mechanism so.
I don't know if you want to redirect on that Brian or drill down deeper for either Dave or Jeff for materials or service specific questions.
No no.
That's helpful. And then just switching gears to the utilities.
Syed.
The settlement in Washington, clearly much improved from the prior outcome just curious.
Are there any rate cases planned in any of your other jurisdictions over the next two.
Month's debt that.
That we should be aware of.
Sure. Thanks, Thanks for that Bryan I'll ask Nicole to weigh in on that she is front and center on on all of those.
Sure.
Alright. Thanks for the question, maybe just quickly before I get into a forecasted rate case as a follow up on the Washington cases, as you probably will see in our 10-Q that the hearing on that settlement is set for June 1st until following back to when we may have rates implemented if anything is approved on that settlement or if we get it.
That would be on or before September one so just giving your perspective on the timing there and then as we look ahead over the next several.
The remainder of this year, maybe I'll comment on upcoming cases in the near term, we do plan to file in North Dakota Electric case.
The hope there would be that we could potentially get interim rates in place later this summer.
And then looking beyond that we've got in Idaho.
That we will file and most likely a Montana electric now on both of those cases.
Any approved revenue would be realized or implemented in 2023. So it would not have an impact on 2022.
Hopefully that gives you some perspective.
Yes, It does and then just lastly.
The underground.
Transmission and distribution out west and in California, any update there that you could provide us I may have missed this earlier.
No.
Ask Jeff to weigh in on that is clearly a very familiar with that important customer that we have out there.
Yes that grid hardening work is really not new to us and we've been performing these types of services in our Midwest Rocky Mountain specific.
<unk> west and western regions in the country.
We are very well positioned in these high fire Creek districts.
Costa, Nevada, Sonoma counties, where a lot of this work will take place.
We've got a very long history and track record of success with this customer.
<unk>.
And management professionals are very very capable and confident we're going to participate as one of the contracting partners. When the work is released.
Tracking this closely.
We're currently engaged in the engineering.
The right of way access scheduling of procurement, we don't have any of this work for this customer in our backlog, yet, but we're very well positioned.
Okay, great. Thank you very much.
Thank you Brian I appreciate all those questions.
This marks the last call for questions. If you would like to ask a question Press Star then the number one on your telephone keypad. This call will be available for replay beginning at five PM Eastern time today through 11, 59 PM Eastern time on May 19th the conference I'd number for the replay is 2188415 again the conference I'd number is.
For the replay is 2188415.
At this time there are no further questions I would now like to turn the conference back over to management for closing remarks.
Thank you operator.
Thank you all for taking the time to join US here on this first quarter earnings call.
We're optimistic about our growth opportunities with record combined construction backlog and our ongoing and future regulated energy delivery projects. We certainly look forward to connecting with you again as we progress through 2022.
And as a final reminder, I know we've had the save the date out there before but we are hosting an analyst tour at the new knife River training facility in Corvallis, Oregon on June 7th and eighth.
Love to have you there if you are able to make that in your schedule and again. Thank you. We appreciate your continued interest and support of MDU resources with that I'll turn it back to the operator.
This concludes today's MDU resources Group Conference call. Thank you for your participation you may now disconnect.
Okay.