MDU Resources' Long-Term Investments to Drive Growth Amid Aging Infrastructure Risks

MDU Resources is focused on upgrading and expanding its electric and natural gas infrastructure to serve a growing customer base. The company expects long-term EPS growth of 6-8% and regulated capital expenditures of nearly $3.1 billion in the 2025-2029 period. However, MDU faces risks related to aging infrastructure and seasonal fluctuations in business operations.

Multifamily property owners and managers are increasingly recognizing the importance of investing in digital infrastructure to meet the evolving expectations of residents and enhance operational efficiency. MDU Resources, a leading provider of electric and natural gas infrastructure, is at the forefront of this trend by upgrading and expanding its digital infrastructure to serve a growing customer base. The company expects long-term EPS growth of 6-8% and plans to invest nearly $3.1 billion in regulated capital expenditures over the 2025-2029 period [1].

The focus on digital infrastructure is driven by the growing demand for smart-tech living experiences among residents. According to Sandy Jack of Nomadix, 75% of renters want smart home technology, and nearly 60% are willing to sacrifice other amenities for smart features [1]. By prioritizing 'best in scale' digital infrastructure, MDU Resources can unlock hidden revenue and improve resident satisfaction.

One key area of investment is managed Wi-Fi networks. While the latest Wi-Fi 7 protocol offers faster speeds and higher capacity, it is not yet cost-effective for most properties. Instead, investing in robust, property-wide managed Wi-Fi networks using Wi-Fi 6 can provide immediate value, higher NOI, and resident satisfaction [1]. This investment also lays the foundation for future expansion and integration of additional smart technologies.

Another priority for MDU Resources is energy efficiency. Implementing smart tech to manage energy consumption can lead to a 19% decrease in energy expense and 18% lower operating costs [1]. This is particularly important for MDU Resources, which faces risks related to aging infrastructure and seasonal fluctuations in business operations.

Additionally, MDU Resources is prioritizing security by integrating smart access control systems. These systems provide peace of mind for residents and can reduce safety and security incidents by 21%, helping lower insurance costs and boost resident retention [1].

In conclusion, MDU Resources' investment in digital infrastructure is a strategic move to enhance operational efficiency, improve resident satisfaction, and drive long-term growth. By focusing on 'best in scale' solutions and prioritizing energy efficiency and security, MDU Resources is well-positioned to navigate the challenges of aging infrastructure and seasonal fluctuations.

References:
[1] https://bbcmag.com/unlocking-hidden-revenue-with-best-in-scale-digital-infrastructure/