Nicole Kivisto : Yes. Thanks for the follow-up on that. We are excited about our Investor Day that was rescheduled to March 13, 2024, the New York Stock Exchange. So just as you mentioned, given some of the strategic changes underway at MDU over the last couple of years, we thought the day would be a great way to provide some updates on our operational strategy and financial plans as we progress and move forward on our strategy to become a pure-play regulated business. But in addition to that, as you mentioned, we will look to provide some updates regarding CSG’s business outlook and progress on the spin-off as well. So in addition, we are celebrating our 100th anniversary in 2024. So we’d look to celebrate that and seems only fitting that as we celebrate the employees that came before us and created the company that we have today that we are moving forward with another transformation that will pave the way for our future.
So excited to provide those updates next month.
Operator: [Operator Instructions] Your next question comes from Brian Russo with Sidoti.
Brian Russo : Can you just provide us an update on the MISO Tranche 1 transmission projects you’re working on? Where are you in the development stages? And when my construction start and how does that correlate to your multiyear CapEx profile?
Nicole Kivisto : Yes, absolutely. I’ll have Garret talk about a little update there. The punchline is, progress is being made here, and it’s within the capital budget that we presented to the — in the news release. But Garret, go ahead and provide some additional details there.
Garret Senger: That is correct. This is including the 5-year capital budget that we provided. There’s — the project is about $220 million in terms of what MDU share would be of that project. And easement work is underway. The approval process will start in terms of that — those easements. And then the project will look at a majority of the expenditures in the ’26 and ’27 year time frame and the property then to be in service in that ’28 time frame.
Brian Russo : And I think there’s an expectation —
Garret Senger: I was just going to mention that we did receive equip return on that. So we’ll be earning a return on that project FERC approved our request for earnings construction work in progress on that project as we go throughout the 5-year cycle.
Brian Russo : And I think there’s an expectation that MISO will release the Tranche 2 project sometime this year. Any thoughts on timing and/or what MDUs participation might be?
Nicole Kivisto : Yes. I’ll go ahead and take that. We’ll be monitoring that. There’s been kind of some movement back and forth in that. And so more to follow there. We’re currently monitoring it and looking for opportunities to the extent they exist, we will make sure that we update you accordingly and nothing to update till then.
Brian Russo : And just to clarify, you’re now forecasting a utility rate base CAGR of 7%. I believe your prior disclosures were 6% to 7%. So does that insinuate the rate base CAGR is accelerating, albeit 100 basis points, but just wanted a clarification there.
Nicole Kivisto : Yes, we did update our rate base CAGR guidance to be reflective of the all-in CapEx that we presented here in terms of our 5-year capital plan. So yes, we are stating that today at the 7%, which is an increase from what we were historically indicating.
Brian Russo : And then just switching gears to Construction Services group. Margins are comparable according to your guidance in ’24 versus ’23. And I think just back of the envelope, it looks like the EBITDA margin was 7.8%. Is that considered kind of normalized and optimal given the mix by business line, where E&M is about 3/4 of the revenue and T&D is about 1/4, whereas T&D has much higher margins. So I’m just curious, will you look to grow the T&D line of the business at a more rapid rate to increase margins above 7.8%? Or is this kind of the mix we should be thinking about going forward?
Jeff Thiede: I think it’s a good mix for going forward, but we’re always looking to improve margins as we did this past year. We’ve had a number of projects increases in cost basis that we’re able to reflect and pass on to our customers through preconstruction. So as we develop new projects, we’re able to update our estimates accordingly. We also have several MSAs that we renewed. We were in accelerated inflationary pressures over the last couple of years. And not only do we catch up, we were able to recover on some of our work going forward on our E&M and T&D side. We’re looking to expand both businesses if and when we have available acquisitions in our future and then also, of course, most of our work has been — our growth has been organically through the talent of our people.
Brian Russo : Okay. And what’s your outlook for your renewable-related customers? I know there was some volatility in 2023. Just curious what the outlook is there or what you’re hearing from your renewable customers?
Jeff Thiede : Our outlook is strong. We picked up more renewable work in the Midwest through 1 of our E&M companies in addition to the work that we had in the Southwest. So we have a number of projects that we’re still targeting, and we look to get a couple of them in our backlog this quarter. And couple that with the work that’s associated with the IIJA and IRA and also the chips work funding, there’s a lot of opportunity that’s going to fuel our growth going forward.
Brian Russo : And then just lastly, some extreme severe weather out West, particularly in Southern California, maybe even spreading north now. And I’m just curious how are you managing that? Are you losing man hours or even days of work? And then is there any emergency response work that you might be able to capture?
