Montana-Dakota appeals rate reduction order


BISMARCK, N.D., April 26, 2002 — Montana-Dakota Utilities Co. has filed an appeal of the North Dakota Public Service Commission April 24, 2002, electric rate reduction order.

The PSC order would require Montana-Dakota to reduce its annual electric rates by $4.273 million. The filing also asks for a stay of the effectiveness of the order while the appeal is pending.

Montana-Dakota President Wayne Fox says the company is challenging the Commission’s determination of the level of electricity sales to other utilities expected to be received by Montana-Dakota. “This was a major point of disagreement during the earnings investigation,” Fox says. “The Commission essentially ignored the testimony and evidence presented by expert witnesses and instead established a level of sales to other utilities that does not reflect current market conditions.”

Fox says the adjustment for sales to other utilities was $3.475 million of the total of rate reduction. He says that, although Montana-Dakota does not agree with all of the Commission’s findings, the company is not challenging other aspects of the rate reduction order.

“The electricity sales to other utilities we realized during 2000 and 2001 resulted from an unusual electricity marketplace,” Fox says. “To use those unusually high sales volumes, margins and resulting revenues violates principles of utility ratemaking, which require rates be set based on known and measurable conditions as they exist or are projected to exist. Current wholesale market conditions do not support sales levels as set out in the Commission order.”

Montana-Dakota Utilities Co. distributes natural gas and generates, transmits and distributes electricity and provides related value-added products and services in the Northern Great Plains. Montana-Dakota is a division of MDU Resources Group, Inc., a multidimensional natural resource enterprise traded on the New York Stock Exchange as “MDU.” For more information about Montana-Dakota, visit the company’s Web site at www.mdu.com.

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