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MDU Resources Group

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Learn more about corporations VOTING to rewrite our laws.

MDU Resources Group is a diversified energy company with electric and natural gas utility distribution operations in North Dakota, Montana, South Dakota, Wyoming, Minnesota, Washington, and Oregon. It has been named to the Fortune 500 list, which highlights the largest companies in America.[1] 51% of its earnings come from energy.[2]

Ties to the American Legislative Exchange Council

MDU Resources has been a corporate funder of ALEC, and served on ALEC's Energy, Environment and Agriculture Task Force [3]

A list of ALEC Corporations can be found here.

About ALEC
ALEC is a corporate bill mill. It is not just a lobby or a front group; it is much more powerful than that. Through ALEC, corporations hand state legislators their wishlists to benefit their bottom line. Corporations fund almost all of ALEC's operations. They pay for a seat on ALEC task forces where corporate lobbyists and special interest reps vote with elected officials to approve “model” bills. Learn more at the Center for Media and Democracy's ALECexposed.org, and check out breaking news on our PRWatch.org site.


History

Historic Timeline:[4]

MDU Resources got its start in 1924 as the Minnesota Northern Power Company. Its founder, Rolland Heskett, had previously been involved with utilities in Wisconsin and northeast Minnesota (the forerunners of Wisconsin Public Service Corporation and Minnesota Power, respectively). The Minnesota Northern Power holdings initially consisted of the electric utility at Cushing, Oklahoma (quickly sold off to Oklahoma Gas & Electric), Minnesota Electric Light & Power Co. which served the Bemidji, Minnesota area (sold in 1925 to the W. B. Foshay interests; this property today comprises Otter Tail Power's Bemidji division), and the Eastern Montana Light & Power Co. which was centered around Sidney and Glendive, Montana and which became the nucleus of MDU's operations.

Initially, Minnesota Northern was only in the business of selling electric power but entered the gas business following discovery of deposits in eastern Montana. As Minnesota Northern expanded across eastern Montana and far west North Dakota, the opportunity came up to acquire the electric franchise for Miles City, Montana and which led to an epic showdown with the Montana Power Company (and Minnesota Northern won).

Shortly after passage of the Public Utility Holding Company Act of 1935, Heskett reorganized all the various gas and electric subsidiaries of Minnesota Northern Power under a new name - Montana-Dakota Utilities.

Unlike its neighboring utilities, MDU generally was not in the business of reselling energy at wholesale to other companies (with the exception of five eastern Montana towns then served by the Mountain States Power Company; the distribution systems in these towns passed into MDU ownership by the early 1940s).

The largest addition of territory on the electric side came in 1945 when MDU purchased the Dakota Public Service Company from NorthWestern Public Service Co. of Huron, SD in 1945. DPSC served a total of 91 towns in west-central North Dakota (originally served by the Hughes Electric Company / North Dakota Power & Light Co.) and south-central North Dakota / north-central South Dakota (originally served by the Northern Power & Light Co.). When MDU examined DPSC's books after the purchase, they spent the next 6 years in litigation with NWPS over allegations of improper internal charges between NWPS, NP&L, and NDP&L. Both companies eventually realized the suit was getting nowhere and called a truce.

With the suit out of the way, MDU refocused its energies on the growing demand for electricity and gas within its newly expanded territory and the necessary system improvements. In the late 1960s, MDU partnered with NWPS and Otter Tail Power in the construction of the Big Stone power plant near Big Stone City, SD. MDU also briefly explored a merger with Otter Tail but both parties decided not to pursue it but have since partnered on two base-load power plants (Big Stone and Coyote). By the 1980s, when the revenue from the utility operations began to level off, it reorganized into MDU Resources and began an aggressive program of diversification into closely related but unregulated industries. This diversification program has succeeded to where the utility operations are no longer the company's main source of revenue. Even so, MDU Resources provides natural gas to about 440,000 residential customers and electricity to about 92,000 residential customers today.

Existing Coal Plants

Plant State Year(s) Built Capacity
R.M. Heskett Station ND 1954, 1963 115 MW
Wygen Unit 3 WY 2010 100 MW

Wygen Unit 3

MDU Rate Hike Hearing February 10, 2010.wmv

The utility division of MDU Resources Group, Montana-Dakota Utilities Co., signed a purchase agreement with Black Hills Corporation for a 25 percent ownership interest in the 100 MW Wygen Unit 3 power generation facility near Gillette, Wyoming. Montana-Dakota will own 25 MW of the plant, which is scheduled to be completed and online in June 2010.[5]

In January 2010, Montana-Dakota Utilities proposed a 25% overall rate hike due to the utility's investment in Wygen Unit 3, after an initial request of 30%. Citizens, particularly the Powder River Basin Resource Council, opposed the hike, as seen in this video.[6]

In March 2010, MDU announced it had reached a settlement for an increase of 16 percent. The Wyoming Public Service Commission has until June 14 to rule on the settlement. In the price settlement, the parties agreed to stipulations including a lower return on equity of 10.9 percent, special provisions for irrigation customers, and a phased-in increase over three years "to mitigate the rate shock effect on customers," according to the agreement.[6]

Black Hills Power has requested an 11.5 percent return on equity.[6]

Coal lobbying

MDU Resources Group is a member of the American Coal Ash Association (ACAA), an umbrella lobbying group for all coal ash interests that includes major coal burners Duke Energy, Southern Company and American Electric Power as well as dozens of other companies. The group argues that the so-called "beneficial-use industry" would be eliminated if a "hazardous" designation was given for coal ash waste.[7]

ACAA set up a front group called Citizens for Recycling First, which argues that using toxic coal ash as fill in other products is safe, despite evidence to the contrary.[7]

Companies

Utility operations span eight states and are offered through four companies:[8]

  • Montana-Dakota Utilities Co.
  • Great Plains Natural Gas Co.
  • Cascade Natural Gas Co.
  • Intermountain Gas Corporation

Shareholders vote for transparency on MDU coal ash

In April 2010, in the first-ever shareholder vote on coal ash practices and disclosure, 25.6% of MDU Resources shareholders voted in support of increased transparency on coal ash risk. The resolution, supported by over 42 million votes, asked the company to report on the its efforts to reduce environmental and health hazards associated with coal waste ponds, impoundments, and mines, and how those efforts reduce risks to the company’s finance and operations. The resolution was filed by Green Century Capital Management (Green Century) and As You Sow.[9]

Coal ash is a byproduct of burning coal that contains arsenic, mercury, lead, and other toxins. The ash is stored in enormous coal waste ponds, landfills, or mines and, according to the EPA, has contaminated groundwater in 24 states. Coal waste is also vulnerable to spills: in 2008, a dam burst at a coal ash pond operated by the Tennessee Valley Authority, covering local communities in toxic sludge. TVA has estimated spill-related costs at $1.2 billion. As of April 2010, coal waste is not subject to federal regulations.[9]

Green Century Capital Management is also urging CMS Energy and Southern Company shareholders to vote in support of similar resolutions on coal ash.[9]

Contact Information

MDU Resources Group, Inc.
1200 W. Century Ave.
P.O. Box 5650
Bismarck, ND 58506
Phone: (800) 437-8000
Website:http://www.mdu.com/

Articles and Resources

Sources

  1. "MDU Home Page", MDU Website, August 2009.
  2. "Corporate Profile", MDU Website, August 2009.
  3. American Legislative Exchange Council, Energy, Environment, and Agriculture Task Force Meeting 2010 States and Nation Policy Summit December 2, 2010 Meeting Minutes, organizational document, March 31, 2011, p. 43, obtained and released by Common Cause April 2012
  4. "MDU Resources Timeline", MDU Website, August 2009.
  5. "MDU Home Page", MDU Website, August 2009.
  6. 6.0 6.1 6.2 Barbara Soderlin,"MDU settles for lower electric rate increase" Rapid City Journal, March 22, 2010.
  7. 7.0 7.1 Coal-Fired Utilities to American Public: Kiss my Ash DeSmogBlog.com & PolluterWatch, October 27, 2010.
  8. "Electric and Natural Gas Distribution", MDU Website, August 2009.
  9. 9.0 9.1 9.2 "Climate-Coal Ash" As You Sow Website, accessed April 2010.

Related SourceWatch Articles

External Articles

Wikipedia also has an article on MDU Resources Group. This article may use content from the Wikipedia article under the terms of the GFDL.