MDU proposes 21.1% rate increase

  June 25, 2015, Montana-Dakota Utilities Co. (MDU), a division of Montana-Dakota Resources Group, Inc. filed its Application of Montana-Dakota Utilities Co. for Authority to Establish Increased Rates for Electric Service in the State of Montana with the Montana Public Service Commission.

By Sherry Vogel 

MDU’s proposed rates would provide an additional $11,755,752 of annual revenue, a 21.1 percent increase overall. The application also requests an interim increase of $10,977,525. MDU states that it is proposing to increase rates because of compliance with the new Environmental Protection Agency requirements involving coal facilities, the addition of wind and gas turbine facilities, and transmission investments. The proposed rate increase will affect approximately 25,850 electric customers in Montana.

   The tri-fold reasoning MDU states above is best broken down to these facts and figures. Air Quality Control System and Mercury Control Equipment is required at the Big Stone Station,Big Stone City, SD. Montana-Dakota’s investment is $90 million. Montana’s share is $21.8 million. Equipment required at the Lewis &Clark Station,Sidney, MT, to comply with EPA’s Mercury &Air Toxics Standard is at a cost of $16 million. Montana’s share is $3.7 million. New Generation Investments in the form of a wind facility is under construction and scheduled to come online December 2015 at a cost of $220 million. Montana’s share is $56 million. This facility is located in Hettinger, ND. A natural gas-fired plant near Mandan, ND just opened last month at a cost of about $77 million. Montana’s share equaled $12.1 million. Two gas engines are being installed near Lewis and Clark Station in Sidney. Total cost is $43 million. Montana’s share equals $9.8 million. The third area of investment is in Transmission Upgrades. Montana has contributed $5.2 million over the last five years. MDU’s historic transmission sharing service agreement with WAPA&Basin are also joining the Southwest Power Pool causing increased transmission costs for Montana-Dakota to serve its customers. MDU’s robust plan is proposed in order to keep up with a 3.0-3.5percent growth rate forecast over the next five years.