ND regulators grant Montana-Dakota Utilities interim 7.9 percent electric rate increase

By Dale Wetzel, AP
Wednesday, June 16, 2010

MDU gets 7.9 percent ND electric rate rise

BISMARCK, N.D. — Montana-Dakota Utilities Co.’s residential customers will see their monthly electric bills rise by $4 or more after North Dakota’s Public Service Commission granted the utility a temporary 7.9 percent rate increase.

The higher costs, which take effect Friday, are part of a larger rate rise that the Bismarck-based utility requested in April. MDU wants a 14 percent increase that would raise its annual electric revenues by $15.4 million. Utility filings say the temporary boost is worth $7.6 million.

Under North Dakota law, utilities that request higher electric rates are entitled to begin collecting temporary increases within two months of their initial rate filing.

“It’s not something that we have any discretion over,” said Kevin Cramer, the commission’s chairman.

The Public Service Commission usually takes about seven months to resolve an electric rate case. If the initial, temporary increase turns out to be too generous, the utility must refund customer overpayments with interest.

Montana-Dakota has more than 75,000 customers in North Dakota, mostly in central and western North Dakota. Its territory includes the cities of Bismarck, Dickinson and Williston.

For a home customer who uses an average of 750 kilowatt-hours of power monthly, the temporary increase will raise his or her bill by $4.49, Commissioner Brian Kalk said.

Cramer said the commission will hold meetings to solicit public comment at North Dakota’s state colleges in Bismarck, Williston and Dickinson at noon July 12, and at 7:30 p.m. July 13. The sessions also will be broadcast over an interactive video network.

The PSC itself will hold a formal hearing at 8:30 a.m. Nov. 8 to take testimony from utility executives and any customers who ask to participate in the case.

The commission is also hiring a consulting firm, Mathai & Associates of Oklahoma City, to help it review MDU’s request. The $125,000 fee that MDU paid to file the rate request will be used to pay the consultants.

Montana-Dakota contends the increase is necessary to allow it to recoup the cost of building a wind farm near Rhame, in North Dakota’s southwestern corner, and another in Baker, Mont., about 30 miles west.

The request also includes MDU’s development costs for some shelved power projects, including MDU’s share of the expense for the proposed Big Stone II power plant near Milbank, S.D.

A group of utilities that were developing the coal-fueled power station dropped it last November, citing concerns about financing and federal carbon dioxide regulation.

“There are some new (electric) resources that are being brought online that appear to make up a large part of the rate increase application,” Commissioner Tony Clark said. “We’re going to be asking a lot of questions about: ‘Were those resources needed? What was the due diligence that the company took to ensure that those resources were the right ones?’”

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