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MDU Resources

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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.

Its two main utility companies are Montana-Dakota Utilities and Cascade Natural Gas. Combined, the two utility operating divisions serve more than 440,000 residential electric and natural gas customers.

Montana-Dakota Utilities was founded as Minnesota Northern Power Company in 1924 by Rolland Heskett. 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; this 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 a 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 eventually passed into MDU ownership).

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 a truce was eventually called.

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 OTP about the same time but the merger was soon called off due to the regulatory hurdles involved (both at the federal level and the five states in which the combined company would have been be operating). In the mid-1980s, with utility revenue leveling off, MDU began diversifying into related businesses and changed its name to MDU Resources.

Natural Gas Utility operations

As of December 2007, MDU Resources' gas operating revenue was US$533 million; its operating income was US$33 million; and its net income was $14 million. Total natural gas assets were valued at US$942 million.

MDU Resources serves about 440,000 residential gas customers.

Electric Utility operations

As of December 2007, MDU Resources' electric operating revenue was US$193 million; its operating income was $32 million; and its net income was US$18 million. Total electric assets were valued at US$429 million.

MDU Resources serves about 92,000 residential electric customers across nearly 200 towns.

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