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State regulators approve MDU Resources Group’s purchase of Cascade Natural Gas Company
Docket Number UG-061721 State regulators approve MDU Resources Group’s purchase of Cascade Natural Gas Company OLYMPIA, Wash. – State regulators today approved the $470 million sale of Cascade Natural Gas Company to MDU Resources Group, Inc., a Bismarck, N.D.-based energy company. The Washington Utilities and Transportation Commission (UTC) approved MDU Resources’ purchase on conditions specified in a multi-party settlement agreement. In endorsing the transaction, the UTC said the settlement filed on May 9 ensures that the sale will not result in harm to ratepayers or the broader public interest. The settlement includes 36 comprehensive commitments by Cascade to protect the public-interest. “The commitments preserve the commission’s access to information necessary to its regulatory responsibilities, protect service quality, protect consumers from rate impacts and preserve low-income programs,” said the three-member commission in their written decision. The settlement contains “ring-fencing” measures to shield Cascade financially from the potentially riskier activities of the unregulated parent company, MDU Resources. MDU has agreed to hold Washington customers harmless from any financial exposure to its other affiliates. Beginning in November 2008 and continuing through December 2012, rate credits of $672,000 a year will be shared by all Cascade ratepayers. The adjustment, paid from stockholder funds, will be tied to the annual adjustment to customers’ rates that reflect the change in the wholesale price of natural gas. “These commitments, in conjunction with other commitments that cap allocated costs and provide direct credits to customers provide adequate assurance that there is no financial harm to customers from the transaction,” said the commissioners. Parties to the settlement are: MDU Resources, Cascade, Public Counsel Section of the Office of Attorney General, Northwest Industrial Gas Users, the Energy Project, Boise Cascade and the commission’s regulatory staff, which operates independently of the UTC commissioners in merger proceedings. The three-member commission is the state agency in charge of regulating the private, investor-owned natural gas utilities in Washington. It is the commission’s responsibility to ensure regulated companies provide safe and reliable service to customers at reasonable rates, while allowing them the opportunity to earn a fair profit. MDU Resources Group, headquartered in Bismarck, N.D., announced that it would acquire Cascade Natural Gas Co. last July. The company filed its application with the UTC on Nov. 13. The deal was approved by the federal Department of Justice and Oregon regulators earlier this month. Seattle-based Cascade Natural Gas serves 183,900 residential and business customers in 65 communities in the state, including Bellingham, Bremerton, Mt. Vernon, Aberdeen, Longview, Moses Lake, Kennewick, Walla Walla, Wenatchee and Yakima. ### Editor’s note: A copy of the commission’s order and stipulated agreement is available at the UTC’s Web site: www.wutc.wa.gov/061721 |
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