MDU Resources Group, Inc. (NYSE: MDU) is a U.S. diversified energy company, with electric and natural gas utility distribution operations in Idaho, Minnesota, Montana, North Dakota, Oregon, South Dakota, Washington, and Wyoming.
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 Company, 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), the Eastern Montana Light & Power Company, which was centered around Sidney and Glendive, Montana, and the Eastern Montana Utilities Co. which was based in Fairview, Montana. The two 'Eastern Montana' utilities 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 western North Dakota, it acquired the electric franchise for Miles City, Montana after an acquisition struggle with the Montana Power Company.
Shortly after passage of the Public Utility Holding Company Act of 1935 (PUHCA), Heskett reorganized all the gas and electric subsidiaries of Minnesota Northern Power under a new name—Montana-Dakota Utilities.
Unlike its neighboring utilities, MDU was generally 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 company was originally based in Minneapolis, but by the 1960s, it was decided that the company's headquarters should be located within its service territory. Bismarck was the natural choice as it was the largest town on the system, and the relocation was completed in 1968.
On June 10, 2000, The Westmoreland Coal Company and the Knife River Corporation, a subsidiary of the MDU Resources Group, said that they had entered exclusive talks for the sale of Knife River's coal operations to Westmoreland.
The largest addition of electric utility territory came in 1945, when MDU purchased the Dakota Public Service Company (DPSC) from NorthWestern Public Service Company (NWPS) of Huron, South Dakota. DPSC served a total of 91 towns in west-central North Dakota originally served by the Hughes Electric Company/North Dakota Power & Light Company (NDP&L) and south-central North Dakota/north-central South Dakota originally served by the Northern Power & Light Company (NP&L). When MDU examined DPSC's books after the purchase, they spent the next six years in litigation with NWPS over allegations of improper internal charges between NWPS, NP&L, and NDP&L. Both companies eventually realized the lawsuit was unproductive and they ceased litigation.
After the end of the lawsuit, MDU refocused 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, South Dakota. MDU also briefly explored a merger with Otter Tail but both parties decided not to pursue this. The companies 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 plateau, it reorganized into MDU Resources and began an aggressive program of diversification into closely related but unregulated industries. This diversification program has succeeded to the point 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.
Cascade Natural Gas Corporation, serving parts of Oregon and Washington, was acquired by MDU in 2006. Intermountain Gas Company, serving parts of Idaho, was acquired by MDU in 2008. Knife River Corporation provides construction-related products and services, including aggregate, asphalt, building materials, cement, construction services, liquid asphalt, and ready-mix concrete in 13 states.