Hardin power sold to British Columbia

MDU signed a three-year contract with the option of a two-year extension to sell the 116-megawatts of electricity to a Powerex Corp.

Powerex is a subsidiary of BC Hydro based in Vancouver, British Columbia.

BC Hydro is Canada's third-largest electric utility serving 1.8 million customers in British Columbia and industrial 150 customers in the United States, mostly in the Pacific Northwest.

BC Hydro spokeswoman Elisha Moreno said the power produced in Hardin would be sold wholesale to customers in Montana, Idaho, Washington and Oregon.

Powerex has traded power to utilities in Montana for five years, she said, but declined to name which ones. The company sells power wholesale or in large blocks. The Canadian company has no retail sales to homeowners and small businesses in Montana.

"I can say the price was right. It was economic for us," Moreno said. She declined to state the cost of the contract or the power.

In addition to selling to utilities, she said Powerex is looking at selling electricity to big industrial customers in Montana.

"We're one of the larger power movers in the Pacific Northwest area," Moreno said. "We also have some short- and long-term transmission rights in Montana. So, we have no concerns about moving power around the region."

The Hardin deal represents a first for BC Hydro, Moreno said.

"This is one of the first times we've looked at buying the output from a plant that hasn't been constructed yet," she said.

Spokesman Art Thompson at MDU headquarters in Bismarck, N.D., said the company has almost completed the groundwork for the Hardin plant, including foundations and roads. When it is finished at the end of next year, the Hardin plant will employ 33 people.

MDU's subsidiary, Rocky Mountain Power Inc. is building the plant and signed the contract with Powerex.

RMP is a subsidiary of Centennial Energy Resources, which is MDU's nonregulated power arm.

"We expect that 2004 will be another excellent year for MDU Resources, said chief executive and board chairman Martin White.

The company boosted its forecast for the year by about a nickel to between $1.60 to $1.75 per share.

However, the company had disappointing results from two operations.

The company lost nearly $2 million for the quarter on services it sells to utilities. Its rapidly expanding construction materials and mining business lost nearly $12 million for the quarter.

Losses on two projects in the Kansas City area and heavy rain in Texas contributed to the losses, company officials said.

MDU has formed an alliance with some Montana electrical cooperatives to try to buy the assets of NorthWestern Corp., now in bankruptcy court.

NorthWestern took over responsibility to serve the former Montana Power Co. customers in February 2002.