The Sidney herald., 1956-11-29
MDU, Bureau Of
Reclamation Sign
New Agreement

Cecil w. Smith, president c
Montana-Dakota Utilities Co, ha
announced today that MDU ha
entered into a new agreement wit
the Bureau of Reclamation cover
ing the purchase, interchange ant
wheeling of electric power in tn,
Company's service area. The new
agreement extending from Novem
Der 81, 1856 to December 81, 1875
s~upercedes the existing agreemen
between the parties which wa
signed in l945 and which, to
gether with several s~ubsequen
supplemental agreements, was Il
terminate in 1860. Smith said the
new agreement continues a part
nership in distributing govern
ment and company generated pow
er that has proven highly bene-
fetal to all urban and rural res
idents of the are served.
Smith emphasized that the new
agreement broadens and augments
some of the features of the orig
inal agreements. 1t also retains
and supplements certain provi-
sions of these agreements regard
ing the Company purchase of firm
power from the Bureau until 1860.
All basic Stipulations of the new
and previous agreements are cod
flied and include the following
salient points:
ID The 1945 agreement provid-
ed that MDU could purchase
from the Bureau a limited amount
of firm power and varying guam
titles of secondary power IS need
ed and when available. The new
agreement provides that the Com
pany may purchase a maximum
of $4,000 XIV of secondary power
of which $500 XIV is to be firm
power until November 80, 1860.
It is stipulated that the Bureau
may reduce the amount of firm
power to 5000 XIV by giving the
company one years notice. The
Company may purchase more than
$4,000 XIV of secondary power if
excess secondary power is avail
able.
Cd The Company agrees to use
Bureau power whenever economic
benefits result and will pay the
Bureaus Eastern Division STAN
dard wholesale rates for power.
These rates r as follows.
Menth1y Rate for Firm Power
Capacity charge: p15 e klowatt
of bAhng demand
Energy Charge: First ESQ kilowatt
hours per hlowatt o billing demand
at IS mills per kdlowatthour. Balance
of energy used at 80 mills per kilo-
watthour.
The rate for secondary power has
the same energy charge as the firm
power rate. There is no demand
charge, however, provided the Com
pany maintains its generating capaci-
ty In excess OF its system demand
and agrees to purchase system ener-
gy requirements from the Bureau in
heu of operating its own fuel burning
equipment texcept on a standby basis)
when secondary power Is available
and economic benefits result.
90 The Company agrees to supply
the Bureau with surplus power it
may have available when SO request
ed oy the Bureau The company will
al a price of I15E OF the added fuel
cost required to provide the surplus
klowatthours requested by the Bu-
reau. This price snail be not less than
AUS mlis per XVII
t4) The Company and the Bureau
mutually agree to provide standby
service in the C of emergency
such as breakdown of facilities ownei
by either party. consistent with OBJ
legations to the customers of each.
TINS feature OF the agreement is of
Amos importance in maintaining
continuous service TO all residents OF
lie area.
~ Inc Company and the Bureau
agree TO interchange power when
convenient to do SO in the interest
- --LsaY~.-z <Exs-- xl---s- r. /
productive capacity in the integrated
system. Fol example. under certain
operating conditions it might be de-
sLable tor the Bureau to deliver a
quantity of hydro power to MDU in
Montana and IN return receive a like
amount OF MIDI steam-generated pow
er from the Company's Dakota power
plans. This interchange OF power
VIII assure the most efficient opera
ton OF both systems during light load
periods as wen as for peakng pur-
poses.
(o) Under the new agreement MDU
grants a license to the Bureau for
the transmission or wheeling" of
power over company Inc OF 1900
volts or higher (when capacity IS
ayailable) to certain customers of the
Bureau. These customers include gov
eminent irrigation and drainage dis
trlcts, REA -cooperaives for resale
TO farm and rural customers) and
defense plants having a maximum de-
mar Of 1000 XIV or more. The
mill per XVII for this wheeling SER
vice. In Ike manner the Bureau
grants MDU a license TO transmit
Company generated power over its
lines 10 the extent of the available
capacity of the Bureau lines. The
mill per XVIII for this wheeling SER
vice.
Smith stated that INDUS original
agreement with the Bureau, signed in
1915. was the first of its kind in
the United States and served as a
model for similar agreements between
the Bureau and other utilities operat-
ing IN the states where Bureau hydro
power IS available. Under the 1915
cont. act Bureau power has been de-
livered into INDUS transmission sys-
TEN al Glendive. Miles City and Wolf
Point. Montana and at Williston. Wat
ford City. Beulah and Bismarck. N.
Oak.
Bureau power has been transported
over hundreds of miles of INDUS
transmission lines to points in North
Dakota. South Dakota and Montana
where REA cooperatives or others Bu-
reau customers could be served. Ex-
pensive construction costs of dupli-
eating lines were thus avoided and
the Bureau customers have purchased
power olrect from the bureau al uni
form low rates regardless of their To-
cation with respect TO sources of gem
Grafton. MDU has also provided stand
by service from its power plants
which has proven 10 be of great value
in maintaining continuity of service to
Bureau customers.
Smith also pointed TO an existing
indignation program as another factor
that has been helpful to both the
Company and to the IA REA cooper
atives comprising Dakotas Electric
Cooperative. Inc. in planning for the