Annual Report (Form 10-K), fiscal year 1994

ITEM 1. BUSINESS
GENERAL DEVELOPMENT OF BUSINESS
Northwestern Public Service Company (Company) is an electric and gas utility engaged in generating, transmitting, distributing, and selling electric energy in eastern South Dakota, where it furnishes electric service to 54,863 customers in more than 100 communities and adjacent rural areas. The Company also purchases, distributes, sells, and transports natural gas to 74,982 customers in four communities in Nebraska and 56 communities in eastern South Dakota. The Company, through its subsidiaries, is also engaged in certain nonutility operations as more fully discussed in the section entitled "Nonutility Operations". The Company was incorporated under the laws of the State of Delaware in 1923 and is qualified to do business in the states of South Dakota, Nebraska, Iowa, and North Dakota. The Company does not serve customers in North Dakota or Iowa. The Company has its principal office at 33 Third Street SE, Huron, South Dakota 57350-1318. Its telephone number is 605-352-8411.
FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
The information required by this item 1(b) is incorporated by reference to Note 10 of the "Notes to Consolidated Financial Statements" on page 24 of the Company's 1994 Annual Report to Stockholders, filed as an Exhibit hereto.
NARRATIVE DESCRIPTION OF BUSINESS
Pursuant to the South Dakota Public Utilities Act, the South Dakota Public Utilities Commission (PUC) assigned as the Company's electric service territory the communities and adjacent rural areas in which the Company provides electric service in South Dakota. The Company has the right to provide electric service to present and future electric customers in its assigned service territory for so long as the service provided is deemed adequate. Under the South Dakota Public Utilities Act, effective July 1, 1976, the Company is not required to obtain or renew municipal franchises to provide electric service within its assigned service territory.
The Company has nonexclusive municipal franchises to provide gas service in the Nebraska and South Dakota communities in which it provides such service. The maximum term permitted under Nebraska law for such franchises is 25 years while the maximum term permitted under South Dakota law is 20 years. The Company's policy is to seek renewal of a franchise in the last year of its term. The Company has never been denied the renewal of any of these franchises and does not anticipate that any future renewals would be withheld.
ELECTRIC BUSINESS
ELECTRIC SALES. On a fully consolidated basis, 46% of the Company's 1994 operating revenues were from the sale of electric energy. All of the Company's electric revenues are derived from customers in South Dakota.
The Company has relatively few large customers in its service territory. By customer category, 33% of 1994 total electric sales was from residential sales, 50% was from commercial and industrial sales, 2% was from street lighting and sales to public authorities, and 15% was from sales for resale.
Sales for resale primarily include power pool sales to other utilities. Power pool sales fluctuate from year to year depending on a number of factors including the Company's availability of excess short-term generation and the ability to sell the excess power to other utilities in the power pool. The Company also sells power and energy at wholesale to certain municipalities for resale and to various governmental agencies. In 1994, these sales accounted for less than 1% of total electric sales.
CAPABILITY AND DEMAND. The Company shares in the ownership of the Big Stone Generating Plant (Big Stone), located near Big Stone City in northeastern South Dakota. In North Dakota, the Company maintains transmission facilities to interconnect with electric transmission lines of other utilities and shares in the ownership of the Coyote I Electric Generating Plant (Coyote), located near Beulah, North Dakota. In Iowa, the Company shares in the ownership of Neal Electric Generating Unit #4 (Neal), located near Sioux City.
At December 31, 1994, the aggregate net summer peaking capacity of all Company-owned electric generating units was 309,480 mw, consisting of 105,711 kw from Big Stone (the Company's 23.4% share), 42,600 kw from Coyote (the Company's 10.0% share), 54,169 kw from Neal (the Company's 8.7% share), and 107,000 kw from internal combustion turbine units and small diesel units, used primarily for peaking purposes.
The Company is a summer peaking utility. The 1994 peak demand of 229,922 occurred on July 18, 1994. Total system capability at the time of peak was 309,480 kw. The reserve margin for 1994 was 35%. The minimum reserve margin requirement as determined by the members of the Mid- Continent Area Power Pool (MAPP), of which the Company is a member, is 15%.
MAPP is an area power pool arrangement consisting of utilities and power suppliers having transmission interconnections located in a 9-state area in the North Central region of the United States and in two Canadian provinces. The objective of MAPP is to accomplish coordination of planning and operation of generation and interconnecting transmission facilities to provide reliable and economical electric service to members' customers, consistent with reasonable utilization of natural resources and protection of the environment. While benefiting from the advantages of the planning, coordination, and operations of MAPP, each member has the right and obligation to own or otherwise provide the facilities to meet its own requirements. The terms and conditions of the MAPP agreement and transactions between MAPP members are subject to the jurisdiction of the FERC. The MAPP agreement was accepted for filing by the FERC effective 1972. The Company also has interconnections with the transmission facilities of Otter Tail Power Company, Montana-Dakota Utilities Co., Northern States Power Company, and WAPA; and has emergency interconnections with transmission facilities of East River Electric Cooperative, Inc. and West Central Electric Cooperative. These interconnections and pooling arrangements enable the Company to arrange purchases or sales of substantial quantities of electric power and energy with other pool members and to participate in the benefits of pool arrangements.
The Company is finalizing an integrated resource plan to identify how it will meet the energy needs of its customers. The plan includes estimates of customer usage and programs to provide for economic, reliable, and timely supplies of energy. The plan does not anticipate the need for additional baseload generating capacity for at least the next ten years.
FUEL SUPPLY. Lignite and sub-bituminous coal were utilized by the Company as fuel for virtually all of the electric energy generated during 1994. North Dakota lignite is the primary fuel at Big Stone and Coyote I. During 1994, the average heating value of lignite burned was 6,049 BTU per pound at Big Stone and 6,922 BTU per pound at Coyote I. The sulfur content of this lignite is typically between 0.80% and 1.2%. Neal #4 burns Wyoming sub-bituminous coal which had an average heating value of 8,450 BTU per pound during 1994. Typically, the sulphur content of this coal is between 0.30% and 0.40%.
The Company's fuel costs have remained relatively stable. The average costs of fuels burned are shown below for the periods indicated:
Cost Per Million BTU % of 1994 Year Ended December 31 Megawatt Hours Fuel Type 1992 1993 1994 Generated --------- ---- ---- ---- --------------
Lignite - Big Stone $1.16 $1.12 $1.10 47% Lignite - Coyote I** .81 .84 .86 21% Sub-bituminous - Neal #4 .77 .76 .74 32% Natural Gas 2.62 2.37 2.21 * Oil 4.29 3.90 3.90 *
*Less than one-half of one percent. **Includes pollution control reagent.
During 1994, the average delivered cost per ton of lignite was $13.13 to Big Stone and $10.99 to Coyote I. The average cost for coal delivered to Neal #4 was $11.95 per ton for 1994. Such amounts include severance taxes imposed by the state of North Dakota on lignite and a production tax imposed by the state of Wyoming on other coal. While the effect on the Company's fuel costs of future changes in severance or production taxes cannot be predicted, any unforeseen changes in the Company's fuel costs may be passed on to its customers through the operation of the fuel adjustment clause. This feature of the Company's electric rates is more fully discussed in the section entitled "Regulation".
The continued delivery of lignite and sub-bituminous coal to the three large steam generating units in which the Company is part owner is reasonably assured by contracts covering various periods of the operating lives of these units. The Big Stone contract provides for adequate supplies of lignite through purchases under the primary contract, which expires in mid-1995. Following bid evaluations of coal supplies for the Big Stone Plant, a contract for Montana sub-bituminous coal was secured during 1994 for the period of mid-1995 through 1999. Further evaluations will be conducted during the contract term to select a coal supply for periods beyond 1999. The contract for delivery of lignite to the Coyote I plant, which expires in 2016, provides for an adequate fuel supply for the estimated economic life of that plant. Neal #4 receives Wyoming sub- bituminous coal under a long-term contract which expires in 1998. In the near future, the Company, along with the other owners of Neal #4, will begin to study options for the supply of coal for periods beyond the expiration date.
Following test burns in 1990 and 1991, the owners of the Big Stone plant received approval from the South Dakota Department of Environment and Natural Resources to burn tire derived fuel (TDF) and refuse derived fuel (RDF). The quantity of TDF and RDF that was burned in 1994 and that is expected to be burned in 1995 is insignificant when compared to total coal consumption at the plant.
The fossil fuel supplies for the Big Stone and Neal #4 plants are delivered via unit trains belonging to the respective plants' owners and locomotives of the Burlington Northern Railroad and the Chicago and Northwestern Railroad, respectively. The lignite supply for Coyote I is delivered via conveyor at this "mine-mouth" plant.
While the Company has no firm contract for diesel fuel for its other electric generating plants, it has been able to purchase its diesel fuel requirements in recent years from local suppliers and currently has in storage an amount adequate to satisfy its normal requirements for such fuel.
Additional information relating to jointly owned plants is incorporated by reference to Note 6 of the "Notes to Consolidated Statements" on page 22 of the Company's 1994 Annual Report to Stockholders filed as an Exhibit hereto.
GAS BUSINESS
GAS SALES AND DEMAND. On a fully consolidated basis, 40% of the Company's 1994 operating revenues were from the sale of gas energy. During 1994, the Company derived 56% of its gas revenues from South Dakota and 44% from Nebraska. The Company's peak daily sendout was 128,700 MMBTU.
CAPABILITY AND SUPPLY. The Company owns and operates natural gas distribution systems serving 36,259 customers in eastern South Dakota, for which it purchases gas from various gas marketing firms under gas transportation service agreements with various gas marketing firms. These agreements provide for firm deliverable pipeline capacity of approximately 49,300 MMBTU per day in South Dakota. The Company has service agreements with Northern Natural Gas Company (NNG) providing for firm transportation of natural gas. While NNG has eliminated nearly all of its gas supply activities, the Company has supply contracts in place and peak shaving capacity to meet its peak day system needs.
In Nebraska, the Company owns and operates natural gas distribution systems serving 38,723 retail customers in the village of Alda and the cities of Grand Island, Kearney, and North Platte, Nebraska. The Company purchases much of its natural gas for these systems from KN Gas Supply Co. under a seven-year service agreement entered in 1993. The Company also purchases certain quantities of gas for its Nebraska customers from various gas marketing firms. These agreements provide for firm deliverable pipeline capacity of approximately 49,600 MMBTU per day in Nebraska.
In 1992, the Federal Energy Regulatory Commission (FERC) issued Order 636. Order 636 requires, among other provisions, that all companies with natural gas pipelines separate natural gas supply or production services from transportation service and storage businesses. This allows gas distribution companies, such as the Company, and individual customers to purchase gas directly from producers, third parties, and various gas marketing entities and transport it through the suppliers' pipelines. Both NNG and KN Interstate Gas Transmission Co. (KN) have completed restructuring proceedings with the FERC under Order 636 in which their transportation, sales, and storage services were changed. The Company has operated under the restructured environment during the past two years.
To supplement firm gas supplies, the Company also has contracts for underground natural gas storage services to meet the heating season and peak day requirements of its gas customers. In addition, the Company also owns and operates six propane-air plants with a total rated capacity of 18,000 MMBTU per day, or approximately 14% of peak day requirements. The propane-air plants provide an economic alternative to pipeline transportation charges to meet the extreme peaks caused by customer demand on extremely cold days.
A few of the Company's industrial customers purchase their natural gas requirements directly from gas marketing firms for transportation and delivery through the Company's distribution system. The transportation rates have been designed to make the Company economically indifferent as to whether the Company sells and transports gas or only transports gas.
COMPETITION
Although the Company's electric service territory is assigned according to the South Dakota Public Utilities Act, and the Company has the right to provide electric service to present and future electric customers in its assigned service area for so long as the service provided is deemed adequate, the energy industry in general has become increasingly competitive. Electric service also competes with other forms of energy and the degree of competition may vary from time to time depending on relative costs and supplies of other forms of energy.
The National Energy Policy Act of 1992 was designed to promote energy efficiency and increased competition in the electric wholesale markets. The Energy Act also allows the FERC to order wholesale wheeling by public utilities to provide utility and nonutility generators access to public utility transmission facilitates. The provision allows the FERC to set prices for wheeling, which will allow utilities to recover certain costs from the companies receiving the services, rather than the utilities' retail customers. Many states are currently considering retail wheeling, which aims to provide all customers with the right to choose their electricity supplier. No regulatory proposals have yet been formally introduced in South Dakota.
Federal Energy Regulatory Commission Order 636 requires, among other provisions, that all companies with natural gas pipelines separate natural gas supply or production services from transportation service and storage businesses. This allows gas distribution companies, such as the Company, and individual customers to purchase gas directly from producers, third parties, and various gas marketing entities and transport it through the suppliers' pipelines. While Order 636 had positive aspects by providing for more diversified supply and storage options, it also required the Company to assume responsibility for the procurement, transportation, and storage of natural gas. The alternatives now available under Order 636 create additional pressure on all distribution companies to keep gas supply and transportation pricing competitive, particularly for large customers.
REGULATION
The Company is a "public utility" within the meaning of the Federal Power Act and the South Dakota Public Utilities Act and, as such, is subject to the jurisdiction of, and regulation by, FERC with respect to issuance of securities, the PUC with respect to electric service territories, and both FERC and the PUC with respect to rates, service, accounting records, and in other respects. The State of Nebraska has no centralized regulatory agency which has jurisdiction over the Company's operations in that state; however, the Company's natural gas rates are subject to regulation by the municipalities in which it operates.
Under the South Dakota Public Utilities Act, enacted in 1975, a requested rate increase may be implemented by the Company 30 days after the date of its filing unless its effectiveness is suspended by the PUC and, in such event, can be implemented subject to refund with interest six months after the date of filing, unless sooner authorized by the PUC. The Company's electric rate schedules provide that it may pass along to all classes of customers qualified increases or decreases in the cost of fuel used in its generating stations and in the cost of fuel included in purchased power. A purchased gas adjustment provision in its gas rate schedules permits the company to pass along to gas customers increases or decreases in the cost of purchased gas.
The Company filed no electric rate cases in South Dakota during the three years ended December 31, 1994. On May 26, 1994, the Company filed for a $2.4 million increase in South Dakota natural gas revenues. As a result of a negotiated settlement with the South Dakota Public Utilities Commission, on November 15, 1994, the Company implemented rates which will produce additional annual natural gas revenues of $2.1 million, assuming normal weather, representing an overall increase of 6.2%. On December 30, 1994, the Company filed for increased rates applicable to the Nebraska natural gas service area. The proposal, which would increase overall revenues for a year with normal weather by $2.7 million or 9.6%, cannot become effective before April 1, 1995 based upon provisions of the Municipal Natural Gas Regulation Act passed in 1986.
ENVIRONMENTAL MATTERS
The Company is subject to regulation with regard to air and water quality, solid waste disposal, and other environmental considerations by Federal, state, and local governmental authorities. The application of governmental requirements to protect the environment involves or may involve review, certification, issuance of permits, or similar action by government agencies or authorities, including the United States Environmental Protection Agency (EPA), the South Dakota Department of Environment and Natural Resources (DENR), the North Dakota State Department of Health, and the Iowa Department of Environmental Quality, as well as compliance with decisions of the courts. Such requirements, particularly with regard to emissions into the air and water, may substantially increase the cost to the Company of construction and operation of electric generating facilities. Such requirements may also necessitate additional investments in new equipment at existing installations.
CLEAN AIR ACT. The Clean Air Act Amendments of 1990 (the Clean Air Act) which stipulate limitations on sulfur dioxide and nitrogen oxide emissions from certain coal-fired power plants will require the purchase of additional emission allowances or a reduction in sulfur dioxide emissions beginning in the year 2000 from Big Stone. The Company believes Big Stone can most economically meet the sulfur dioxide emission requirements of the Clean Air Act by switching its fuel source from North Dakota lignite to low- sulfur western sub-bituminous coal available in the region. The Company's other baseload plants, Coyote I and Neal #4, are expected to comply with the sulfur dioxide emission limitations through the use of existing flue gas scrubbing and low sulfur coal without the need for additional emission allowances.
With regard to the Clean Air Act's nitrogen oxide emission requirements, the Neal #4 wall-fired boiler is expected to meet the emission limitations for such boilers. The Clean Air Act does not yet specify nitrogen oxide limitations for boilers with cyclone burners such as those used at Big Stone and Coyote I because practical low-nitrogen oxide cyclone burner technology does not exist. It requires the EPA to establish nitrogen oxide emission limitations before 1997 for cyclone boilers including consideration that the cost to accomplish such limits be comparable to retrofitting low-nitrogen oxide burner technology to other types of boilers. In addition, it also requires future studies to determine what controls, if any, should be imposed on coal-fired boilers to control emissions of certain air toxics other than sulfur and nitrogen oxides. Because of the uncertain nature of cyclone boiler nitrogen oxide and air toxic emission limits, the Company cannot now determine the additional costs, if any, it may incur due to these provisions of the Clean Air Act.
PCBs. The Company has met or exceeded the removal and disposal requirements of equipment containing polychlorinated biphenyls (PCBs) as required by state and federal regulations. The Company will use some PCB- contaminated equipment for its remaining useful life, and dispose of the equipment according to pertinent regulations that govern that use and disposal of this equipment. PCB-contaminated oil is burned for energy recovery at a permitted facility.
STORAGE TANKS. The South Dakota DENR and the EPA adopted regulations imposing requirements upon the owners and operators of aboveground and underground storage tanks. The Company's fuel oil storage facilities at its generating plants in South Dakota are affected by the aboveground tank regulations, and the Company has instituted procedures for compliance.
SITE REMEDIATION. The Company conducted an investigation of a manufactured gas plant (MGP) site and is taking remedial action to dispose of waste material found at such site. Recovery of remediation costs for such sites will be sought from insurance carriers and through the regulatory process although there is no assurance that such costs will be recovered.
COMPLIANCE. In addition to the Clean Air Act, the Company is also subject to other environmental regulations. The Company believes that it is in compliance with all presently applicable environmental protection requirements and regulations. However, the Company is unable to forecast the effect which future environmental regulations may ultimately have upon the cost of its facilities and operations. No administrative or judicial proceedings involving the company are now pending or known by the Company to be contemplated under presently effective environmental protection requirements.
SITING. The states of South Dakota, North Dakota, and Iowa have enacted laws with respect to the siting of large electric generating plants and transmission lines. The South Dakota PUC, the North Dakota Public Service Commission, and the Iowa Utilities Board have been granted authority in their respective states to issue site permits for nonexempt facilities.
CAPITAL SPENDING AND FINANCING
The Company's primary capital requirements include the funding of its utility construction and expansion programs, the funding of debt and preferred stock retirements and sinking fund requirements, and the funding of its corporate development and investment activities.
The emphasis of the Company's construction activities is to undertake those projects that most efficiently serve the expanding needs of its customer base, enhance energy delivery capabilities, expand its current customer base, and provide for the reliability of energy supply. Capital expenditure plans are subject to continual review and may be revised as a result of changing economic conditions, variations in sales, environmental requirements, investment opportunities, and other ongoing considerations.
Expenditures for construction activities for 1994, 1993, and 1992 were $22.7 million, $20.0 million, and $18.5 million. Construction expenditures during the last three years included expenditures related to the installation of an additional 43 mw of internal peaking capacity, the expansion of the Company's natural gas system into 29 additional communities in eastern South Dakota, and to an operations center which will provide future cost savings and operating efficiencies through consolidation of activities. Construction expenditures for 1995 are estimated to be $19.3 million. The majority of the projected expenditures will be spent on enhancements of the electric and gas distribution systems and completion of the operations center. Estimated construction expenditures for the years 1995 through 1999 are expected to be $69 million.
Capital requirements for the mandatory retirement of long-term debt and the mandatory preferred stock sinking fund redemption totaled $600,000, $180,000, and $513,000, for the years ended 1994, 1993, and 1992. It is expected that such mandatory retirements will be $600,000 in 1995, $1,080,000 in 1996, $570,000 in 1997, $20.6 million in 1998, and $13.5 million in 1999.
The Company anticipates that future capital requirements will be met by both internally generated cash flows and available external financing.
The Company will continue to evaluate and pursue opportunities to enhance shareholder return through nonregulated business investments. Nonregulated projects are expected to be financed from the existing investment portfolio and from other available financing options.
Information relating to capital resources and liquidity is incorporated by reference to "Management's Discussion and Analysis" on pages 12-14 of the Company's 1994 Annual Report to Stockholders, filed as an Exhibit hereto.
NONUTILITY OPERATIONS
GRANT, INC. Grant, Inc., which holds title to property not used in the Company's utility business, was incorporated in South Dakota in 1972.
NORTHWESTERN GROWTH CORPORATION (NGC). NGC was incorporated under the laws of South Dakota in 1994 to pursue and manage nonutility investments and development activities. Although the primary focus of NGC's investment program will be to seek growth opportunities in the energy, energy equipment, and energy services industries, NGC will also continue to pursue opportunities in existing and emerging growth entities in nonenergy industries that meet return and capital gain requirements. Along with a portfolio of marketable securities, NGC's assets include the investments of two subsidiaries: Northwestern Networks, Inc. and Northwestern Systems, Inc.
NORTHWESTERN NETWORKS, INC. (NNI). NNI was incorporated in South Dakota in 1986. NNI holds a common stock investment in LodgeNet Entertainment Corporation, a provider of television entertainment and information systems to hotels and motels.
NORTHWESTERN SYSTEMS, INC. (NSI). NSI was incorporated in South Dakota in 1986. In December 1992, NSI acquired a 60% common stock ownership in Lucht, Inc., a firm that develops, manufactures, and markets multi-image photographic printers and other related equipment. On October 1, 1993, NSI acquired the remaining 40% common stock interest in that company.
Additional information relating to nonutility business is incorporated by reference to "Management's Discussion and Analysis" on pages 12-14 of the Company's 1994 Annual Report to Stockholders filed as an Exhibit hereto.
EMPLOYEES
At December 31, 1994, the Company had 452 employees. A three-year collective bargaining agreement which expires June 30, 1995, covers 252 operating and clerical employees. The Company has never experienced a work stoppage or strike and considers its relationship with its employees to be very good.
ITEM 2.



ITEM 2. PROPERTIES
ELECTRIC PROPERTY
The Company's electric properties consist of an interconnected and integrated system. The Company, Otter Tail, and MDU jointly own Big Stone, a 455,783 kilowatt (kw) nameplate capacity lignite-fueled electric generating plant and related transmission facilities. Big Stone is operated by Otter Tail for the benefit of the owners. The Company owns 23.4% of the Big Stone Plant.
The Company is one of four power suppliers which jointly own Coyote I, a 455,783 kw nameplate capacity lignite-fueled electric generating plant and related transmission facilities located near Beulah, North Dakota. The Company has a 10% interest in Coyote I, which is operated by MDU for the benefit of the owners.
The Company is one of 14 power suppliers which jointly own Neal #4, a 639,999 kw nameplate capacity coal-fueled electric generating plant and related transmission facilities located near Sioux City, Iowa. Midwest Power Systems, Inc. is principal owner of Neal #4 and is the operator of the unit. The Company has an 8.7% interest in Neal #4.
The Company has an undivided interest in these jointly owned facilities and is responsible for its proportionate share of the capital and operating costs while being entitled to its proportionate share of the power generated. Each participant finances its own investment. The Company's interest in each plant is reflected in the Consolidated Balance Sheet on a pro rata basis, and its share of operating expenses is reflected in the Consolidated Statement of Income and Retained Earnings.
In addition to its interest in Big Stone, Coyote I, and Neal #4, the Company owns and operates 19 oil and gas-fired units for peaking and reserve capacity.
As of December 31, 1994, the aggregate nameplate capacity of all Company-owned electric generating units is 327,419 kw, with an aggregate net summer peaking capacity of 309,480 kw and a net winter peaking capacity of 327,542 kw. The Company's maximum peak hourly demand of 251,493 kw occurred on July 17, 1991. In 1994, the Company's peak hourly demand was 229,922 kw and occurred on July 18, 1994.
The Company's interconnected transmission system consists of 318.5 miles operating at 115 kilovolts (kv) and 896.7 miles operating at 69 kv and 34.5 kv. The Company also owns three segments of transmission line, which are not tied to its internal system, in connection with its joint ownership in the three large steam generating plants. These lines consist of 18.2 miles of 230 kv line from Big Stone, 25.4 miles of 345 kv line from Neal #4, and 23.1 miles of 345 kv line from Coyote I. In addition to these lines, the Company owns 1,717.2 miles of distribution lines serving customers in more than 100 communities and adjacent rural areas. The company owns 38 transmission substations with a total rated capacity of 1,111,417 kilovolt amperes (kva), two mobile substations with a total rated capacity of 5,500 kva and 78 distribution substations with a total rated capacity of 358,449 kva.
GAS PROPERTY
On December 31, 1994, the Company owned 999 miles of distribution mains and appurtenant facilities in South Dakota. The Company also owns propane-air facilities in Aberdeen, Brookings, Huron, and Mitchell, South Dakota, having a total rated capacity of 15,280 MMBTU per day, which are operated for standby and peak shaving purposes only.
On December 31, 1994, the Company owned 649 miles of distribution mains and appurtenant facilities in Nebraska. The Company also owns propane-air facilities at Kearney and North Platte, Nebraska, having a total rated capacity of 9,380 MMBTU per day, which are operated for standby and peak shaving purposes only.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS
The Company is not currently involved in any pending major litigation.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No issues were submitted to a vote of security holders during the last quarter of the period covered by this report.
PART II
ITEM 5.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's common stock is listed on the New York Stock Exchange (NYSE) under the ticker symbol NPS. Common stock was registered in the names of 8,132 stockholders at December 31, 1994. The payment of dividends is subject to the restrictions described in Note 2 of the "Notes to Consolidated Financial Statements" on page 21 of the Company's 1994 Annual Report to Stockholders, filed as an Exhibit hereto.
QUARTERLY COMMON STOCK INFORMATION
1994 High Low Dividends ---- ---- --- --------- First $29 $26 $.415 Second 29 5/8 26 .415 Third 29 3/8 27 1/2 .415 Fourth 28 7/8 24 1/2 .425
1993 High Low Dividends ---- ---- --- --------- First $29 1/2 $26 1/4 $.405 Second 31 1/2 28 3/4 .405 Third 33 1/2 29 1/4 .405 Fourth 32 1/2 28 1/2 .415
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA
1994 1993 1992 1991 1990 ---- ---- ---- ---- ---- (in thousands, except per share amounts)
Operating Revenues $157,266 $153,257 $119,197 $122,900 $115,980 Net Income 15,440 15,191 13,721 14,815 17,506 Earnings Per Common Share 2.00 1.96 1.77 1.88 2.23 Dividends Per Common Share 1.670 1.630 1.590 1.535 1.475 Total Assets 359,066 343,574 308,194 297,761 283,073 Long-Term Debt 127,623 127,200 106,572 93,236 79,469 Redeemable Preferred Stock 40 70 100 2,990 3,185
Selected financial data includes the operating results and balance sheet amounts for Lucht, Inc. effective December 1, 1992, the date of acquisition. Additional information relating to Lucht, Inc. is incorporated by reference to "Management's Discussion and Analysis" on pages 12-14 of the Company's 1994 Annual Report to Stockholders, filed as an Exhibit hereto.
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF OPERATION
The information required by this Item 7 is incorporated by reference to "Management's Discussion and Analysis" on pages 12-14 of the Company's 1994 Annual Report to Stockholders, filed as an Exhibit hereto.
ITEM 8.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item 8 is incorporated by reference to the Company's financial statements and related footnotes on pages 16-24 of the Company's 1994 Annual Report to Stockholders, filed as an Exhibit hereto.
ITEM 9.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There have been no changes in accountants or disagreements on accounting principles or practices or financial statement disclosures.
PART III
ITEM 10.



ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a) IDENTIFICATION OF DIRECTORS
The information regarding directors required by this Item 10 and paragraphs (a) and (e) of Item 401 of Regulation S-K is incorporated by reference to the information under "Election of Directors" in the Company's definitive Proxy Statement dated March 24, 1995, and filed with the Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934 within 120 days after the close of the Company's fiscal year ended December 31, 1994.
(b) & (e) IDENTIFICATION AND BUSINESS EXPERIENCE OF EXECUTIVE OFFICERS
R. A. Wilkens, Chairman of the Board, age 66
Chairman of the Board of Directors since February 1994. Formerly Chief Executive Officer from 1990-1994; formerly President from 1980-1994.
M. D. Lewis, President and Chief Executive, age 47
President and Chief Executive Officer since February 1994; formerly Executive Vice President-Corporate Services 1992-1994; formerly Vice President-Corporate Services 1987-1992; Assistant Vice President-Corporate Services 1985-1987.
W. D. Craig, Vice President, age 58
Vice President since November 1994; formerly Vice President-Gas Operations September 1988-November 1994; Assistant Vice President-Gas Operations June, 1988-September 1988; Manager-Gas Operations March 1988-June 1988. Joined the Company in 1988. Formerly President & COO of Hoosier Gas Corporation 1987-1988. Formerly Director-Gas Operations of SIGECO 1985-1987.
A. D. Dietrich, Vice President-Corporate Services, age 44
Vice President-Corporate Services since November 1994; Corporate Secretary since October 1989; formerly Vice President-Legal May 1990-November 1994; Assistant Corporate Secretary September 1989-October 1989; Corporate Attorney 1978-1989.
A. R. Donnell, Vice President-Energy Operations, age 51
Vice President-Energy Operations since November 1994; formerly Vice President-Electric Operations July 1987-November 1994; Assistant Vice President-Electric Operations June 1987-July 1987; Manager-Electric Distribution 1985-June 1987; Manager-Special Projects 1977-1985.
T. A. Gulbranson, Vice President, age 47
Vice President since November 1994; formerly Vice President-Corporate Services May 1993-November 1994; Vice President-Community Development 1988- 1993; formerly Division Manager-Webster 1983-1988.
R. R. Hylland, Vice President-Finance and Corporate Development, age 34
Vice President-Finance and Corporate Development since November 1994; formerly Vice President-Finance and Corporate Development and Treasurer May 1993-November 1994; Vice President-Finance and Treasurer 1991-1994; Treasurer and Controller December 1990-April 1991; Controller and Assistant Treasurer November 1989-December 1990; Controller July 1989-November 1989. Joined the Company in July 1989. Formerly Senior Audit and Financial Consulting Manager with Arthur Andersen & Co. Mr. Hylland also serves as President and Chief Operating Officer of Northwestern Growth Corporation since November 1994.
R. F. Leyendecker, Vice President-Energy Services, age 49
Vice President-Energy Services since November 1994; formerly Vice President- Rates & Regulation 1987-November 1994; Assistant Vice President-Rates & Regulation 1985-1987.
W. K. Lotsberg, Vice President-Public Affairs, age 52
Vice President-Public Affairs since May 1994; formerly Vice President- Consumer Affairs March 1989-May 1994; Manager-Public Affairs from 1980 to 1989.
D. C. Oberlander, Assistant Vice President, age 49
Assistant Vice President since May 1994; formerly Controller April 1991-May 1994; Assistant Controller December 1990-April 1991; Manager-Information Systems 1979-1990.
R. A. Thaden, Treasurer, age 43
Treasurer since November 1994; formerly Manager-Corporate Accounting 1987- November 1994.
All of the executive officers of the registrant serve at the discretion of the Board and are elected annually by the Board of Directors following the Annual Meeting of Stockholders except for the positions of Controller, Assistant Treasurer and Assistant Corporate Secretary, which are appointed by the Board of Directors. No family relationships exist between any officers of the Company.
(c) IDENTIFICATION OF CERTAIN SIGNIFICANT EMPLOYEES
None
(d) FAMILY RELATIONSHIPS
None
(f) INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
None
(g) PROMOTERS AND CONTROL PERSONS
None
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item 11 is incorporated by reference to the information under "Compensation of Directors and Executive Officers" in the Company's definitive Proxy Statement dated March 24, 1995, and filed with the Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934 within 120 days after the close of the Company's fiscal year ended December 31, 1994.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item 12 is incorporated by reference to the information under "Securities Ownership by Directors and Officers" in the Company's definitive Proxy Statement dated March 24, 1995, and filed with the Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934 within 120 days after the close of the Company's fiscal year ended December 31, 1994.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has no relationships or transactions covered by this item.
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) DOCUMENTS FILED AS PART OF THIS REPORT
1. Financial Statements
The following items are included in this annual report by reference to the registrant's Annual Report to Stockholders for the year ended December 31, 1994: Page in Annual Report to Stockholders --------------- Financial Statements:
Consolidated Statement of Operations and Retained Earnings for the Three Years Ended December 31, 1994 16
Consolidated Statement of Cash Flows for the Three Years Ended December 31, 1994 17
Consolidated Balance Sheet, December 31, 1994 and 1993 18
Consolidated Statement of Capitalization, December 31, 1994 and 1993 19
Notes to Consolidated Financial Statements 20-24
Quarterly Unaudited Financial Data for the Two Years Ended December 31, 1994 24
Report of Independent Public Accountants 15
2. Financial Statement Schedules
The following supplemental financial data included herein should be read in conjunction with the financial statements referenced above:
Page in Form 10-K ---------
Report of Independent Public Accountants Following Signatures
Schedule VIII - Valuation and Qualifying Accounts Following Report of Independent Public Accountants
Schedules other than those listed above are omitted because of the absence of the conditions under which they are required or because the information required is included in the financial statements or the notes thereto.
(b) REPORTS ON FORM 8-K
No reports on Form 8-K have been filed during the quarter ended December 31, 1994.
(c) EXHIBITS
See Exhibit Index.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
NORTHWESTERN PUBLIC SERVICE COMPANY
/s/ M. D. Lewis --------------------------------------- M. D. Lewis, Director and President and Chief Executive Officer March 15, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
/s/ R. A. Wilkens --------------------------------------- R. A. Wilkens, Chairman of the Board of Directors
/s/ M. D. Lewis --------------------------------------- M. D. Lewis, Director and President and Chief Executive Officer
/s/ R. R. Hylland --------------------------------------- R. R. Hylland, Vice President-Finance & Corporate Development (Principal Financial Officer)
/s/ Rogene A. Thaden --------------------------------------- Rogene A. Thaden, Treasurer (Principal Accounting Officer)
/s/ Jerry W. Johnson --------------------------------------- Jerry W. Johnson, Director
/s/ Aelred J. Kurtenbach --------------------------------------- Aelred J. Kurtenbach, Director
/s/ Herman Lerdal --------------------------------------- Herman Lerdal, Director
/s/ Larry F. Ness --------------------------------------- Larry F. Ness, Director
/s/ Raymond M. Schutz --------------------------------------- Raymond M. Schutz, Director
/s/ Bruce I. Smith --------------------------------------- Bruce I. Smith, Director
/s/ W. W. Wood --------------------------------------- W. W. Wood, Director
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Northwestern Public Service Company:
We have audited in accordance with generally accepted auditing standards, the consolidated financial statements included in Northwestern Public Service Company's annual report to shareholders incorporated by reference in this Form 10-K, and have issued our report thereon dated January 27, 1995. Our audit was made for the purpose of forming an opinion on those statements taken as a whole. The supplemental financial information and schedule listed in the table of contents of financial statements are the responsibility of the Company's management and are presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. This information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Minneapolis, Minnesota, January 27, 1995
EXHIBIT INDEX TO ANNUAL REPORT ON FORM 10-K FOR YEAR ENDED DECEMBER 31, 1994
(3) ARTICLES OF INCORPORATION AND BY-LAWS
3(a)(1)
Registrant's Restated Certificate of Incorporation, dated February 7, 1990, is incorporated by reference to Exhibit 3(a)(1) to Form 10-K for the year ended December 31, 1989, Commission File No. 0-692.
3(a)(2)
Certificate of Retirement of Preferred Stocks, dated January 13, 1992, is incorporated by reference to Exhibit 3(a)(2) to Form 10-K for the year ended December 31, 1991, Commission File No. 0-692.
3(b)
Registrant's By-Laws, as amended, dated December 1, 1990, are incorporated by reference to Exhibit 3(b) to Form 10-K for the year ended December 31, 1990, Commission File No. 0-692.
(4) INDENTURES AND POLLUTION CONTROL FACILITY OBLIGATIONS
4(a)(1)
Indenture, dated August 1, 1940, executed by the Company to The Chase Manhattan Bank (N.A.) and J. J. O'Connell, as Trustees, and supplemental and amendatory indentures thereto are incorporated by reference to Exhibit 2 to Form 12-K for the year ended December 31, 1970, Commission File No. 2-4472.
4(a)(2)
Supplemental Indenture, dated August 1, 1972, executed by the Company to The Chase Manhattan Bank (N.A.) and J. J. O'Connell, as Trustees, is incorporated by reference to Exhibit 2 to Form 8-K for the month of August, 1972, Commission File No. 2-4472.
4(a)(3)
Supplemental Indenture, dated July 1, 1973, executed by the Company to The Chase Manhattan Bank (N.A.) and J. J. O'Connell, as Trustees, is incorporated by reference to Exhibit 1 to Form 8-K for the month of July, 1973, Commission File No. 2-4472.
4(a)(4)
Supplemental Indenture, dated November 14, 1974, executed by the Company to The Chase Manhattan Bank (N.A.) and J. J. O'Connell, as Trustees, is incorporated by reference to Exhibit 1 to Form 8-K for the month of November, 1974, Commission File No. 2-4472.
4(a)(5)
Supplemental Indenture, dated May 1, 1975, executed by the Company to The Chase Manhattan Bank (N.A.) and J. J. O'Connell, as Trustees, is incorporated by reference to Exhibit 2 to Form 8-K for the month of May, 1975, Commission File No. 2-4472.
4(a)(6)
Supplemental Indenture, dated June 1, 1977, executed by the Company to The Chase Manhattan Bank (N.A.) and J. J. O'Connell, as Trustees, is incorporated by reference to Exhibit 2(a)(34) to Registration Statement on Form S-7 (Reg. No. 2-58825).
4(a)(7)
Supplemental Indenture, dated July 1, 1978, executed by the Company to The Chase Manhattan Bank (N.A.) and J. J. O'Connell, as Trustees, is incorporated by reference to Exhibit 2(a)(43) to Registration Statement on Form S-7 (Reg. No. 2-63083).
4(a)(8)
Supplemental Indenture, dated December 1, 1978, executed by the Company to The Chase Manhattan Bank (N.A.) and J. J. O'Connell, as Trustees, is incorporated by reference to Exhibit 11 to Form 10-K for the year ended December 31, 1978, Commission File No. 0-692.
4(a)(9)
Registrant's Supplemental Indenture, dated May 6, 1987, is incorporated by reference to Exhibit 3(a) to Form 10-Q for the quarter ended September 30, 1987, Commission File No. 0-692.
4(a)(10)
Supplemental Indenture, dated November 1, 1989, executed by the Company to the Chase Manhattan Bank (N.A.) and Vincent J. Marino, as Trustees, is incorporated by reference to Exhibit 4(a)(10) to Form 10-K for the year ended December 31, 1989, Commission File No. 0-692.
4(a)(11)(i)
Supplemental Indenture, dated July 15, 1991, executed by the Company to the Chase Manhattan Bank (N.A.) and C. J. Heinzelmann, as Trustees, is incorporated by reference to Exhibit 4(a)(11)(i) to Form 8-K, dated August 1, 1991, Commission File No. 0-692.
4(a)(12)
Supplemental Indenture, dated November 15, 1991, is incorporated by reference to Exhibit 4(a)(12) to Form 10-K for the year ended December 31, 1991, Commission File No. 0-692.
4(a)(13)
Supplemental Indenture, dated September 1, 1992, executed by the Company to the Chase Manhattan Bank (N.A.) and C. J. Heinzelmann, as Trustees, is incorporated by reference to Exhibit 4(a)(11)(i) to Form 8-K, dated September 18, 1992, Commission File No. 0-692.
4(a)(14)
Underwriting Agreement dated August 16, 1993 among the Company, Morgan Stanley & Co. Incorporated, Lehman Brothers Inc. and NatWest Capital Markets Limited, is incorporated by reference to Exhibit 1 of Registrant's Report on Form 8-K, dated August 16, 1993, Commission File No. 0-692.
4(a)(15)
General Mortgage Indenture and Deed of Trust dated as of August 1, 1993 from the Company to The Chase Manhattan Bank (National Association), as Trustee, is incorporated by reference to Exhibit 4(a) of Form 8-K, dated August 16, 1993, Commission File No. 0-692.
4(a)(16)
Supplemental Indenture dated as of August 15, 1993 to the General Mortgage Indenture and Deed of Trust dated as of August 1, 1993 executed by the Company to The Chase Manhattan Bank (National Association), as Trustee, is incorporated by reference to Exhibit 4(b) of Form 8-K, dated August 16, 1993, Commission File No. 0-692.
4(a)(17)
Supplemental Indenture dated August 15, 1993 to the Indenture dated August 1, 1940 from the Company to The Chase Manhattan Bank (National Association) and C. J. Heinzelmann, as successor Trustees, is incorporated by reference to Exhibit 4(c) of Form 8-K, dated August 16, 1993, Commission File No. 0-692.
4(b)(1)
Copy of Sale Agreement between Company and Mercer County, North Dakota, dated June 1, 1993, related to issuance of Pollution Control Refunding Revenue Bonds (Northwestern Public Service Company Project) Series 1993, is incorporated by reference to Exhibit 4(b)(1) of Registrant's report on Form 10-Q for the quarter ending June 30, 1993, Commission File No. 0-692.
4(b)(2)
Copy of Loan Agreement between Company and Grant County, South Dakota, dated June 1, 1993, related to issuance of Pollution Control Refunding Revenue Bonds (Northwestern Public Service Company Project) Series 1993A, is incorporated by reference to Exhibit 4(b)(2) of Registrant's report on Form 10-Q for the quarter ending June 30, 1993, Commission File No. 0-692.
4(b)(3)
Copy of Loan Agreement between Company and Grant County, South Dakota, dated June 1, 1993, related to issuance of Pollution Control Refunding Revenue Bonds (Northwestern Public Service Company Project) Series 1993B, is incorporated by reference to Exhibit 4(b)(3) of Registrant's report on Form 10-Q for the quarter ending June 30, 1993, Commission File No. 0-692.
4(b)(4)
Copy of Loan Agreement between Company and City of Salix, Iowa, dated June 1, 1993, related to issuance of Pollution Control Refunding Revenue Bonds (Northwestern Public Service Company Project) Series 1993, is incorporated by reference to Exhibit 4(b)(4) of Registrant's report on Form 10-Q for the quarter ending June 30, 1993, Commission File No. 0-692.
(10) MATERIAL CONTRACTS
10(a)(1)(i)
Copy of Big Stone Plant Agreement, an agreement between Otter Tail Power Company, Montana-Dakota Utilities Co. and Northwestern Public Service Company for sharing ownership of generating plant, dated January 7, 1970, is incorporated by reference to Exhibit 6 to Form 12-K for the year ended December 31, 1971, Commission File No. 2-4472.
10(a)(1)(ii)
Copy of Supplemental Agreement No. 1 to Big Stone Plant Agreement, dated July 1, 1983, is incorporated by reference to Exhibit 10(a)(1)(ii) to Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(a)(1)(iii)
Copy of Supplemental Agreement No. 2 to Big Stone Plant Agreement, dated March 1, 1985, is incorporated by reference to Exhibit 10(a)(1)(iii) to Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(a)(1)(iv)
Copy of Supplemental Agreement No. 3 to Big Stone Plant Agreement, dated March 31, 1986, is incorporated by reference to Exhibit 10(a)(1)(iv) to Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(a)(2)(i)
Copy of Big Stone Plant Coal Agreement between Otter Tail Power Company, Montana-Dakota Utilities Co., and Northwestern Public Service Company and Knife River Coal Mining Company, dated January 1, 1972, is incorporated by reference to Exhibit 5 to Form 10-K for the year ended December 31, 1980.
10(a)(2)(ii)
Copy of Amendment to Big Stone Plant Coal Agreement, dated June 25, 1992, is incorporated by reference to Exhibit 10(a)(2)(ii) to Form 10-K for the year ended December 31, 1992, commission File No. 0-692.
10(a)(3)(i)
Copy of Big Stone Plant Transmission Facilities Agreement between Otter Tail Power Company, Montana-Dakota Utilities Co., and Northwestern Public Service Company, dated April 3, 1972, is incorporated by reference to Exhibit 10(a)(3)(i) to Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(a)(3)(ii)
Copy of Supplement No. 1 to Big Stone Plant Transmission Facilities Agreement, dated October 1, 1974, is incorporated by reference to Exhibit 10(a)(3)(ii) to Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(a)(3)(iii)
Copy of Supplement No. 2 to Big Stone Plant Transmission Facilities Agreement, dated June 10, 1976, is incorporated by reference to Exhibit 10(a)(3)(iii) to Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(a)(3)(iv)
Copy of Supplement No. 3 to Big Stone Plant Transmission Facilities Agreement, dated October 1, 1982, is incorporated by reference to Exhibit 10(a)(3)(iv) to Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(a)(3)(v)
Copy of Supplement No. 4 to Big Stone Plant Transmission Facilities Agreement, dated October 1, 1982, is incorporated by reference to Exhibit 10(a)(3)(v) to Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(a)(3)(vi)
Copy of Supplement No. 5 to Big Stone Plant Transmission Facilities Agreement, dated March 1, 1985, is incorporated by reference to Exhibit 10(a)(3)(vi) to Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(a)(3)(vii)
Copy of Supplement No. 6 to Big Stone Plant Transmission Facilities Agreement, dated March 31, 1986, is incorporated by reference to Exhibit 10(a)(3)(vii) to Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(b)(1)(i)
Copy of Amendment to Ownership Agreement for George Neal Generating Station Unit 4, dated October 30, 1975, to reflect Registrant's ownership interest of 50,000 KW (8.681%), is incorporated by reference to Exhibit 10 to Form 12-K for the year ended December 31, 1975, Commission File No. 2-4472.
10(b)(1)(ii)
Copy of Second Amendment to Ownership Agreement for George Neal Generating Station Unit 4, dated October 30, 1975, is incorporated by reference to Exhibit 10(b)(1)(ii) to Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(b)(1)(iii)
Copy of Third Amendment to Ownership Agreement for George Neal Generating Station Unit 4, dated December 31, 1984, is incorporated by reference to Exhibit 10(b)(1)(iii) to Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(b)(2)(i)
Copy of Coal Sales and Purchase Agreement, between Iowa Public Service Company (as agent for the owners of the George Neal Generating Station Unit 4) and Carter Oil Company, dated September 29, 1977, is incorporated by reference to Exhibit 13 to Form 10-K for the year ended December 31, 1977, Commission File No. 0-692.
10(b)(2)(ii)
Copy of Notice of Election to Extend Coal Contract with Carter Oil Company, dated November 2, 1978, is incorporated by reference to Exhibit 10(b)(2)(ii) to Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(b)(2)(iii)
Copy of revised Exhibit "A", dated May 1, 1986 to Coal Sales and Purchase Agreement, dated September 29, 1977, is incorporated by reference to Exhibit 10(b)(2)(iii) to Form 10-K for the year ended December 31, 1990, Commission File No. 0-692.
10(b)(3)(i)
Copy of Transmission Facilities and Operating Agreement for George Neal Generating Station Unit 4, entered by and between Iowa Public Service Company, Northwestern Public Service Company, & other plant owners, dated October 24, 1984, is incorporated by reference to Exhibit 10(b)(3)(i) to Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(b)(3)(ii)
Copy of First Amendment to Transmission Facilities and Operating Agreement for George Neal Generating Station Unit 4, dated December 31, 1984, is incorporated by reference to Exhibit 10(b)(3)(ii) to Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(c)(1)(i)
Copy of Agreement for Sharing Ownership of Generating Unit No. 1, Coyote Station, by and between Otter Tail Power Company, Minnkota Power Cooperative, Inc., Montana-Dakota Utilities Co., Minnesota Power & Light Company, & Northwestern Public Service Company, dated December 31, 1977, is incorporated by reference to Exhibit 15 to Form 10-K for the year ended December 31, 1978, Commission File No. 0-692.
10(c)(1)(ii)
Copy of Supplemental Agreement No. 1 to Agreement for Sharing Ownership of Generating Unit No. 1, Coyote Station, dated December 31, 1977, is incorporated by reference to Exhibit 16 to Form 10-K for the year ended December 31, 1978, Commission File No. 0-692.
10(c)(1)(iii)
Copy of Amendment No. 2 to Agreement for Sharing Ownership of Generating Unit No. 1, Coyote Station, Amendment No. 1 to Coyote 1 Station Transmission Facilities Agreement, and Amendment No. 2 to Coyote Plant Coal Agreement, dated March 1, 1981, is incorporated by reference to Exhibit 10(c)(1)(iii) to Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(c)(1)(iv)
Copy of Amendment No. 3 to Agreement for Sharing Ownership of Generating Unit No. 1, Coyote Station, Amendment No. 2 to Coyote 1 Station Transmission Facilities Agreement, and Amendment No. 5 to Coyote Plant Coal Agreement, dated September 5, 1985, is incorporated by reference to Exhibit 10(c)(1)(iv) to Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(c)(2)(i)
Copy of Coyote Plant Coal Agreement, by and between Otter Tail Power Company, Minnkota Power Cooperative, Inc., Montana-Dakota Utilities Co., Minnesota Power & Light Company, & Northwestern Public Service Company and Knife River Coal Mining Company, and Addendum to Coyote Plant Coal Agreement, both dated January 1, 1978, are incorporated by reference to Exhibit 17 to Form 10-K for the year ended December 31, 1979, Commission File No. 0-692.
10(c)(2)(ii)
Copy of Addendum to Coyote Plant Coal Agreement, dated March 10, 1980, is incorporated by reference to Exhibit 10(c)(2)(ii) to Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(c)(2)(iii)
Copy of Amendment to Coyote Plant Coal Agreement, dated May 28, 1981, is incorporated by reference to Exhibit 10(c)(2)(iii) to Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(c)(2)(iv)
Copy of Fourth Amendment to Coyote Plant Coal Agreement, dated August 19, 1985, is incorporated by reference to Exhibit 10(c)(2)(iv) to Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(c)(3)(i)
Copy of Coyote 1 Station Transmission Facilities Agreement, by and between Otter Tail Power Company, Minnkota Power Cooperative, Inc., Montana-Dakota Utilities Co., Minnesota Power Company, & Northwestern Public Service Company, dated November 30, 1978, is incorporated by reference to Exhibit 10(c)(3)(i) to Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(c)(3)(ii)
Copy of Amendment No. 2 to Coyote Station Transmission Facilities Agreement, dated January 1, 1983, is incorporated by reference to Exhibit 10(c)(3)(ii) to Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(c)(3)(iii)
Copy of System Interconnection Agreement, by and between Otter Tail Power Company, Montana-Dakota Utilities Co., & Northwestern Public Service Company, dated September 26, 1988, is incorporated by reference to Exhibit 10(c)(3)(iii) to Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(d)
Mid-Continent Area Power Pool Agreement, dated March 31, 1972, as amended through January 1, 1991, is incorporated by reference to Exhibit 10(d) to Form 10-K for the year ended December 31, 1991, Commission File No. 0-692.
10(e)(1)
Interconnection Contract between Registrant and Western Area Power Administration, dated April 1, 1984, is incorporated by reference to Exhibit 4 to Form 10-K for the year ended December 31, 1984, Commission File No. 0-692.
10(e)(2)
Supplement No. 6 to Interconnection Contract between Registrant and Western Area Power Administration, dated February 5, 1987, is incorporated by reference to Exhibit 10(e)(2) to Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(e)(3)
Supplement No. 5 to Interconnection Contract between Registrant and Western Area Power Administration, dated June 1, 1987, is incorporated by reference to Exhibit 10(e)(3) to Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(g)(1)
Supplemental Income Security (Retirement) Plan for Directors, Officers and Managers, as amended July 1, 1986, is incorporated by reference to Exhibit 10(g)(1) to Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(g)(2)
Deferred Compensation Plan for Non-employee Directors adopted November 6, 1985, is incorporated by reference to Exhibit 10(g)(2) to Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(g)(3)
Form of Severance Agreement for Officers is incorporated by reference to Exhibit 5 to Form 10-Q for the quarter ended March 31, 1986, Commission File 0-692.
10(g)(4)
Pension Equalization Plan, dated August 5, 1987, is incorporated by reference to Exhibit 10(g)(4) to Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(g)(5)
Director Retirement Plan dated November 4, 1987, as amended February 2, 1994, is incorporated by reference to Exhibit 10(g)(5) to Form 10-K for the year ended December 31, 1993, Commission File No. 0-692.
10(g)(6)
Annual Performance Incentive Plan for Officers, dated February 1, 1989, as amended February 2, 1994, is incorporated by reference to Exhibit 10(g)(6) to Form 10-K for the year ended December 31, 1993, Commission File No. 0- 692.
10(g)(7)
Long-term Incentive Compensation Plan (Phantom Stock Unit Plan) for Directors and Officers, dated February 1, 1989, as amended February 2, 1994, is incorporated by reference to Exhibit 10(g)(7) to Form 10-K for the year ended December 31, 1993, Commission File No. 0-692.
10(g)(8)
Supplemental Pension Agreement for W. D. Craig, dated May 3, 1989, is incorporated by reference to Exhibit 10(g)(9) to Form 10-K for the year ended December 31, 1989, Commission File No. 0-692.
(13) REPORT FURNISHED TO SECURITY HOLDERS
13(a)
Annual Report for fiscal year ended December 31, 1994, furnished to stockholders of record on March 1, 1995 (exhibit filed herewith).
(21) SUBSIDIARIES OF REGISTRANT
21(a)
Grant, Inc., a South Dakota corporation, is a wholly owned subsidiary of Registrant which does business under the name of Grant, Inc.
21(b)
Northwestern Growth, Inc., a South Dakota corporation, is a wholly owned subsidiary of Registrant which does business under the name of Northwestern Growth, Inc.
21(c)
Northwestern Systems, Inc., a South Dakota corporation, is a wholly owned subsidiary of Registrant which does business under the name of Northwestern Systems, Inc.
21(d)
Northwestern Networks, Inc., a South Dakota corporation, is a wholly owned subsidiary of Registrant which does business under the name of Northwestern Networks, Inc.
(22) OTHER DOCUMENTS OR STATEMENTS TO SECURITY HOLDERS
22(a)
Proxy materials dated March 24, 1995, furnished to common stockholders of record on March 6, 1995 (exhibit filed with SEC on March 27, 1995).
Financial Data Schedule