Server: Microsoft-IIS/3.0 Date: Thu, 18 Dec 1997 21:28:45 GMT Content-Type: text/html Accept-Ranges: bytes Last-Modified: Tue, 17 Jun 1997 21:04:26 GMT Set-Cookie: EGSOFT_ID=128.2.209.145-3955271248.29166587; expires=Fri, 31-Dec-2010 00:00:00 GMT; path=/ Content-Length: 7943 Montana Dakota Utilities Co. - President's Message
IMAGE Montana-Dakota Utilities Co.

President's Message

Welcome to the Montana-Dakota Utilities Co. Home Page!

IMAGE "We have turned the corner. With the customer as our focus, our skilled work force is directed toward a future defined by new technology, innovative market development and competitive positioning."


Ronald D. Tipton
President and Chief Executive Officer
Montana-Dakota Utilities Co.



Positive Earnings Trend (chart)

Positive Earnings

    Utility earnings have increased 36 percent since 1994. Fueled by a vibrant regional economy, increased sales of both electricity and natural gas provided revenue growth as this business unit continues to improve its competitive position by achieving significant efficiency gains through the utilization of new technology.

Healthy Economy

    Business development activities throughout the four states served by Montana-Dakota have produced a healthy economic climate. In 1996, a substantial number of new service and agricultural processing businesses have relocated or developed operations in this area to take advantage of the high quality of life, skilled work force and the positive business environment. Montana-Dakota's low energy rates and rate stability have played a major part in helping attract these new businesses. During the past ten years, electric rates have decreased by nearly 2 percent and retail natural gas prices have declined over 25 percent.

Strategic Growth

    Looking ahead, Montana-Dakota has developed growth strategies focused not only on existing customers but potential consumers of both energy products and services. For example, in 1996 Montana-Dakota nearly doubled the number of Preferred Service contracts increasing its market share for this service from 4 percent to 8 percent. This program gives residential natural gas customers a regular schedule of preventive maintenance on selected household appliances while reducing the demand for expensive off-hour emergency calls. Beyond providing a new revenue source for the company, the program is working to reduce company overtime and strengthen company-customer relationships. This program has phenomenal growth potential with 92 percent of the market untapped.

Competitive Advantage

    Operational improvement continues as a key activity at Montana-Dakota. In 1996, the utility's marketing department was completely reorganized to place more emphasis on the customer. At the same time, the company's general headquarters continues an in-depth review of department functions seeking to find more efficient methods of work flow. Through this process, the utility maintains a singular focus on superior customer service. Utility management believes that continued success requires value-added services as well as the delivery of safe and reliable energy at competitive prices.

Electric Re-regulation

    Throughout the nation, attention is focused on electric industry re-regulation. The Federal Energy Regulatory Commission issued new rules on wholesale electric transmission transactions early in 1996. In addition, most state regulatory agencies within the region are currently developing positions regarding industry restructuring. In spite of this activity, Montana-Dakota does not view restructuring to be as much of an operational threat as would a high-cost utility. Nevertheless, market conditions are expected to change and Montana-Dakota will continue to refine operations to secure its competitive position through this evolutionary process.

Beyond Boundaries

    As an established electric and natural gas utility, Montana-Dakota has a solid core of trained professionals accustomed to providing energy services in all weather conditions. With this base, the company continues to explore development options beyond existing boundaries. Consistent with the development philosophy of the company's other business units, new opportunities must be related to existing expertise.

Positive Earnings Trend (Dollars in Millions)

    Pie Chart

Earnings are rebounding and have increased 36 percent since 1994 demonstrating increasing operating efficiency, competitive prices and growing consumer demand.

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