MDU Resources Group, Inc. has announced that its subsidiary, Montana-Dakota Utilities Co. (MDU), has signed a purchase agreement to acquire a 49% ownership interest in the Badger Wind Farm, representing 122.5 MW of the project's total 250 MW generation capacity. The estimated cost for MDU to purchase this stake is $294 million.
MDU had previously executed a power purchase agreement (PPA) for 150 MW of the Badger Wind Farm's output last November, which included the 49% purchase option MDU has now exercised under the purchase agreement. With this ownership purchase, the capacity under the PPA will be reduced to 27.5 MW upon closing.
The addition of the Badger Wind Farm will impact MDU’s nameplate generation mix as follows: Renewables: 29% → 39% Coal: 31% → 26% * Gas: 40% → 35%
MDU's 2024 integrated resource plan identified the need for additional generation capacity to meet future energy demands, and the investment in the Badger Wind Farm was selected as the least-cost option for MDU’s customers.
Nicole Kivisto, President and CEO of MDU Resources, stated that "this investment enhances our diversified portfolio of assets, allowing MDU to meet customer demand with a mix of generation assets that includes coal as well as wind backed by natural gas peakers to effectively serve our customers' needs."
To ensure the prudence of this investment, MDU has filed an advance determination of prudence (ADP) with the North Dakota Public Service Commission (NDPSC). An ADP request asks the NDPSC to determine whether a generation project is reasonable and prudent for providing electric service to the public.
MDU Resources Group, Inc. provides essential products and services through its regulated electric and natural gas distribution and pipeline segments, serving more than 1.2 million customers across eight states. The market has reacted to these announcements by moving the company's shares -0.7% to a price of $16.77. For the full picture, make sure to review MDU Resources's 8-K report.
