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City tells MDU, McKenzie Electric to work together

Posted 3/13/13 (Wed)

By Neal A. Shipman
Farmer Editor

Montana-Dakota Utilities (MDU) and McKenzie Electric Cooperative (MEC), the two providers of electrical service to Watford City and its surrounding area, have been given their marching orders by the city of Watford City.
The message from the city is clear.
Either the two utilities work together and provide the city with a service area map that delineates which utility is going to provide electrical service to areas that are being annexed into the city limits or they will risk losing their franchises with the city.
With Watford City experiencing unprecedented growth of new residential areas and developers requesting annexation of new development areas into the city, the Watford City Franchise Committee met with both utilities on March 6 to spell out exactly what the city council is expecting from the two utilities.
But putting together that map and a service agreement between the two utilities is not as simple as it sounds.
“We want a clearly defined service agreement,” stated Dan Kuntz, an attorney with MDU. “It is the way to go. But MEC won’t do it and we disagree with the cooperative’s opinion of what their limited franchise with the city is.”
And it is that difference of opinion as to who can provide power into the city’s newly-annexed areas, according to Dennis Johnson, MEC’s attorney, that is creating the issue.
“McKenzie Electric has served the area outside of Watford City since 1949,” stated Johnson. “We will work with the city and MDU to show where the cooperative has been serving its customers. Until this unprecedented growth, this area has been served by MEC.”
According to Wyatt Voll, Watford City city attorney, MDU has an unlimited agreement with the city, while MEC has a limited franchise agreement.
And according to Voll, it is the difference in those two franchise agreements that requires the two utilities to work together to decide who is going to provide power into the newly-annexed areas.
According to Voll, MDU’s unlimited franchise provides that the company with the right to provide service in all of Watford City as well as within areas that are annexed into the city limits. Further, Voll noted that MEC’s limited franchise allows that the cooperative can continue to provide electricity to its existing customers in the city limits.
But with Watford City’s city limits rapidly expanding into areas that are being served by MEC, both companies want to be able to serve the new growth areas.
And without a service agreement between the two companies, developers don’t know who is going to provide the new residential and commercial areas with electrical service.
“We don’t want to be the judge and the jury in this matter,” stated Doug Bolken, Franchise Committee chairman. “We want MDU and MEC to help us define these service agreements.”
MDU feels strongly that the two companies need to come together to develop this service agreement. And according to Kuntz, MDU has been able to reach this type of agreement with other electric cooperatives in western North Dakota.
“We’ve made repeated requests to develop a service agreement with MEC,” stated Kuntz. “But they won’t do it.”
According to Rick Engstrom with MEC, the cooperative is hesitant to put a fine line on the map that neither MDU or MEC can cross when it comes to providing service.
“We want some common sense applied,” stated Johnson. “We don’t want to waste the resources of either MDU or MEC.”
But it is that hesitancy by MEC, according to Kuntz, that is the problem.
“We can’t keep doing it that way,” stated Kuntz. “Just because you are serving a water well in a section, you can’t let that tie up the developments of a subdivision.”
And that is exactly the problem that Robin Greenhagen, a developer who is planning on constructing 100 new homes north of Watford City this spring, has encountered.
Greenhagen has requested that his subdivision be annexed into the city limits. And now with construction ready to start, he wants to know who is going to provide his development with electrical service.
And he can’t wait months to find out.
“I have signed contracts with builders,” stated Greenhagen. “They need power in April. And I don’t know who to go to. But I do know that without power, these developers will walk away.”
According to Johnson, MEC has power in the area. And according to Kuntz, once it is annexed into the city limits, it’s part of MDU’s franchise.
And that dilemma, according to Bolken, cannot continue to go forward.
“We know that MEC has provided electrical service outside of Watford City,” stated Bolken. “But, the cooperative seems to have a stranglehold on the city when we bring land into the city limits. We want to make sure that city residents have adequate power and that the service is maintained.”
While Greenhagen’s new development may be the first that will be needing power this spring, it isn’t going to be the only one that is going to be facing similar questions over who is going to be their power provider.
“We (the city) have five other developers who will be needing power this spring,” stated Curt Moen, city planner. “We need a line on a map. How you get there is up to you guys. But we need this service agreement done quickly.”
According to Moen, if MDU and MEC cannot come up with a service agreement for the city, then the city will consider letting the two franchise agreements expire and then renegotiate them. MEC’s limited franchise with the city will expire in November of 2013, while MDU’s unlimited franchise will expire in July of 2014.
 “Obviously, there are big challenges,” stated Bolken.” We need something done in the next 30 days. The building season is here.”