Residential customers in northern Wyoming may soon see a 15% increase in their natural gas bills if a proposed rate adjustment by Montana-Dakota Utilities (MDU) is approved, Cowboy State Daily reports.
The utility, which serves approximately 20,000 customers across nine Wyoming communities, has submitted a settlement agreement that would raise rates beginning August 1, pending approval from the Wyoming Public Service Commission.
The settlement—reached between MDU and the Wyoming Office of Consumer Advocate—represents a compromise from the utility’s original request for an 18% increase. If approved, the new rate structure would generate approximately $2.12 million in additional annual revenue for the utility, down from the initial $2.6 million proposal.
Residential customers would experience an average monthly increase of $8.12, reduced from the initially proposed $9.80. In contrast, large commercial users would see only a 3.87% increase, while small commercial customers would face a 10.55% rise. The overall rate increase across all customer groups would be approximately 11.68%.
Montana-Dakota Utilities said the rate changes are necessary to recover investments in infrastructure upgrades since the last general rate increase in 2019. These improvements include pipeline replacements and a key system enhancement in Sheridan that enables more efficient transfer and regulation of natural gas from supply lines into local distribution systems.
“The biggest part of this is investment in infrastructure,” said Mark Hanson, senior public relations representative with MDU. “Since that time, the company invested about $15 million in the system.”
The proposed adjustments reflect a cost-of-service approach, which allocates expenses based on actual usage and system impact by customer type. This ensures, according to MDU, that one customer group does not subsidize another.
Anthony Ornelas with the Wyoming Office of Consumer Advocate emphasized that the settlement aligns with regulatory goals.
“It represents the first general rate increase since 2019 and offers a just and reasonable outcome,” he said.
More than half of customer bills are tied directly to the cost of natural gas itself—a pass-through cost with no profit margin for the utility. Montana-Dakota sources gas from multiple regional basins, including the Rockies, the Bakken in Montana and North Dakota, and parts of Canada. To manage costs, the utility uses a combination of long- and short-term contracts and storage strategies that allow gas to be stored when prices are lower and used during high-demand winter months.
The Wyoming Public Service Commission will hold a public hearing on the settlement on June 24. If approved, the new rates would go into effect on August 1. MDU serves communities including Sheridan, Powell, Buffalo, Lovell, and Kaycee.
