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Finance

2010 Financial Information

Dakota Gasification Company operating highlights

• Dakota Gas earned net income of $18.6 million during 2010
• Dakota Gas returned a $20 million in dividends to its parent company, Basin Electric, in 2010

DOE Revenue Sharing

On September 20, 2010, Dakota Gas paid its final payment of more than $2.1 million in revenue sharing to the U.S. Department of Energy (DOE) for 2009, which was the last year of revenue sharing with the DOE as part of an asset purchase agreement signed in 1988. The total amount of revenue sharing paid to the DOE is $391 million since the sale of the plant to Basin Electric. The U.S. government has now recovered more than $1.2 billion of its original investment through revenue sharing, foregone production tax credits of $754 million and the initial $85 million purchase price of the Synfuels Plant by Basin Electric.

Pollution control costs

Dakota Gasification Company pollution control capital costs to-date and operating expenses for 2010:

• Operation, maintenance and depreciation: $41.7 million.
• Pollution control capital costs: $130.1 million.

Strategies for the future

Dakota Gas' cost of production is tied to the fluctuations in the price of natural gas. Expanding coproduct revenue from zero in the early years to almost 40 percent of current revenue stream has helped that imbalance. After formally researching many other options, Dakota Gas concluded that it would continue to focus on cost management and revenue enhancement from existing plant capacity.  Long-term projects include securing additional profit on carbon dioxide; increasing ammonia plant use by installing a urea plant; selling boiler fuel at a higher value than gas; expanding the product markets; achieving an on-stream factor of 93 percent; and adding a clean cooling water system.