HomeMy WebLinkAbout20230109INT to Staff Attachment - Response to No. 47_CapEx Approval Authorization Policy.pdf• MDU Resources Group, Inc.
• MDU Utilities Group APPROVAL AUTHORIZATION POLICY
AD-100.4
Effective Date:
January 1, 2023
Page 1 of 6
I. PURPOSE
A. The Approval Authorization Policy and the accompanying Approval Authorization Manual is the
formal means of designating who has the authority to approve and bind the company for
transactions by MDU Resources Group, Inc. and certain of its subsidiaries.
B. The Approval Authorization Manual indicates minimum electronic or written signature
requirements by Approval Authority Level, and to whom the respective delegations have been
made.
II. SCOPE
A. This policy shall apply to Cascade Natural Gas Corporation, Intermountain Gas Company, Great
Plains Natural Gas Co. and Montana-Dakota utilities Co., all subsidiaries of MDU Energy
Capital, LLC (collectively “MDU Energy Capital” or “MDU Utilities Group”), MDU Resources
Group, Inc. (“MDU Resources”) and Centennial Holdings Capital, LLC (Centennial Holdings) and
its subsidiaries.
III. DEFINITIONS
A. Approval Authorization Manual - means the Approval Authorization Manual with this policy which
designates the authorizations and required approvals for transactions generally applicable to the
companies within the scope of the policy.
B. Approval Authority Level – means for each of the companies within the scope of this policy, the
salary class and its associated level of approval authority.
C. Authorized Individual - means an individual(s) holding a salary class, title or office designated as
the minimum level of authorization or approval required for a transaction as shown on the
Approval Authority Levels.
D. Additional Review Required – notations identify associated salary class(es) and/or job titles
involved in specific transactions. The additional review may be an approval requirement or may
only be for informational or record-keeping purposes. Before the transaction is affected, the
signatures of the additional parties must be obtained.
IV. APPROVAL AUTHORITY levels:
Title Level
Controller - Utility Group; VP, Regulatory Affairs & Customer Service;
Director, Tax & Compliance (MDUR); Director Internal Auditing (MDUR);
Treasurer (MDUR)
E
VP, Electric Supply; VP, Engineering & Operations Services; VP, Field
Operations; VP, Safety Process Improvement & Operations System
F
EVP, Business Development & Gas Supply; EVP, Regulatory Affairs,
Customer Services, Administration;
G
VP, Chief Information Officer (MDUR); VP, Human Resources (MDUR);
VP, CAO & Controller (MDUR)
H
N/A I
President & CEO - MDU Utilities Group; VP & CFO (MDUR); VP, General
Counsel & Secretary (MDUR)
J
President & CEO – MDU Resources K
V. LIMITS OF THE AUTHORIZATION
A. The policy does not empower any individual or delegate to authorize a transaction that is
prohibited or restricted by other procedures, practices or policies of the company. In no case
shall the provisions of the policy be considered as taking precedence over administrative or
departmental instruction or practice which may require approval of a particular transaction at a
higher level or under more specific instructions.
• MDU Resources Group, Inc.
• MDU Utilities Group APPROVAL AUTHORIZATION POLICY
AD-100.4
Effective Date:
January 1, 2023
Page 2 of 6
B. It should be understood by the authorized approvers that this authority carries responsibility and
that each is accountable for their approvals. When a transaction involves a related party see
Corp Policy 85.
VI. PROCEDURE
A. The accompanying Approval Authorization Manual is broken into three sections: Commitment
and Disbursements of Company Funds, Capital Expenditure Authorizations, and Contracts,
Written Execution. Each section applies to a specified transaction type.
B. The Authorized Individuals holding the salary class listed in the Approval Authority Level are
authorized to approve transactions for their department up to the dollar amount indicated in the
Approval Authorization Manual.
C. Authorized Individuals should recognize the applicable notes within the Approval Authorization
Manual and obtain such additional review if required. If there are additional policies that apply to
the transaction being approved, these must be followed as well as the Approval Authorization
Manual.
VII. ADMINISTRATION
A. The Controller of the MDU Utilities Group companies has the responsibility for the overall
administration of this Policy. The General Accounting Manager of each company will maintain a
file of the current “in-effect” Authorized Individuals for Authority Approval Level as applicable to
their associated company(ies). Establishment of administrative procedures for compliance with
the policy is the responsibility of the officers and managers of MDU Utilities Group and MDU
Resources Group, Inc.
Reviewed: Approved:
Controller President and CEO
MDU Energy Capital, LLC MDU Energy Capital, LLC
Date: Date:
Approved: Approved:
Vice President & CFO President and CEO
MDU Resources Group, Inc. MDU Resources Group, Inc.
Date: Date:
12-16-22 12-20-22
12-20-22
12-20-22
• MDU Resources Group, Inc.
• MDU Utilities Group APPROVAL AUTHORIZATION POLICY
AD-100.4
Effective Date:
January 1, 2023
Page 3 of 6
COMMITMENT AND DISBURSEMENT OF COMPANY FUNDS
The “Expense or Capital Items” levels of authority are to be followed unless specifically stated as an
exception below. Expense reports and credit card charges always require immediate supervisor’s
approval. Reference MDUR Corporate Policy 51.
Expense or Capital Items, including Purchase Order Approvals (except
as noted below)
Minimum Approval Salary
Class Required
• Up to and including $10,000.00 36 - 37
(Supervisors, Managers, & Supervisory
Roles only)
• Up to and including $50,000.00 38 - 40
• Up to and including $100,000.00 41 - 42
• Up to and including $500,000.00 E - I
• Up to and including $500,000.01 and greater J - K
Exceptions to Expense or Capital Items: Minimum Approval Salary
Class Required
Coal Supply Purchases (Under previously approved contracts) 36 - 37
(Supervisors, Managers, & Supervisory
Roles only)
Electric Power Purchases (Under previously approved contracts) 36 - 37
(Supervisors, Managers, & Supervisory
Roles only)
Gas Derivative Margin Calls (Under previously approved contracts) 36 - 37
(Supervisors, Managers, & Supervisory
Roles only)
Gas Supply Purchases (Under previously approved contracts) 36 - 37
(Contract Administrator, Supervisors,
Managers, & Supervisory Roles only)
Carbon Compliance Purchases (Under previously approved plan) 42 – Director, Gas Supply
Contributions & Donations to Civic and Charitable Organizations If over $1,000, funds should be
requested from the MDUR
Foundation
Intercompany Payments, Recurring Payments (Required Review by Accounting
Manager) 36 - 37
(Supervisors, Managers, & Supervisory
Roles only)
Interest Payments on Loan Agreements MDUR Treasury Dept
Land Account Disbursements (Required review by Director, Electric Transmission
Engineering monthly) 36 - Land Agent
• Additional Funding to MDU Land Account (Required review by Director,
Electric Transmission Engineering)
42 - Director, Electric Transmission
Engineering
MDU Resources President & CEO Department Costs, up to $10,000 Asst to Chair, President & CEO
Moving Expenses (Refer to MDUR Corporate Policy 122-Relocation)
Office Furniture & Equipment (Consult with the Facilities and Administrative Services
Manager)
Use Expense and Capital Approval
Levels noted above
Payroll, Benefits, and Payroll Tax Related Payments MDUR Payroll Shared Services
Tax Payments greater than minimum approval level of authority
(Federal/State Income Tax, Federal/State Property Tax, Other City/State Imposed Taxes)
For the CNG/IGC city/state taxes
For the taxes handled by the tax department
UG Controller and MDUR Tax Director
MDUR Tax Director and CAO
• MDU Resources Group, Inc.
• MDU Utilities Group APPROVAL AUTHORIZATION POLICY
AD-100.4
Effective Date:
January 1, 2023
Page 4 of 6
Telecommunications bills Network Voice Administrator
IT Gov & Compliance Analyst
Tools, Attachments or Accessories Associated with Auto & Work
Equipment (Refer to Utility Group Policy AD101)
Required Review by Fleet
Department if over $1,000
Maintenance and Repair of Company Vehicles, Work Equipment, and
Trailers (Refer to Utility Group Policy OPS25)
Required Review by Fleet
Department if over $500
Tuition Reimbursement (Refer to MDUR Corporate Policy 140) Required Review by Human
Resources Personnel
PNC, Voyager, Visa Payments MDUR Accounts Payable Shared
Services Manager
CAPITAL EXPENDITURE AUTHORIZATIONS
Prior to incurring any capital expenditures, a capital work order must be created and approved in the Power
Plan system. Prior to approval, all construction authorizations requiring regulatory certification must be
reviewed by Regulatory Affairs.
Minimum approval level requirements are based on total construction/purchase/preliminary survey and
investigation (PS&I) expenditures including any retirement removal cost, salvage credit amounts, capital
overhead (ES/GA), and non-refundable contributions in aid of construction (CIAC) but exclude Allowance
for Funds Used During Construction (AFUDC) and refundable customer advances for construction (CAC).
An Executive Summary will be required to be attached to the Power Plan work order for each work order
authorizing expenditures of $150,000 or more.
Refer to the Accounting for Capital Expenditures and Fixed Assets Policy (AD114) to determine if
expenditures qualify as a capital investment.
A variance explanation of the amount actual expenditures exceeds the original authorized amount must be
provided in the “User Comment” tab of a work order if:
1. The work order is authorized for less than one million dollars and the actual expenditures exceed the
original authorization by $100,000 or more
2. The work order is authorized for one million or more and the actual expenditures exceed 10% of the
original authorized amount.
Authorizations are not required for non-capital expense or billable work orders. The invoices associated with
these projects will be approved as required under the Commitment and Disbursement of Company Funds
section of this policy.
Budget Capital Expenditures Minimum Approval Salary
Class Required
• Up to and including $50,000.00 38 - 40
• Up to and including $200,000.00 41 - 42
• Up to and including $500,000.00 E - I
• Up to and including $500,000.01 and greater J
Non-Budget Capital Expenditures
(Specific Funding Project Required)
Minimum Approval Salary
Class Required
• Up to and including $50,000.00 41 - 42
• Up to and including $200,000.00 E - I
• Up to and including $500,000.00 J
• Up to and including $500,000.01 and greater K
• MDU Resources Group, Inc.
• MDU Utilities Group APPROVAL AUTHORIZATION POLICY
AD-100.4
Effective Date:
January 1, 2023
Page 5 of 6
CONTRACTS, WRITTEN EXECUTION
Prior to execution, the following contracts shall be reviewed by the Legal Department of MDU
Resources Group:
1. Contracts for which the length of term of the contract is, or could be, greater than one year.
2. Contracts for which an amount to be paid or received by a Company, or the value of an
obligation to be performed by or for a Company, is $100,000 or greater.
3. Contracts or contract provisions of which the individual reviewing or approving the contract has
questions, uncertainties, concerns or which create unusual obligations on the Company.
Third Party Contracts (work performed for others and includes engineering services; project management services and
construction service performed for others and primarily includes non-regulated activities) Prior to approval, all proposals
requiring regulatory certification must be reviewed by Regulatory Affairs. Approval levels are based on
anticipated gross revenue. Minimum approval level requirements are based on total contract value.
Accordingly, multi-year contracts approval requirements will be based on sum of each year’s proposed work
to determine total contract value.
Contracts, Written Execution (except as noted below) Minimum Approval Salary
Class Required
• Up to and including $10,000.00 36 - 37
(Supervisors, Managers, &
Supervisory Roles only)
• Up to and including $50,000.00 38 - 40
• Up to and including $100,000.00 41 - 42
• Up to and including $500,000.00 E - I
• Up to and including $500,000.01 and greater J - K
Exceptions to Contracts, Written Execution: Minimum Approval Salary
Class Required
Coal Supply Contracts (Required Review by VP, Electric Supply) E - I
Electric Power Contracts (Required Review by VP, Electric Supply) E - I
Gas Supply Contracts (Required Review by EVP, Bus Dev & Gas Supply) E - I
Carbon Compliance Plan (Required Review by EVP, Bus Dev & Gas Supply) E - I
Gas Transportation Contracts (Contracts for Pipeline transportation service for
purchased natural gas) E - I
• Additions to and revision of contract exhibits related to system delivery 41-42
Agency Agreements
• Natural gas procurement services for natural gas transport customers E - I
• Utility bill payment collection services E - I
• Service Line Extension Contracts (Main Line Extension Contracts should follow
the regular approval section above) Energy Services Rep.
Derivative Transactions (Refer to MDUR Corporate Derivative Policy 21)
Authorized by MDUR Corporate Hedging Policy E - I
• Exceptions to MDUR Corporate Hedging Policy J - K
• Land Account Agreements (including easements, damages, fees, Purchase
Agreements) 36 - Land Agent
Real Estate Purchase/Disposal (Purchase/Sales warranty deed) J - K
Research and Development Costs K
Surety Bond, Performance Bonds
• Up to and including $100,000.00
• $100,000.01 and greater
E - I
J - K
• MDU Resources Group, Inc.
• MDU Utilities Group APPROVAL AUTHORIZATION POLICY
AD-100.4
Effective Date:
January 1, 2023
Page 6 of 6
Contracts, Written Execution Without a Defined Financial Obligation: Minimum Approval Salary
Class Required
Confidentiality Agreements (to be logged/registered in Business Development) E - J
Electric Territorial Service Agreements (Required Review – VP Electric Supply and
VP Field Operations) J - K
Franchise Agreements E - I
Interconnect Agreements E - I
Reviewed: Approved:
Controller President and CEO
MDU Energy Capital, LLC MDU Energy Capital, LLC
Date: Date:
Approved: Approved:
Vice President & CFO President and CEO
MDU Resources Group, Inc. MDU Resources Group, Inc.
Date: Date:
12-16-22 12-20-22
12-20-22
12-20-22