Montana-Dakota Utilities Co. customers may be getting breaks on their natural gas bills to compensate for a pipeline company's overcharges.

The Federal Energy Regulatory Commission recently ordered Williston Basin Interstate Pipeline Co. to refund $16.9 million for natural gas deliveries, North Dakota state regulators said Tuesday. The sum includes interest. The case was filed five years ago.

Williston Basin supplies most of the natural gas that Montana-Dakota Utilities sells to its North Dakota customers. Both companies are subsidiaries of MDU Resources Group Inc., which is based in Bismarck.

Montana-Dakota spokesman Dan Sharp said the refunds are owed to about 220,000 customers in North Dakota, South Dakota, Montana and Wyoming. MDU has more than 80,000 North Dakota natural gas customers.

The utility will be calculating how much is owed North Dakota customers, and intends to present the state Public Service Commission next month with a plan for refunding the money, Sharp said. He estimated North Dakota ratepayers may be due about $7.5 million.

Montana-Dakota will ask state regulators to approve a plan for giving back the money by putting credits on customers' bills over 1about 12 months, Sharp said. They would appear as a "purchased gas adjustment" on each customer's bill.

The purchased gas adjustment is a regular fixture on utility bills. It is normally used to account for monthly differences in the cost of buying heating fuel.

Public Service Commission members said Tuesday they were awaiting details of the FERC decision, and Montana-Dakota Utilities' suggestions for distributing refunds.

"The main thing … is the issue of, 'How do we allocate the dollars that are available?' Do people get a check? Do they get a credit on their bill? Which customer should get this? Do we try to find the customers who were in place, or do we give it to the people who are here now?" Commissioner Susan Wefald said.

During the 1990s, similar disputes between the FERC and Williston Basin about proper charges for natural gas sales to Montana-Dakota Utilities resulted in large refunds to North Dakota ratepayers.

The utility refunded almost $15 million in 1994, repaid $8.1 million in 1996 and gave back $13.7 million in January and February of 1998.

Montana-Dakota mailed checks to ratepayers in all three cases, although only $7.5 million of the $13.7 million in 1998 refunds were made in cash. The utility made up the remaining $6.2 million by abolishing a natural gas surcharge it had been collecting from customers.

In the current case, Sharp said, Montana-Dakota believes credits on gas bills will be the best method for returning the money.

"To cut a check to each customer would probably not be cost-effective," he said.

Montana-Dakota supplies natural gas to most of North Dakota's larger cities, including Bismarck, Mandan, Minot, Jamestown, Williston, Dickinson and Devils Lake.