Minnesota Power proposes lower temporary rate hike of 7% for residential customers
It is still seeking a nearly 18% rate increase across all customers.
Minnesota Power has asked regulators to lower its temporary rate hike by half for residential customers as it continues to seek its full rate hike of nearly 18%.
In a letter to the Minnesota Public Utilities Commission on Wednesday morning, the Duluth-based utility and two consumer advocacy groups urged the commission to adopt an interim rate increase of 7.11% to take effect Jan. 1 for its residential customers. That would lead to about a $5.89 increase in monthly bills for the average residential customer.
If adopted, the original interim rate — requested in a filing made last week — of 14.23% would still apply to Minnesota Power's business and industrial customers.
The interim rate is meant to be temporary while the PUC considers the company's full rate increase request of 17.58% across all customers. If that full increase is approved, the average residential customer would see bills increase by about $15.08 per month.
The full increase would generate $108.3 million for the company, which said it plans to use the funds for investments in greener energy production and improved transmission. The company also needs to offset the loss of industrial customers like Verso's Duluth paper mill, the idling of a machine at the UPM Blandin paper mill in Grand Rapids in 2017 and "load loss due to energy efficiencies also reduced revenue," the company said in documents filed last week.
Minnesota Power said it is still seeking that full rate hike, which could take regulators 12-18 months to approve. Regulators may also approve a smaller amount.
"This does not change our overall rate request and the need for recovery of our investments as we advance our Energy Forward clean-energy transition while providing safe and reliable power, which will be evaluated by state regulators over the next 12-18 months," Minnesota Power spokesperson Amy Rutledge said in an email to the News Tribune on Wednesday. "However, it does recognize that it is important to design creative solutions that recognize that the pandemic has impacted many families in this area and one we hope the Commission will approve when interim rates are set early next month."
In a joint letter Wednesday morning, the company, Energy Cents Coalition and Citizens Utility Board of Minnesota said the decision would help customers trying to catch up from hardships caused by the pandemic.
"Following the COVID-19 pandemic and the ending of pandemic protection designed to ensure continued service for residential customers, customers continue to work to reduce their past due balances accrued during the moratorium on disconnections," the company and groups said in a joint letter to the PUC on Wednesday.
In the letter, the company said it supports the smaller rate increase if the PUC allows them to "establish a tracker for future recovery of the difference between proposed and approved interim residential rates."
The PUC is expected to consider the interim rate hike in December.