Public input sought on Minnesota Power's proposed 18% rate increase
If approved, typical residential consumers would see an electrical rate increase of $180 a year; and $660 more a year for small businesses.
DULUTH — Members of the public have an opportunity to voice their comments regarding Minnesota Power's proposed 17.58% overall electricity rate increase during virtual and in-person hearings.
Minnesota Power, a utility division of Allete Inc., initially filed a request to increase its annual operating revenue by $108 million with the Minnesota Public Utility Commission on Nov. 1, 2021. According to a November news release, the increase reflects changes in revenue and expenses related to Minnesota Power’s ongoing EnergyForward clean energy transition, evolving customer demand, business operations and regulatory requirements.
As a regulated utility, it must receive approval from the PUC whenever changes in revenue or expenses require adjusting its rates. The PUC has authority to grant or deny the request, in whole or in part, and may grant less or more than requested for any class or classes of service.
If granted, a typical residential customer with a monthly usage of 701 kilowatt-hours may see an increase of $15.08 a month. A small-business customer with a monthly usage of 2,581 kilowatt-hours may see an increase of $55.09 per month. Minnesota Power's last completed rate review was filed in 2016. Its 2019 request was later withdrawn in response to the economic impacts of the COVID-19 pandemic on Minnesota Power customers and throughout the region
Allete Chair, President and CEO Bethany Owen said in the release, "The energy industry of the 2020s looks far different than it did five years ago as our customers’ expectations for clean energy and high-value service are increasing. We are proud to be halfway to our goal of providing 100% carbon-free energy by 2050, and we look forward to continuing our close work with our customers and stakeholders to complete this transition.”
In 2020, Minnesota Power became the first utility in the state to deliver more than 50% of its energy supply from renewable sources and closing or transitioning seven of its nine coal units.
In January, Minnesota Power implemented a partial interim rate increase of 7.1%, which is allowed by the state while the full increase is being considered by the PUC. The interim increase raised the average residential bill by an average of $5.89 per month, according to the PUC. Small businesses and other classes of service experienced an interim rate increase of 14.2%. If the interim rates end up being higher than the final rate approved by the PUC, Minnesota Power customers will receive refunds for overpaid amount.
Minnesota Power redesigned its customer affordability program, CARE, to provide bill discounts to income-eligible customers. According to the release, if Minnesota Power's rate request is approved, usage-qualified low-income customers will continue to have some of the lowest average bills in the state due to special discounts included in the company’s rate design transition.
According to a July 8 news release from Minnesota Interfaith Power & Light, an organization working in partnership with faith and spiritual communities to address climate concerns, 12% of households served by Minnesota Power are already behind on their electricity bills.
Duluth resident Bret Pence, who serves as the Greater Minnesota director of Minnesota Interfaith Power & Light, issued the following statement: “This was an unreasonable rate increase even before inflation was a major issue in our lives. Minnesota Power is already directly passing along the higher costs of fossil fuel generation to its residential ratepayers on their monthly electric bills. Now they want to be compensated for millions in imprudent spending, and receive a higher profit margin (called a return on equity) from ratepayers. That is both unreasonable and unjust.”
Public input options
A virtual public comment session was scheduled for Tuesday, July 19, at 6 p.m. On Wednesday, in-person meetings will be held at 2 p.m. and 6 p.m. at the AAD Shrine Meeting and Event Center in Hermantown with an option to attend virtually. Full details including links and login information for the virtual hearings can be found on Minnesota Power's website: minnesotapower.blob.core.windows.net/content/Content/Documents/CustomerService/StatementInserts/06-2022-01.pdf.
Written comments may also be filed through Aug. 1 with the PUC by emailing firstname.lastname@example.org or by mail to MN Public Utilities Commission, 121 Seventh Place East, Suite 326, St. Paul MN 55101.
This story originally contained an incorrect date for when the previous rate increase was withdrawn. It was updated at 8:35 a.m. July 20. The News Tribune regrets the error.