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State approves new Minnesota Power charge

Minnesota Power's plan to subsidize lower rates for industrial customers with a new charge for smaller customers took a step forward this week. The Minnesota Public Utilities Commission on Thursday approved a request to impose a per-kilowatt-hour...

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Minnesota Power transmission lines. (2009 file / News Tribune)
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Minnesota Power's plan to subsidize lower rates for industrial customers with a new charge for smaller customers took a step forward this week.

The Minnesota Public Utilities Commission on Thursday approved a request to impose a per-kilowatt-hour-charge on residential and commercial customers, which could increase bills up to 6.5 percent for average homes and 4.5 to 8 percent for businesses.

That will help offset a 5 percent decrease in rates for the utility's largest industrial customers such as taconite mines. Nearly half of Minnesota Power's electricity revenue comes from mining and papermaking.

The bill increase will not take effect immediately, as company spokeswoman Amy Rutledge said on Friday: "We are still carefully reviewing the commission's decision yesterday. We want to see what that order is, and that's going to help us as to how to implement this."

The charge, which could come into effect in a few months, will vary based on energy usage, and it will not be imposed on low-income residential customers. Rutledge said Minnesota Power is reaching out to ensure all those who qualify will be exempt from the bill increase.

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The move follows a 2015 state law that allows the utility to lower rates for businesses classified as "energy-intensive and trade-exposed," often shortened to EITE.

"It was designed for about 20 of our customers, and there are 11 we identified that will have the most immediate impact," said Pat Mullen, vice president of marketing.

Late in 2016, the state utilities commission approved Minnesota Power's plan to reduce the rate for its big industrial customers.

"This decision that came out yesterday is that final piece that says how do we account for that money," Mullen said. "This decision was made in September, and I think companies are factoring this in to help make them more competitive."

Minnesota Power recently reduced a rate increase request through the Minnesota Public Utilities Commission that is separate from this new charge, citing improving revenue from mines. That proposed increase, which could be finalized early in 2018, would see rates go up an average of 15 percent for residential customers. An interim rate increase of 5.6 percent that went into effect in January was lowered to 5.1 percent in the request.

Related Topics: MINNESOTA POWER
Brooks Johnson was an enterprise/investigative reporter and business columnist at the Duluth News Tribune from 2016 to 2019.
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