Minnesota Power's wholesale customers are bracing for higher prices in 2008. The Duluth-based utility company has filed a request with the Federal Energy Regulatory Commission as it prepares to raise rates for the first time since 1995.
If the request is approved, Superior Water, Light & Power Co. will pay 12.5 percent more for the electricity it receives from Minnesota Power in 2008 than it did this past year.
Other municipalities supplied by Minnesota Power would see rate increases of about 10 percent. These communities include Aitkin, Biwabik, Brainerd, Buhl, Ely, Gilbert, Grand Rapids, Keewatin, Mountain Iron, Nashwauk, Pierz, Proctor, Randall, Two Harbors, Hibbing and Virginia.
Minnesota Power expects interim rate increases to go into effect by March, although final FERC approval may not be forthcoming until late 2008 or early 2009.
The rate increases are expected to generate about $7.5 million in additional revenue annually.
ADVERTISEMENT
"This rate adjustment would acknowledge our increased costs of providing service to wholesale customers, including general operation and maintenance expenses, while integrating environmental compliance, renewable generation and transmission asset additions," said Don Shippar, chairman, president and CEO of Allete Corp., Minnesota Power's parent company, in a release issued Monday.
Minnesota Power's direct retail customers will not be affected by the proposed rate increase, but the utility plans to make additional rate changes in 2008, reflecting the cost of efforts to make the system more efficient, environmentally friendly and reliable, said Eric Olson, a company spokesman. The scope of those increases for retail customers has yet to be determined.
