This is a bit tough to take for all of us who grew up getting scolded for leaving a room without turning off the lights. Our lifetimes and generations of “saving electricity” in the Northland, saving us money on our monthly power bills, apparently also contributed to revenue declines at Minnesota Power. And it’s part of the reason now that the utility is seeking to raise our rates.
In other words, we’re looking at paying more anyway — in spite of all our light switch-flipping efforts and reminders from Dad.
Responsibly frugal electrical use isn’t the primary reason Minnesota Power is seeking to charge its residential customers nearly 18% more. The bigger reason is the high and ongoing cost of our region’s and nation’s transition to cleaner energy, where Minnesota Power and its parent company Allete have been leaders and have been investing accordingly. But our efforts to use less power over the years, utility officials acknowledged last week in an exclusive interview with the News Tribune Opinion page, is a contributor to electric bills that soon could climb by $15.08 every month.
“We don’t want anyone to ever think it’s not a good thing to conserve energy,” Frank Frederickson, vice president of customer experience for Minnesota Power, said in the interview. “It’s like all of our natural resources. It’s precious, and we want to continue to conserve. But … it’s like if there are fewer cars on the highway: The state still needs to maintain the interstate.”
So it needs to find other ways to collect about the same amount of money for the upkeep. For Minnesota Power, that means a third rate-change proposal in 25 years.
The Minnesota Public Utilities Commission will first consider an interim rate increase of 7.11% proposed by Minnesota Power for residential customers that would take effect Jan. 1. It would result in $5.89 more per month for the average residential customer. The interim rate is to be temporary while the Public Utilities Commission considers the full 17.58% increase for all customers.
As reported by the News Tribune Nov. 1, the full increase would generate $108.3 million that Minnesota Power would use largely to bolster green-energy production and improve power transmission.
“Energy companies are expected to be leaders in this clean-energy transformation,” Bethany Owen, president and CEO of Allete, Minnesota Power’s parent company, told the Opinion page. “One of the things that I really have been proud of is … that Minnesota Power is really playing a huge role in that clean-energy transformation — (and all) while we continue to ensure the safety, reliability, resiliency, and rates that are among the lowest in the state of Minnesota. …
“We know that we have to get (this clean-energy) transition right, and a big part of that is making sure that our rates stay affordable and that our services stay reliable,” Owen said. “We have to get it right for our customers, our communities, our employees, the climate for sure, as well as our company.”
Minnesota Power investments over 15 years already have helped the utility grow from 5% to 50% its use of clean-energy sources, according to Frederickson. “It’s averaged like 2% to 3% a year,” he said. “It’s been at or about the rate of inflation.”
Minnesota Power’s need now to increase revenue is also due to the losses of industrial customers like Verso's Duluth paper mill and the idling of a machine at the UPM Blandin paper mill in Grand Rapids. Some good news on this front: ST Paper of Oconto Falls, Wisconsin, bought the West Duluth mill in May and plans to reopen it to produce bathroom tissue.
“It is exciting when we have new customers in the region,” Frederickson said. “We’ve worked a lot with ST Paper as they acquired the Duluth mill, and we are looking forward to them restarting it. We’ve also been working with a company called Huber Engineered Woods up in Cohasset where we’re actually helping them locate on property … to build a new board mill. …
“Because of the way our economy is shaped in northern Minnesota, we do sell a majority of our power to the larger customers, and so then, therefore, from a ratio basis, when there are changes, there is a bigger impact in our overall sales. But it is exciting when you have a new customer starting up.”
How much ST Paper’s monthly payments for electricity can help offset the power bills of residential customers every month isn’t known. And until it is, it does remain a good idea to conserve energy wherever possible, including turning off lights.
“I grew up that same way,” Owen concurred. “I was not allowed to leave a light on in any area after I left a room. So we absolutely believe in conservation. That’s going to be key for all of us as we continue this clean-energy transformation.”
And as we pay more — but no more than necessary, please.