Minnesota Power seeks $1.34 million rate increase

REGIONAL— Minnesota Power is asking state regulators to approve a $134 million revenue increase, beginning as early as January, under a filing the company submitted Nov. 3. It’s the first step in a regulatory process that could take a year or more to complete.
The filing, which would raise residential customer rates by 17.8 percent if approved in full, comes just over a year after the sale of Minnesota’s parent company, ALLETE, Global Infrastructure Partners (a subsidiary of BlackRock) and the Canada Pension Plan Investment Board. Critics of the sale, which was ultimately approved by the state’s Public Utilities Commission in October 2025, had predicted that the two private equity firms would likely push for substantial rate increases to enhance profitability.
Such critics found vindication in the company’s latest filing. “Minnesota Power and its private equity owners didn’t waste any time bringing this request for a rate increase,” said Hudson Kingston, of Ely, chief legal counsel for the citizens advocacy group CURE. “The company and its supporters justified the sale by saying that only private equity could provide them with the means to transition to 100 percent clean energy cheaply and quickly but now we’re seeing who will really bear the costs all while Minnesota Power proposes new gas plants.”
But Jennifer Cady, Minnesota Power’s vice president of public policy and external affairs, said the company’s focus remains on the delivery of safe and reliable electricity to its customers. “The electric system is undergoing an unprecedented transformation to achieve reliability and clean energy goals, requiring new investments at a time when our customer energy needs are changing and we are facing the same inflation pressures as other businesses.”
According to a company press statement, the rate request details the increased costs being incurred by the company, including for ongoing operations and maintenance of the company’s generation, transmission, and distribution systems, along with continued investments in a more resilient electric grid and renewable energy.
The rate proposal also reflects the loss of revenue the company has experienced since the long-term shutdown of the Minorca Mine and the partial shutdown at Hibbing Taconite. Minnesota Power is reliant on industrial sales for about two-thirds of its sales and the reduction in mining operations in the region have impacted the company’s revenues without reducing operational costs.
Minnesota Power officials say that the rate submission is not related to last week’s approval of a massive new data center in Hermantown, which is served by the company. The MPUC is still reviewing the company’s electric service agreement proposed for the new data center. Once the proposed data center is operational, Minnesota Power expects all its customers to benefit from the addition of a large new 24/7 customer that is required by Minnesota state law to fully pay for the cost of its electric service.
The company serves 150,000 customers in northeastern Minnesota, including both commercial and residential customers in Tower-Soudan, and parts of Lake Vermilion’s Pike Bay. Minnesota Power is also a contract power provider to municipal systems, such as Ely’s, although the proposed rate case announced this week would not have any immediate impact on the rates paid by customers of the Ely public utilities.
According to the company, the average residential customer will see an increase of $24 per month on their power bill if their rate request is approved in full. The company, meanwhile, is seeking approval of an interim rate increase of about 15 percent, which would take effect in January.
However, the company states that significant bill credits for its customers, announced earlier, will offset the interim rate increase by about 70 percent in 2027. If the approved final rate is lower than interim rates, the company will be required to refund the difference to customers with interest.
As part of the regulatory process, the Minnesota Public Utilities Commission will hold public meetings and solicit comment from customers, public interest groups, and other state regulatory agencies before making a final decision.