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REGIONAL- The Minnesota Public Utilities Commission (MPUC) has approved interim rates for Minnesota Power customers in the first step of a longer process to evaluate the company’s most recent …
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REGIONAL- The Minnesota Public Utilities Commission (MPUC) has approved interim rates for Minnesota Power customers in the first step of a longer process to evaluate the company’s most recent request for a rate review.
The decision will increase rates by 5.8-percent for all customer classes, effective Jan. 1, 2020. Under the change, the average residential customer will pay an additional $4.50 per month. Interim rates will remain in effect until final rates are decided by the MPUC.
In northern St. Louis County, the rate increase will primarily affect ratepayers in the Tower-Soudan area and a portion of Lake Vermilion. Most rural customers in the region are served by Lake Country Power, which is not a party to the proposed rate increase.
Minnesota Power, a utility division of ALLETE filed a rate review on Nov. 1 with state regulators seeking to increase its annual operating revenue by $65.9 million. The company contends that the additional revenues are necessary to continue its commitment to deliver safe, reliable energy from increasingly cleaner sources of energy.
As part of an ongoing initiative known as EnergyForward, Minnesota Power has significantly changed the way it produces and delivers energy to its customers. The company has closed seven of its nine coal units and has grown its current energy mix to 30 percent renewables with plans to increase it to 50 percent by 2021 through the addition of hydro and wind resources. Minnesota Power also has undertaken significant cost-management steps, reducing operations and maintenance costs by nearly 20 percent since 2014.
As a regulated electric utility, Minnesota Power must receive approval from the MPUC whenever changes in revenue and expenses require adjusting its rates. The process also includes public hearings. If the MPUC decides on a final rate that is below the interim rate, Minnesota Power customers will receive refunds based on the difference between the final and interim rates, plus interest.