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Serving Northern St. Louis County, Minnesota

MPUC approves modified rate hike for Minnesota Power

Marshall Helmberger
Posted 2/1/23

REGIONAL— Area residents served by Minnesota Power will see their rates increase slightly by later this year, based on a decision last week by the Minnesota Public Utilities Commission, or …

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MPUC approves modified rate hike for Minnesota Power

Posted

REGIONAL— Area residents served by Minnesota Power will see their rates increase slightly by later this year, based on a decision last week by the Minnesota Public Utilities Commission, or MPUC.
The MPUC approved a rate increase of approximately $59 million for the investor-owned utility, which equals about nine percent overall. That percentage increase applies to all of Minnesota Power’s rate classes.
Residential customers have already been experiencing most of that increase since the MPUC approved an interim rate hike just over a year ago, which increased residential rates by 7.11 percent. The new final rate will add about a 2.5 percent increase on top of that.
Commercial and industrial customers will see a modest reduction from the 14-percent interim rate hike imposed by Minnesota Power last year. Those customers will also be eligible for a rebate for the overpayments over the past year. Final rates for all classes are expected to go into effect this summer.
The commission also authorized a return on equity of 9.65 percent for the company. The decision is subject to a final written order and reconsideration.
As a regulated utility, Minnesota Power must receive approval from the MPUC whenever changes in revenue or expenses require adjusting its rates.
The company filed its rate request in November 2021, seeking to increase its annual operating revenue by $108 million or approximately 18 percent. The MPUC decision effectively cuts that request in half.
And Minnesota Power officials say that’s not enough to meet the needs of customers and finance their transition to renewable sources of energy. “As utilities are asked to do more and even faster, we expect rate review requests to become more frequent going forward,” said Bethany Owen, CEO and president of ALLETE, the company that owns Minnesota Power.
“We plan to file another rate request later this year that will reflect the revenue requirements that Minnesota Power needs in order to advance its state-leading Energy Forward strategy.”
Minnesota Power provides electrical service to Tower and Soudan as well as a small portion of Lake Vermilion. Minnesota Power also provides electricity to Ely’s public utilities commission through a contract, but those rates won’t be affected by the latest MPUC decision.