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Minnesota Power proposal to withdraw rate increase request could result in immediate savings for customers

Published April 23, 2020

Today, Minnesota Power filed a request to immediately reduce customer bills, to soon refund approximately $12 million to customers, and to withdraw its pending request for a rate increase.

The coronavirus pandemic has drastically changed the circumstances surrounding Minnesota Power’s earlier rate increase request. In November, Minnesota Power filed a request to increase rates by 10.59% across all customer classes (and by 15% for residential customers). Customers are currently paying a 5.8% interim rate increase while the utility’s request is under consideration by the Public Utilities Commission (PUC).

With today’s filing, Minnesota Power is requesting that the interim rate increase be reduced to a 4.1% effective May 1, and that an estimated $12 million in earlier interim charges be refunded to customers. Going forward, the 4.1% increase would become permanent across customer classes. The increase for residential customers would be slightly higher but still less than the interim increase that is on customers’ bills today. The earliest the utility would be allowed to request another rate increase would be March 1, 2021.

CUB has worked closely with Minnesota Power to develop this proposal, and we support it. If approved, it will result in immediate savings for customers.

 

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Author: Annie Levenson-Falk

2 Responses to "Minnesota Power proposal to withdraw rate increase request could result in immediate savings for customers"

  1. Ray schmitz Posted on April 24, 2020 at 4:15 am

    They propose reducing their rate increase significantly, but the headline is deceptive! Given the current environment can they justify any rate increase?

  2. Annie Levenson-Falk Posted on April 24, 2020 at 3:36 pm

    Hi Ray. The proposal would reduce bills by reducing the interim rate increase that people are currently paying from 5.8% to 4.1% starting May 1, and it would refund the interim rates that customers paid from January-April.

    Rate increases are never good, but we do believe this one is reasonable. It’s due to a decrease in off-system energy sales. MN Power sells some power to smaller utilities, and the proceeds from those sales are credited to customers. One of those contracts is ending, so the credit will be going down.

    The increase wouldn’t appear in the basic electricity rate on people’s bills; I believe it would show up under the Resource Adjustment.

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