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MN Power customers concerned about proposed gas plant, rates

March 27, 2018
Ben Bratrud
Last fall, Minnesota Power announced their proposal to build a new $350 million natural gas plant in Superior Wisconsin. This power plant would add 250 MW of additional electricity generation capacity for Minnesota Power. At CUB, our mission is to advocate for affordable and reliable utility service and clean energy for residential and small business consumers across Minnesota. This means that when a utility announces plans to build a new power plant, CUB wants to ensure the utility is using their ratepayer funds that pay for these facilities reasonably. In this case, analysis by experts testifying for the Clean Energy Organizations -- a coalition of Fresh Energy, Sierra Club, Wind on the Wires, and Minnesota Center for Environmental Advocacy -- and the Large Power Intervenors – industrial electricity users, such as Enbridge and mining companies – has shown that the plant shouldn’t be approved. Minnesota Power has not demonstrated a need for the electricity that the proposed plant would provide and, even if it is needed, hasn’t shown that there aren’t less expensive ways of getting that electricity. In many cases, energy efficiency or renewable energy can meet additional resource needs for utilities in a much more cost-effective way. CUB has been tracking this issue very closely and has been informing Minnesota Power customers about how the plant could impact them, opportunities for public engagement, and what expert analysis has said about this proposal. CUB also conducted a poll of Minnesota Power customers to gauge public opinions about the proposed power plant. Of a random sample of 552 customers, 77 percent said they were not inclined to support building the plant. A full 92 percent said they want Minnesota Power to do a full analysis of all energy options, which the company has not yet provided. The poll also showed that Minnesota Power customers are sensitive to rate increases. Minnesota Power’s two proposed residential rate increase requests in 2016 would have increased the average bill by $225 per year for the average Duluth resident. Nearly two thirds of the customers polled said that these increases would have a detrimental impact on their finances. A $350 million power plant in which costs are paid for by increased rates would put a strain on customers budgets. The results of the poll underlines the need to take caution not to approve new investments unless they have been demonstrated to be necessary. The complete poll results can be found below. *Note, the two rate hikes proposed by Minnesota Power in 2016 did not result in the full increase as originally requested by the company. **Polling results were submitted to the Minnesota Public Utilities Commission. All testimony on this issue can be found in Docket #17-568.  
  1. Who is your electricity provider?
Total
Minnesota Power 100%
 
  1. Are you aware that Minnesota Power has requested two rate hikes in the last year and half, and that these hikes could raise average residential customers’ electric bills by 27%, or an average of $225 per year?
Total
Aware 50%
Unaware 50%
 
  1. Are you familiar with a proposal from Minnesota Power to build a new power plant?
Total
Familiar 26%
Unfamiliar 74%
 
  1. Are you aware that Minnesota Power has estimated this power plant would cost $350 million and would be paid for by its customers?
Total
Aware 17%
Unaware 83%
 
  1. Utility customers pay for new power plants, if this new plant is built, the electricity you use could cost you significantly more each year. Are you inclined to support building a $350 million power plant?
Total
Yes 23%
No 77%
 
  1. It might be possible to meet electricity demands by using existing power plants or cleaner energy, like wind and solar, which could end up being cheaper for customers. Do you want Minnesota Power to make sure that a new power plant is the least expensive option before a new plant is built?
Total
I want Minnesota Power to do a full analysis of all energy options 92%
I do not want Minnesota Power to do a full analysis 8%
 
  1. As I said earlier, Minnesota Power has already pushed to increase residential electricity bills by 27%, or about $225 a year for the average household. This does not include the cost of a new power plant. If your electricity bill went up by $225 per year, would it have a financial effect on your family? 
Total
A $225-per-year increase in electric bills would make no difference 38%
I would have to make cutbacks in other areas 50%
It would be almost impossible to pay 12%
 
  1. Minnesota Power offers rebates to its customers to make it cheaper for people and businesses to purchase energy efficient light bulbs and appliances. Did you know about these energy-saving rebates?
Total
I have gotten a Minnesota Power rebate in the past 35%
I haven’t gotten a rebate, but I’m aware of them 42%
I did not know about these rebates 23%