Published July 7, 2022

Minnesota Power has asked to increase electric rates by more than 18 percent: approximately $180 per year for the average household. How much the utility will ultimately be allowed to raise rates will be determined by the Minnesota Public Utilities Commission (PUC), which is now requesting public input. If you are interested in sharing your thoughts on this proposed rate hike, you can submit comments in writing or attend virtual or in-person public hearings scheduled to occur on July 19th and 20th. CUB will also be participating in a virtual town hall meeting scheduled for July 14th. More detailed instructions on sharing public comments and participating in the upcoming townhall are included below.

Minnesota Power is requesting this enormous rate increase primarily because electricity demand from its large industrial customers (including large taconite mines and paper mills in northern Minnesota) has recently dropped. That decreased demand has also caused the company’s revenues to decrease. Residential electricity sales, on the other hand, have increased as people have stayed home more over the past two years.

CUB, the Minnesota Department of Commerce, the Office of the Attorney General, the Energy CENTS Coalition and others are pushing back on Minnesota Power’s rate increase proposal in a proceeding before an Administrative Law Judge. Several of these parties are challenging the total amount Minnesota Power claims it needs to recover from ratepayers through increased rates. CUB is also specifically advocating for any ultimate rate increase to account for ongoing financial challenges affecting many of Minnesota Power’s residential customers. We believe the Judge, and ultimately the PUC, should take into account the ongoing economic hardships affecting residential customers and the unique risks associated with volatile paper and steel industries when setting rates. Struggling residential customers should not be asked to pay more than their fair share in order to offset risks that should be borne by the company’s shareholders and/or large power customers.

Already, 12% of households served by Minnesota Power are behind on their electricity bills. In December, citing numerous financial pressures on Minnesotans, the PUC found that an interim rate increase for residential customers should be only half that paid by other customer classes. Inflation has increased dramatically since then, further straining household budgets. CUB is recommending that any final rate increase approved by the PUC should follow the same model as interim rates – with residential customers paying half that paid by other customer class.

CUB is also recommending that the PUC approve a partial settlement agreement reached between Minnesota Power, CUB, and Energy CENTS Coalition. Under the partial settlement agreement, Minnesota Power would agree to (i) increase the budget of its Customer Affordability of Residential Electricity (CARE) program and (ii) increase the amount of an existing low-income, usage-qualified discount. In exchange, CUB and Energy CENTS have agreed to not oppose a $1.00 increase to a fixed, residential service charge. (This is down from a $2.00 service fee increase that the Company had originally asked for as part of its rate increase proposal.) Notably, under the terms of the settlement agreement, Minnesota Power has agreed to make the modifications described above regardless of whether the PUC approves the $1.00 increase to its service charge. CUB believes these changes will provide needed assistance to those most vulnerable to financial harm associated with the Company’s rate increase.

If you are concerned about how Minnesota Power’s proposed rate increase will affect you and your family, let the PUC know! Your voice matters, and public comments can and do make a difference in these proceedings. Below is more information on how you can submit public comments and/or participate in an upcoming town hall to learn more about this ongoing rate case.

Public Comment Opportunity

Any member of the public can comment on the proposed rate hike.

• In writing: to consumer.puc@state.mn.us or the MN Public Utilities Commission, 121 7th Place East, Suite 350, St. Paul, MN 55101

• Orally at an in-person or virtual hearing:
  • Tuesday, July 19, 2:00 p.m. (virtual)
  • Tuesday, July 19, 6:00 p.m. (virtual)
  • Wednesday, July 20, 2:00 p.m. at the AAD Shrine Meeting & Event Center in Hermantown (in-person and virtual)
  • Wednesday, July 20, 6:00 p.m. at the AAD Shrine Meeting & Event Center in Hermantown (in-person and virtual)

Full details, including links for the virtual hearings, can be found on Minnesota Power’s website (https://bit.ly/MNPowerRateHike).

Town Hall Meeting

On Thursday, July 14, from 6:30-8:00 pm Minnesota Interfaith Power and Light, the Citizens Utility Board, and the Sierra Club North Star Chapter will hold a virtual town hall meeting. Presenters will discuss how utility rates are set and what Minnesota Power is proposing and will guide attendees in providing written or in-person comments. For more information or to attend, visit https://www.mnipl.org/event/minnesota-power-rate-case-townhall/.