Minnesota Power offers to void rate increase in response to COVID-19 impact
Under a new proposal submitted by Minnesota Power last week, customers could see a rate increase from November 2019 rolled back and refunds issued across the board, as the utility attempts to address economic fallout caused by COVID-19.
Back in November last year, Minnesota filed for a rate increase amounting to $66 million — a 10.59 percent jump. It was meant to cover rising operating expenses, expiring contracts, and regulatory costs.
“Since Minnesota Power initially filed its rate request last fall, the COVID-19 virus has spread and is now impacting the health and financial well-being of people around the state and here in our communities,” Bethany Owen, CEO of Minnesota Power’s parent company ALLETE, said. “We hope resolving our rate case will provide some much-needed relief for our customers in these difficult times. Especially during this pandemic, we know that our mission of delivering safe, reliable, and affordable energy is even more important to our communities, homes, hospitals, and businesses.”
Under Minnesota Power’s new proposal, the original request would be limited to the amount needed to recover income from a 10-year, wholesale market contract expiring later this week. If regulators approve this latest proposal, the company’s customers will see rates fall from the current interim increase of 5.8 percent to 4.1 percent — a significant tumble from the original 10.59 percent proposed. Additionally, approximately $12 million of refunds for those temporary rates would be dispersed between all customers.
If approved, those refunds could go out later this summer. Beyond this, wholesale margin credits would be reclassified as part of the separate Resource Adjustment line item on bills, and customers would then be billed or credited monthly based on actual power sales, instead of estimated amounts. Any future rate proposals would also be delayed until at least March 1, 2021, granting another year’s stability in unstable times.
